Otto Energy plans $20M capital return

• Otto Energy plans to return approximately $20 million to shareholders and consolidate its shares on a 100:1 basis.
• The proposed capital return equals $0.417 per share on a post-consolidation basis funded entirely from existing cash reserves.
• The company stated that the capital return and share consolidation aim to return surplus cash, reduce share count volatility, and maintain an efficient capital structure.

Otto Energy (ASX:OEL) plans to return approximately $20 million to shareholders alongside a 100:1 share consolidation to optimise its capital structure.

The company holds capital above its foreseeable operating needs and intends to fund the capital return entirely from its existing cash reserves.

"The proposed capital return of approximately $20 million, equivalent to $0.417 per share on a post-consolidation basis, puts surplus capital back in shareholders' hands, while the proposed share consolidation is designed to deliver a more efficient capital structure," said Otto Energy CEO Chris Dorros.

Subject to shareholder approval, the 100:1 share consolidation will occur first, followed by the capital return payment of $0.417 per share based on the post-consolidation share count.

Following the announcement, the Otto Energy share price was unchanged at $0.0070.

Alongside the proposed capital return and share consolidation, the business is exploring monetisation opportunities for its Gulf of America assets.