From both a health and economic standpoint, the effects of COVID-19, in tandem with the significant downturn in the international oil and gas industry, has created a challenging backdrop against which the Company is striving to execute, and deliver, its business objectives.
Against this background, Otto achieved encouraging results in 2020:
Continued development of the Lightning Field with a second production well and bringing
Significant improvement in our financial performance and a substantial upgrade in our reserves, both of which
Completion of an
Negotiation of a three-year
Despite achieving a number of key milestones, Otto was not immune to the precipitous decline in commodity prices and corresponding significant devaluing of its share price and value during the period. Importantly, the Board responded quickly by renewing the company's Board and adjusting the Company's management and operations. This response included making leadership changes, examining all spending, and aggressively reducing overhead in the face of this downturn. The Company will rigorously continue to pursue these initiatives, including a disciplined forward capital allocation and targeting of further reductions in costs and overhead.
The appointment of
As you are aware, I retired as Chairman of Otto at this company's AGM last November. In April this year the Board asked me to come back as Executive Chairman to steer the company through a very difficult period in a very difficult environment. I am very pleased to be able to report success, and to hand over the Chairmanship with the company in much better shape having delivered on what I promised in April, namely Board renewal, cost reduction, disciplined management, operational success, and a positive cashflow.
The Board has accepted my recommendation to appoint
In addition, as part of the broader Board renewal process we have also appointed Mr
Building on last year's strategic focus to establish a solid production base, Otto now has three core asset hubs as a foundation for generating meaningful free cash flow. Our first asset, the flagship South Marsh Island 71 (SM71) field, accounted for 56% of FY2020 production and continues to be a strong performer. The second asset, Lighting Field, delivered 44% of FY2020 production and has ramped up to the steady state production levels that were anticipated when production began in
Otto significantly strengthened its balance sheet in the past year, making it one that can facilitate the building of a robust future. The Company entered into a debt facility agreement with
As we move into 2021, I am confident that the Company's outlook is bright, due to a strengthened balance sheet and the anticipated overall increase in production and cashflow from our assets, but also because of our successful Board and management renewal. These factors provide the ability to pursue the disciplined development of our existing captured resource base, and to selectively invest in high quality infrastructure-led exploration.
I want to acknowledge and thank Otto's staff for their hard work and dedication, as well as my fellow board members for their diligence and counsel. I also thank our shareholders and stakeholders for their continuing support in what remains a challenging operating environment globally. I look forward to working with our new Executive Chairman
Contact:
Tel: +61 (0) 414 551 361
About
Otto is an ASX-listed oil and gas exploration and production company with a focus on the broader
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