Eco Atlantic finalizes Africa Oil farm-out, secures full Guyana venture ownership.

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Eco (Atlantic) Oil & Gas Ltd has informed investors that its subsidiary, Azinam Limited, has gained government approval for the proposed farm-out transaction with Africa Oil. This approval paves the way for the transfer of a 6.25% stake in the Block 3B/4B asset offshore South Africa to the Toronto-listed partner, following the green light from South African authorities.

 

After receiving $2.5 million in July, Eco now obtains an additional $2.5 million from Africa Oil, with potential contingent payments of up to $5.5 million linked to project milestones. Eco maintains a 20% stake in the South Africa project, while Africa Oil’s stake increases to 26.25%. The remaining 53.75% is owned by the private South African firm Ricocure.

The joint farm-out process persists, targeting the inclusion of a new partner potentially acquiring up to 55% of the project. In Guyana, Eco has provided investors with an update on the Orinduik License, indicating the company’s transition into the license’s second renewal period.

This signals the start of a new phase involving commitments, including the initiation of an exploration well drilling. Simultaneously, Eco is increasing its ownership in the project as TOQAP Guyana, a partnership between TotalEnergies and QatarEnergy, surrenders a 25% stake and departs from the project. Consequently, Eco now possesses 100% control of the project through two entities.

The company highlighted that Total and Qatar Energy withdrew from the project citing “strategic reasons.” In the previous year, after management changes and a strategic review, the former partner Tullow Oil also exited the project. This move, similarly to Total and Qatar Energy’s departure, resulted in Eco gaining a larger stake in the project through a transaction and assuming the role of the project operator as an AIM-quoted explorer.

Eco currently possesses a 40% stake in the project through Eco Guyana and a 60% stake through Eco Orinduik. A distinct farm-out process is anticipated to attract new partners to contribute to the advancement of the exploration project in Guyana.

Recognizing the material value and potential of the Orinduik Block, Eco acquired Tullow’s 60% working interest and has maintained its emphasis on drilling a substantial, stacked pay interval in the Southeastern quadrant of the block, stated Eco’s Chief Operating Officer, Colin Kinley.

As an approved operator, Eco Atlantic is actively seeking new partners to collaborate on drilling the substantial potential within the Cretaceous interval along the Guyana oil fairway.

Following the commitment to this well, we are now entering the planning and engineering phase for drilling within the next 12-18 months. Kinley further expressed optimism about the future of the Orinduik block, noting substantial interest from crucial industry partners and international oil companies (IOCs) in the ongoing farm-out process.

Shareholders can expect ongoing updates on operational and farm-out progress throughout the year.

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