Eco (Atlantic) Oil & Gas Ltd, a prominent player in the oil and gas exploration sector focusing on the offshore Atlantic Margins, has reported significant interest in its oil blocks off the coast of Namibia. The company is now contemplating a potential farm-out of its offshore Petroleum Exploration Licences (PELs) as it continues to progress in various jurisdictions.
In Namibia, Eco Atlantic holds operatorship and an 85% WI across four offshore PELs (97, 98, 99, and 100), covering a combined area of 28,593 km² in the Walvis Basin. The company is currently evaluating its options for progressing exploration work programs.
Apart from Namibia, Eco Atlantic has continued to engage in discussions with industry players regarding the farm-out initiative for the offshore Orinduik Block in Guyana.
“With active farm-out discussions ongoing in Namibia and Guyana, we are well-positioned to capitalise on high levels of interest from potential partners in these exciting exploration regions. We remain committed to delivering value for our shareholders and look forward to sharing further updates in the months ahead,” Gil Holzman, President and Chief Executive Officer of Eco Atlantic, said.
Meanwhile, in its unaudited results for the three- and six-month periods ended 30 September 2024, the company said that following completion of the farm down of Block 3B/4B offshore the Republic of South Africa, as announced on 28 August 2024, Eco has received the first payment of N$150 million from the JV partners as part of the milestone payments agreed in the 3B/4B Transaction. An additional N$208 million is expected to be received by the company during 2025 when the next milestones are reached.
On 29 July 2024, the company announced the signing of an agreement to sell a 1% interest in Block 3B/4B South Africa in exchange for the cancellation of all of Africa Oil’s shares and warrants in Eco (worth N$147 million). Upon completion, Eco, which currently holds a 6.25% interest in Block 3B/4B, will hold a fully carried 5.25% interest in Block 3B/4B Offshore South Africa. Accordingly, the number of shares of the company will be reduced from 370,173,680 to only 315,231,936 shares.
On 28 August 2024, the company announced the completion of a farm down of the previously announced 13.75% participating interest in Block 3B/4B offshore the Republic of South Africa and the transfer of operatorship of the block after receipt of the requisite regulatory approvals (Section 11) from the government of South Africa.
“We are pleased with the continued operational and financial progress achieved in recent months. Following completion of the farm-down of Block 3B/4B, we received a payment of US$8.3 million from our JV partners, with the potential for Eco to receive a further US$11.5 million in 2025, subject to certain milestones being achieved on Block 3B/4B. This demonstrated our commitment to unlocking value from our South African portfolio while maintaining exposure to the highly prospective Orange Basin.
“Eco also increased its exposure to South Africa’s Orange Basin, growing offshore energy acreage through the acquisition of a 75% working interest in Block 1 while taking the strategic decision to relinquish Block 2B. Both of these developments further indicate Eco’s ability to take strategically prudent decisions to maximise the company’s exposure to exciting jurisdictions.”
The company is relinquishing its 50% WI-operated offshore Block 2B in South Africa, where it drilled its 2022 Gazania-1 well offsetting the AJ-1 oil discovery. The company has completed all necessary documentation and environmental audits and has informed the Petroleum Agency of South Africa (PASA), being the regulator for the Government of South Africa. Eco’s board considers Block 2B a non-core asset in the portfolio given the company’s interests in Namibia, Block 3B/4B, Block 1 in SA, and the 2 blocks in Guyana. Following acceptance by the PASA of this relinquishment, the company will have no further liability in respect of Block 2B.
Eco Atlantic is a TSX-V- and AIM-quoted Atlantic Margin-focused oil and 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.
The company had cash and cash equivalents of N$144 million and no debt as of 30 September 2024. On the other hand, the company had total assets of N$520 million, total liabilities of N$26 million, and total equity of N$494 million as of 30 September 2024.