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  • Explorer Otto Energy has signed a US$55 million debt facility with Macquarie Bank to fund opportunities in the North American Gulf of Mexico region
  • The company is operating at Talos Energy’s offshore rigs in the “Green Canyon 21” project area though a farm in agreement
  • Otto Energy holds 16.67 per cent of interest in the project site by helping with funding
  • The working partners are hoping to see 5000 barrels of oil per day from the project by the end of 2020
  • Shares in Otto Energy are trading 4.35 per cent higher today, for 4.8 cents each

Otto Energy has signed on for a debt facility with Macquarie Bank to pour US$55 million (A$79.6 million) in funding for oil rigs in the Gulf of Mexico region.

The company is currently operating at a project site under a farm-in agreement with industry cohort Talos Energy — “Green Canyon 21”. Otto holds 16.67 per cent working interest as of today at the project.

In maintaining Otto’s working interest at Green Canyon, the company must continue to fund 22.22 per cent of operations.

“We are excited to finalise a significant financing package from a major financial institution in Macquarie which allows us to immediately progress the Green Canyon 21 development following the successful Bulleit well drilling program completed in August,” Otto Energy Managing Director Matthew Allen said.

“Bulleit” is one of the offshore oil rigs located at Green Canyon.

“In addition, the facility is designed to provide significant funding flexibility for further expansion from Otto’s growing portfolio of quality assets,” he added.

The initial commitment with Macquarie Bank is for US$35, with the additional US$20 million awaiting credit approval. Interest from the debt facility is set at eight per cent per year.

Otto Energy plans to begin quarterly repayments by the end of March next year.

The Green Canyon 18A rig, located 16 kilometres away from Bulleit
Image sourced from Otto Energy

“The quantum of the proposed Facility and the rigorous due diligence process undertaken gives validation to the quality of Otto’s asset suite and its ability to maintain and service appropriate debt levels,” Matthew Allen continued.

“The funding facility is an important component in delivering on the strategic goal that Otto is working towards by the end of 2020.”

Talos Energy has previously advised for 10 to 30 million barrels of oil present at the Bulleit prospect. Matthew stated today the working partners are hoping to see 5000 barrels of oil per day produced on site by the end of 2020.

Otto Energy also revealed today it will issue 85,000,000 shares to Macquarie at 0.08 Australian cents each for A$6.8 million value in total.

Shares in Otto Energy have seen considerable uptake today, trading higher by 4.35 per cent for 4.8 cents each.

OEL by the numbers
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