REG - Eco (Atlantic) O&G - Eco Acquires Additional Interest in Block 3B/4B

Eco (Atlantic) Oil & GasAnnouncement

27/06/2022 07:00

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RNS Number : 2077Q  Eco (Atlantic) Oil and Gas Ltd.  27 June 2022

27 June 2022

 

 

ECO (ATLANTIC) OIL & GAS LTD.

("Eco," "Eco Atlantic," "Company," or together with its subsidiaries, the
"Group")

 

Eco Acquires Additional Interest in Block 3B/4B, South Africa

 

Eco (Atlantic) Oil & Gas Ltd. (AIM: ECO, TSX‐V: EOG), the oil and gas
exploration company focused on the offshore Atlantic Margins, has signed a
farmout agreement (the "Agreement") pursuant to which its wholly owned
subsidiary, Azinam Limited ("Azinam"), will acquire an additional 6.25%
Participating Interest in Block 3B/4B, offshore South Africa from the Lunn
Family Trust (the "Vendor"), one of the shareholders of Ricocure (Proprietary)
Limited ("Ricocure"), subject to the satisfaction of customary conditions
precedent including, but not limited to, the receipt of requisite regulatory
approvals from the government of South Africa and the TSX Venture Exchange
(the "TSXV") (the "Acquisition").

 

Further information on the Agreement, including the consideration payable by
Eco in relation to the Acquisition, is included below.

 

On Completion of the Acquisition, Eco Atlantic will, through Azinam, hold a
26.25% Participating Interest  in Block 3B/4B, with strategic alliance
partners, Africa Oil Corp., the Operator of the block, holding a 20%
Participating Interest, and Ricocure, which holds the remaining 53.75%
Participating Interest.

 

Block 3B/4B, is located between 120-250kms offshore South Africa in the
Orange Basin directly south of the prolific multibillion barrels discoveries
offshore Namibia announced earlier this year by Shell (Graff-1) and
TotalEnergies (Venus-1). The 3B/4B Block covers an area of ~17,581km² and
lies in water depths ranging from 300-2500m. The block partners are currently
reprocessing a large 3D seismic survey that will be used to high-grade leads
towards identifying drilling targets and preparing for a potential drilling
campaign next year.

 

Further announcement(s) will be issued following receipt of government and/or
regulatory approvals in respect of the Acquisition.

 

Gil Holzman, Co-Founder and CEO of Eco Atlantic, commented:

 

"We are extremely pleased to be increasing our interest in Block 3B/4B, which
looks to be a very exciting licence for all the partners involved. We are
upbeat about the prospectivity of the licence following the significant oil
discoveries made earlier in the year offshore Namibia Orange Basin and we are
pleased to be strengthening our working relationship with Ricocure and Africa
Oil Corp.  We are seeing growing industry interest in the entire Orange Basin
and in particular in Block 3B/4B, and are therefore very happy to have managed
to increase our WI on the Block. We are working closely with our partners to
progress the technical work required, which includes reprocessing the 3D
seismic we have for the Block, in order to evaluate and identify drilling
prospects and high grade leads for a drilling campaign we are contemplating
for next year. We are set for an exciting couple of months and we look forward
to keeping our stakeholders updated as we look to spud the Gazania-1 well on
Block 2B, offshore South Africa, in early September 2022."

Further information on the Acquisition

 

Parties

 

The Agreement has been entered into between Ricocure, the trustees for the
time being of the Vendor, Azinam and Eco. The Vendor holds 10.417% of the
issued share capital in Ricocure.

 

The Company, through its wholly owned subsidiary, Eco (Barbados) Oil & Gas
Holdings Limited, holds 100% of the shareholding in Azinam Group Limited which
holds 100% of the shareholding in Azinam.

 

Consideration

 

The aggregate dollar equivalent consideration payable by the Company to the
Vendor under the Agreement is US$10m, comprising the following:

 

Signing Consideration

 

The Company shall (i) issue to the Vendor 2,702,702 new common shares of no
par value in the Company ("Common Shares"), at a deemed price of 30p
(CAD$0.48) per Common Share (the "Issue Price") having an aggregate value of
US$1 million on the date of the Agreement; and (ii) pay a cash amount of US$1
million in cash to the Vendor within 6 business days of the date of the
Agreement (the "Signing Consideration").

 

Subject to certain exceptions, an amount equal to the Signing Consideration
plus interest is repayable by the Vendor to the Company in the event that the
Agreement is terminated prior to Completion.

 

 

The Vendor shall be entitled to sell in one block or transfer all or any
portion of the Common Shares issued as part of the Signing Consideration
immediately on or following the date of the Agreement provided that such
transfer is in compliance with UK  and Canadian securities laws. In the event
that, on the date of such a sale, the average market price of the Common
Shares as quoted on the AIM market of the London Stock Exchange plc ("AIM") is
less than 30p per Common Share, then the shortfall shall be paid by the
Company to the Vendor  in cash on completion of the Agreement subject to a
maximum cap of £0.04 per Common Share.

