TIDMECO
RNS Number : 8631I
Eco (Atlantic) Oil and Gas Ltd.
10 August 2023
10 August 2023
ECO (ATLANTIC) OIL & GAS LTD.
("Eco," "Eco Atlantic," "Company," or together with its
subsidiaries, the "Group")
Acquisition of additional 60% Operated Interest in Orinduik
Block Guyana from Tullow Oil
Eco (Atlantic) Oil & Gas Ltd. (AIM: ECO, TSX -- V: EOG) ,
the oil and gas exploration company focused on the offshore
Atlantic Margins, is pleased to announce that it has signed a Sale
Purchase Agreement (the "Agreement") pursuant to which its wholly
owned subsidiary, Eco Guyana Oil and Gas (Barbados) Limited ("Eco
Guyana"), will acquire a 60% Operated Interest in Orinduik Block,
offshore Guyana, through the acquisition of Tullow Guyana B.V.
("TGBV") , a wholly owned subsidiary of Tullow Oil Plc. ("Tullow")
(the "Transaction") in exchange for a combination of upfront cash
and contingent consideration .
The Transaction is in line with Eco's strategy to deliver
material value for its stakeholders through early entry and
exploring for hydrocarbons in some of the most prolific petroleum
basins in the world. Eco, via its wholly owned subsidiary Eco
(Atlantic) Guyana Inc, currently holds a 15% working interest in
the Orinduik Block. On completion of the Transaction, Eco, as
operator and majority interest holder in the Orinduik Block,
intends to drive the exploration process and focus on its strategy
to attract new partners to join the license and proactively engage
in drilling.
Transaction summary:
-- US$700,000 cash payment upon transfer of TGBV's 60%
Participating Interest and operatorship of the Orinduik licence to
Eco Guyana, to be paid to Tullow Overseas Holdings B.V., the parent
of TGBV ("TOHBV") on completion of the Transaction (the "Initial
Consideration").
-- Contingent consideration payable to TOHBV is linked to the
success of a series of potential future milestones, as follows:
o US$4 million in the event of a commercial discovery;
o US$10 million payment upon the issuance of a production
licence from the Government of Guyana; and
o Royalty payments on future production - 1.75% of the 60%
Participating Interest entitlement revenue net of capital
expenditure and lifting costs.
-- Transaction and payment of the Initial Consideration is
subject to certain market-standard conditions precedent, including
customary Government and JV partner approvals.
-- Completion is expected to occur in the second half of 2023.
On closing of the Transaction, the interests of the JV partners
in the Orinduik License will be as follows:
-- Eco will hold an aggregate 75% Participating Interest via Eco
Guyana and Eco (Atlantic) Guyana Inc., and be Operator of the
Block; and
-- TOQAP Guyana B.V will continue to hold a Participating Interest of 25%.
Gil Holzman, President and Chief Executive Officer of Eco
Atlantic, commented:
"We are delighted to have reached this agreement with Tullow and
to be able to begin to unlock the Orinduik Block's full potential.
Since 2014, we have believed in the potential of this Block, with
our initial two wells in 2019 proving two different oil plays. We
will proactively engage in a farm out process for this highly
prospective license and begin preparations to drill a well testing
the cretaceous, where all light oil discoveries have been made in
the adjacent Stabroek Block."
Colin Kinley, Co-founder and Chief Operating Officer of Eco
Atlantic, added:
"The Orinduik Block sits on the series of continental shelves
leading into the basin. This rich and prolific basin is clean sand
filled and sealed nicely to trap the massive volumes of oil found
thus far. Following ten years of basin evaluation and research, we
have a solid and highly experienced team to take over the
Operatorship role. We will start by targeting stacked pay
opportunities we see in the cretaceous and look forward to
continuing our aggressive approach to discovery. We see an
opportunity in the multi hundred millions of recoverable range and
now is the time to drill our targets."
Transaction Structure
TOHBV will transfer its entire interest in the Orinduik licence
via the sale of TGBV to Eco Guyana in exchange for the Initial
Consideration and a series of contingent payments based on future
milestones as described above.
TGBV holds a 60% participating interest in, and Operatorship of,
the Orinduik Block pursuant to: (i) a petroleum agreement between
the Minister responsible for Petroleum representing the Government
of the Co-operative Republic of Guyana, Eco (Atlantic) Guyana Inc.
and TGBV dated 14 January 2016 (as amended from time to time) and
(ii) the joint operating agreement dated between TGBV, Eco
(Atlantic) Guyana Inc., and TOQAP dated 18 January 2016 (as amended
from time to time). Tullow will retain its interest in the Kanuku
Block.
Additional cash consideration may be payable to TOHBV, in the
form of contingent payments, including a royalty payment, as noted
above, on upstream revenues once production from the Orinduik
licence commences .
Subject to the satisfaction of certain market standard
conditions precedent and customary approvals, including Government
and JV partner approvals , the Transaction is expected to complete
in the second half of 2023.
On 31 December 2022 as per the audited TGBV financial
statements, the gross asset value attributable to the interests
being acquired through the Transaction amounted to US$1.5 million,
with attributable losses of US$713,000 (excluding a one-off write
down of exploration expenses). As of 31 December 2022, the gross 2C
resource attributable to the transferred interests amounted to
47.7mmbls.
**ENDS**
For more information, please visit www.ecooilandgas.com or
contact the following :
Eco Atlantic Oil and Gas c/o Celicourt +44 (0) 20
8434 2754
Gil Holzman, CEO
Colin Kinley, COO
Alice Carroll, Head of Corporate Sustainability +44(0)781 729 5070
Strand Hanson (Financial & Nominated Adviser) +44 (0) 20 7409 3494
James Harris
James Bellman
Berenberg (Broker) +44 (0) 20 3207 7800
Matthew Armitt
Detlir Elezi
Echelon Capital (Financial Adviser N.
America Markets)
Ryan Mooney +1 (403) 606 4852
Simon Akit +1 (416) 8497776
Celicourt (PR) +44 (0) 20 7770 6424
Mark Antelme
Jimmy Lea
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as it forms part of
United Kingdom domestic law by virtue of the European Union
(Withdrawal) Act 2018 (as amended).
About Eco Atlantic:
Eco Atlantic is a TSX-V and AIM-quoted Atlantic Margin-focused
oil & gas exploration company with offshore license interests
in Guyana, Namibia, and South Africa. Eco aims to deliver material
value for its stakeholders through its role in the energy
transition to explore for low carbon intensity oil and gas in
stable emerging markets close to infrastructure.
Offshore Guyana in the proven Guyana-Suriname Basin, the Company
holds a 15% Working Interest in the 1,800 km(2) Orinduik Block
Operated by Tullow Oil. In Namibia, the Company holds Operatorship
and an 85% Working Interest in four offshore Petroleum Licences:
PELs: 97, 98, 99, and 100, representing a combined area of 28,593
km(2) in the Walvis Basin.
Offshore South Africa, Eco is Operator and holds a 50% working
interest in Block 2B and a 26.25% Working Interest in Block 3B/4B
operated by Africa Oil Corp., totalling some 20,643km (2) .
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END
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