Otto Energy taking legal advice after BHP pull-out
JOHANNESBURG (miningweekly.com) – ASX-listed Otto Energy is taking legal advice after global mining group BHP Billiton’s surprise decision to withdraw from an offshore oil exploration project in the Philippines.
BHP Billiton verbally informed Otto Energy that it would not participate in the drilling of the Cinco-1 prospect and that it would withdraw from the SC55 licence.
The Perth-headquartered junior company said in a statement that BHP Billiton had provided no previous indication of its intent not to participate in the prospect or to withdraw from the licence and that it was taking legal advice on the bigger firm’s continuing funding obligations.
“Otto will strenuously enforce its full legal rights under the relevant agreements and seek to protect the interest of Otto and its shareholders in relation to Otto’s interest in SC55,” the firm said.
In May 2011, BHP Billiton announced the exercise of an option to farm-in to SC55. The terms of the agreement have seen Otto transfer 60% of working interest and operatorship of SC55 to BHP Billiton, in return for a carry on two deep-water offshore wells and reimbursement of prior costs incurred in the contract area.
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