 

Completion Consideration

 

On the date of completion of the Acquisition ("Completion"), following the
satisfaction of the conditions precedent, the Company is required to:

 

·    pay a cash amount of US$1.00 to Ricocure;

·    pay a cash amount of US$500,000 to the Vendor;

·    issue to the Vendor, new Common Shares at the Issue Price having an
aggregate value of US$500,000 (or, at the Company's sole discretion, pay an
additional amount of US$500,000 to the Vendor such that the cash consideration
is US$1 million);

·    issue to the Vendor, new Common Shares at the Issue Price of 30p
(CAD$0.48) having an aggregate value of US$3 million. These Common Shares (the
"Restricted Shares") will be subject to lock up restrictions (as further
detailed below);

·    issue to the Vendor, new Common Shares at the Issue Price of 30p
(CAD$0.48) having an aggregate value of US$2 million; and

·    issue to the Vendor, new Common Shares equal to US$2 million divided
by the greater of (i) the value of the 30 day VWAP per Common Share prior to
the date of the press release announcing the issue of such Common Shares; and
(ii) the lowest issuance price then allowed by the rules of the TSXV and AIM
(to the extent then listed on such markets, otherwise the average (if listed
on more than one market) on such markets as the Common Shares are then
listed). This shall be subject to obtaining prior TSXV approval in the event
that such issue of Common Shares would cause the Vendor  to own more than
9.99% of the issued and outstanding Common Shares (calculated at the time of
issuance).

 

Save for the Restricted Shares, the Vendor  shall be entitled to sell or
transfer all or any portion of any Common Shares issued to it at Completion
provided that such transfer is in compliance with UK securities laws and
Canadian securities laws.

 

Lock up arrangements

 

The Restricted Shares will be subject to a lock up agreement restricting the
sale or transfer of all or any portion of the Restricted Shares until the
earlier of (i) signature of a farmout agreement between Ricocure, and/or Eco
and/or Azinam and a third party; or (ii) six months after the date of the
Agreement provided that such transfer is in compliance with UK securities laws
and Canadian securities laws. There are exceptions in respect of completed
bona fide third party takeover offers or arrangements, amalgamations or
similar transactions involving the acquisition by a third party of 50% or more
of the outstanding Common Shares.

 

The longstop date under the agreement is 12 months from signing.

 

Admission and Total Voting Rights

Application is being made to the London Stock Exchange plc for admission of
2,702,702 new Common Shares, being issued pursuant to the Signing
Considieration, to trading on AIM, which is expected to take place at 8.00
a.m. (BST) on or around 30 June 2022 and dealings on AIM will commence at the
same time ("Admission").

Following Admission, the issued share capital of the Company will be
311,277,307 Common Shares. The above figure may be used by shareholders as the
denominator for the calculations by which they will determine if they are
required to notify their interest in, or a change to their interest in, the
share capital of the Company under the FCA's Disclosure Guidance and
Transparency Rules.

 

 

**ENDS**

 

For more information, please visit www.ecooilandgas.com or contact the
following:

 

 Eco (Atlantic) Oil & Gas Ltd.                              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 | +1 (416) 318 8272
 Strand Hanson Limited (Financial & Nominated Adviser)

                                                            +44 (0) 20 7409 3494
 James Harris

 James Bellman

 Berenberg (Broker)                                         +44 (0) 20 3207 7800
 Emily Morris

 Detlir Elezi

 Celicourt (PR)                                             +44 (0) 20 8434 2754
 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 20% Working Interest (to be increased to a 26.25% Working
Interest, subject to Completion of the Acquisition) in Blocks 3B/4B operated
by Africa Oil Corp., totalling some 20,643 km(2).

 

Cautionary Notes:

 

This news release contains certain "forward-looking statements", including,
without limitation, statements containing the words "will", "may", "expects",
"intends", "anticipates" and other similar expressions which constitute
"forward-looking information" within the meaning of applicable securities
laws. Forward-looking statements reflect the Company's current expectations,
assumptions, and beliefs, and are subject to a number of risks and
uncertainties that could cause actual results to differ materially from those
anticipated. These forward-looking statements are qualified in their entirety
by the inherent risks and uncertainties surrounding future expectations.

 

Important factors that could cause actual results to differ materially from
expectations include, but are not limited to, general economic and market
factors, competition, the effect of the global pandemic and consequent
economic disruption, and the factors detailed in the Company's ongoing filings
with the securities regulatory authorities, available at www.sedar.com
(http://www.sedar.com) . Although forward-looking statements contained herein
are based on what management considers to be reasonable assumptions based on
currently available information, there can be no assurance that actual events,
performance or results will be consistent with these forward-looking
statements, and our assumptions may prove to be incorrect. Readers are
cautioned not to place undue reliance on these forward-looking statements. The
Company undertakes no obligation to publicly update or revise any
forward-looking statements either as a result of new information, future
events or otherwise, except as required by applicable laws.

 

The TSX-V has neither approved nor disapproved the contents of this news
release. Neither the TSX-V nor its Regulation Services Provider (as that term
is defined in the policies of the TSX-V) accept responsibility for the
adequacy or accuracy of this release.

 

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