Eco Atlantic Oil & Gas announces biggest deal to date with Orange Basin farmout
March 08, 2024 at 09:40 am EST
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Eco (Atlantic) Oil & Gas Ltd has announced a significant agreement involving a 13.75% participating interest in their Orange Basin Block 3B/4B, with strategic partners TotalEnergies and QatalEnergy.
This deal, described as the largest in the company's history, is noteworthy for several reasons. Firstly, Total Energies, now the operator, brings a deep understanding of the Orange Basin, enhanced by its recent discoveries in the same geology in Namibia. Secondly, the strategic location of Eco's block, adjacent to other areas operated by Total Energies, promises synergies, especially since Total Energies possesses drilling rigs in the vicinity, ensuring operational readiness.
Financially, the transaction is expected to significantly bolster Eco's cash position by almost $20 million, positioning the company five times above its current standing upon commencement of drilling. Moreover, Eco is fully carried for the forthcoming exploration activities, potentially covering two wells on the block.
The total transaction value could reach over $32 million, encompassing both cash and the value of the carry for Eco’s remaining work interest. The agreement includes milestone payments, contingent upon deal completion, regulatory approvals, and the commencement of drilling.
The drilling schedule is under Total Energies’ discretion, anticipated within the next 12 to 18 months. Following this farmout, Eco aims to replicate its success in other ventures, focusing on its Guyana and Namibian assets, with ongoing discussions for potential partnerships expected to culminate in 2024.
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Eco (Atlantic) Oil & Gas Ltd. is a Canada-based oil and gas exploration company with offshore licensed interests in Guyana, Namibia, and South Africa. The petroleum and natural gas interests of the Company are located offshore in Guyana, South Africa, and Namibia. In Guyana, the Orinduik block is situated in shallow to deep water (70m-1,400m), approximately 170 kilometers (km) offshore Guyana in the Suriname Guyana basin (Orinduik License). In Namibia, the Company holds four offshore petroleum licenses in the Republic of Namibia, being petroleum exploration license number 097 (the Cooper License), petroleum exploration license number 098 (the Sharon License), petroleum exploration license number 099 (the Guy License) and petroleum exploration license number 100 (the Tamar License). In South Africa, it holds two offshore petroleum licenses in South Africa, being petroleum exploration license number 2B (the 2B Block) and petroleum exploration license number 3B/4B (the 3B/4B Block).