REG - Eco (Atlantic) O&G - Block 3B/4B Farm In - TotalEnergies & QatarEnergy

Eco (Atlantic) Oil & GasAnnouncement

06/03/2024 07:00

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RNS Number : 7201F  Eco (Atlantic) Oil and Gas Ltd.  06 March 2024

 

6 March 2024

 

ECO (ATLANTIC) OIL & GAS LTD.

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

 

Strategic Farm down in Block 3B/4B Orange Basin South Africa to TotalEnergies
and QatarEnergy

 

Eco (Atlantic) Oil & Gas Ltd. (AIM: ECO, TSX ‐ V: EOG), ("Eco") the
oil and gas exploration company focused on the offshore Atlantic Margins in
South Africa, Namibia, and Guyana, is pleased to announce it has signed a
Farmout Agreement ("FOA") pursuant to which Azinam Limited ("Azinam"), its
wholly owned subsidiary, will farm out a 13.75% Participating Interest in
Block 3B/4B, offshore the Republic of South Africa as part of an aggregate 57%
farm down transaction along with its  Joint Venture ("JV") Partners Africa
Oil SA Corp. ("Africa Oil") and Ricocure (Proprietary) Limited ("Ricocure") to
TotalEnergies EP South Africa B.V., who will become Operator ("TotalEnergies")
and QatarEnergy International E&P LLC ("QatarEnergy") (the "Transaction").

 

Upon completion of the Transaction, Eco will retain a 6.25% interest in Block
3B/4B.

Transactions Highlights:

Maximum transaction value, including carry, of up to US$32.1m to Eco, which
includes payments due to Eco from Africa Oil and Ricocure under previously
announced agreements as detailed below:

·    As a result of the 6.25% farm out transaction with Africa Oil,
announced on 11 July 2023, Eco will receive up to US$5.5m in two payments,
US$4m on Completion of the Transaction, as defined below, and a further
US$1.5m on spudding of the first exploration well, and US$1.2m due from
Ricocure pursuant to the original Azinam - Ricocure 2019 farm out agreement
due on Completion.

·    TotalEnergies and QatarEnergy transaction will deliver, subject to
achieving certain milestones, staged cash payments, comprising a total cash
payment of US$11.92m of which US$1.92m is payable at Completion and the
remaining balance in two equal successive payments, conditional upon receipt
of customary regulatory approvals and the balance on spudding of a first
exploration well.

·    Eco will also receive a full carry of its 6.25% retained share of all
JV costs, up to a cap, repayable to TotalEnergies and QatarEnergy from
production, which is expected to be adequate to fund the Company's share of
drilling for up to two wells on the licence.

 

Gil Holzman, Co-founder and Chief Executive Officer of Eco Atlantic,
commented:

"We are delighted to have signed this agreement with TotalEnergies and
QatarEnergy. Block 3B/4B sits in one of the most prolific and exciting areas
in the world for offshore oil and gas exploration and development. The
decision by two of the largest energy companies globally to farm into this
licence is strengthened by their significant understanding of the Orange
basin, having made the Venus large light oil discovery just recently north of
the basin in Namibia.

 

"I would like to thank our partners at Africa Oil and Ricocure for their
cooperation and jointly negotiating this farm out agreement. We now look
forward to working closely with the government of South Africa and our new
partners on the exploration licence to prepare first drilling."

 

Pursuant to the terms of the FOA, completion of the Transaction ("Completion")
is subject to the satisfaction of customary conditions precedent including,
but not limited to, the receipt of requisite regulatory approvals (Section 11)
from the government of South Africa.  On Completion, the Block 3B/4B
interests of the JV partners will be as follows: TotalEnergies EP South Africa
B.V. will become the Operator of the Block, holding a 33% Participating
Interest; QatarEnergy International E&P LLC, will hold a 24% Participating
Interest; Africa Oil SA Corp, a wholly owned subsidiary of Africa Oil Corp.
will retain a 17% Participating Interest;  Azinam Limited, a wholly owned
subsidiary of Eco Atlantic, will retain a Participating Interest of 6.25%; and
Ricocure (Proprietary) Limited, will retain a 19.75% Participating
Interest.

**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, Executive Director
 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

 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 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.

 

Offshore Guyana, in the proven Guyana-Suriname Basin, the Company operates a
100% Working Interest in the 1,354 km(2) Orinduik Block. 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 in Block 3B/4B, in the Orange Basin,
totalling some 20,643km(2).

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