REG - Eco (Atlantic) O&G - Share Purchase Agreement with Azinam signed

Eco (Atlantic) Oil & GasAnnouncement

08/02/2022 07:00

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RNS Number : 0020B  Eco (Atlantic) Oil and Gas Ltd.  08 February 2022

8 February 2022

 

ECO (ATLANTIC) OIL & GAS LTD.

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

 

Definitive Share Purchase Agreement with Azinam signed

Planning underway for drilling on Block 2B, South Africa, in H2 2022

Further to the announcement on 10 January 2022, Eco (Atlantic) Oil & Gas
Ltd. (AIM: ECO, TSX ‐ V: EOG), the oil and gas exploration company
focused on the offshore Atlantic Margins, confirms that it has signed a
definitive Share Purchase Agreement ("SPA") to acquire 100% of Azinam Group
Limited ("Azinam") (the "Acquisition") in return for a 16.5% equity stake in
the Company.

 

The Acquisition is expected to complete in two to three weeks pending TSX-V
approval, at which time a further announcement will be made.

 

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

 

"We are very pleased to have signed the final definitive SPA to acquire Azinam
Group. This now puts the Company a step further towards joining all of
Azinam's offshore exploration acreage into our broader portfolio.

 

"We are working towards drilling a well on Block 2B, a highly prospective play
in the Orange Basin, offshore South Africa, close to the recent discovery by
Shell and Qatar Energy in the Orange Basin in Namibia. The well is planned for
the second half of this year. The Company also anticipates drilling a further
exploration well in Guyana following this. Eco (the designated Operator),
along with the Block partners at Africa Energy and Panoro, believe that Block
2B, which already has an established oil discovery, possesses considerable
upside potential. We also evaluate that Block 3B/4B, with the Block Partners
at Africa Oil and Ricocure in the Orange Basin, South Africa, is directly
correlated to the Graff-1 well, which was announced on Friday 4 February 2022
by Namcor and block partners as a light oil discovery in the primary and
secondary targets. We look forward to firming up our exciting drilling plans
and updating our shareholders on the funding structure and timing of the wells
in due course."

 

Further Information on the Acquisition

 

Azinam is a wholly owned subsidiary of Azinam Holdings Limited (the "Vendor"),
which is majority owned by Seacrest Capital Group ("Seacrest"). Azinam has
successfully built a material offshore petroleum assets base in Namibia and
South Africa. Pursuant the definitive share purchase agreement and completion
of the Acquisition, Eco Atlantic will issue to the Vendor 40,170,474 new
common shares in Eco, providing the Vendor, ceteris paribus, with 16.5% of
Eco's share capital as enlarged by such issue ("Enlarged Share Capital"),
providing for a cashless acquisition to become the sole owner of Azinam's
entire African portfolio.

 

Offshore South Africa, Orange Basin, Eco Atlantic will acquire 50% Working
Interest ("WI") and Operatorship in Block 2B, where Africa Energy Corp. and
Panoro Energy ASA maintain Working Interests. Eco will also acquire a material
Working Interest of 20% in the deepwater 3B/4B Block. This further strengthens
the Company's ongoing strategic partnership with Africa Oil Corp. (Operator)
where each will hold a 20% Working Interest.

 

Offshore Namibia, Eco will acquire additional Working Interests in its current
oil blocks where Azinam is a partner, being Petroleum Exploration Licenses
("PELs") #97, #98 and #99. Eco's resultant net Working Interest in these PELs
will be 85% on completion. Working Interests on these Blocks will then align
with the Company's existing 85% interest in PEL #100, and Eco is the Operator
on all four PELs.

 

Completion of the Acquisition ("Completion") is subject, inter alia, to
requisite approvals from the Government of South Africa, the Government of
Namibia and the TSX Venture Exchange.

 

In addition to the shares issuance, the Vendor will be issued warrants over
new common shares in Eco ("Warrantholder"), exercisable only in case of a
producible commercial discovery on Block 2B or Block 3B4B, as follows:
20,000,000 warrants exercisable at a price of CAD$1.00 per share during the
twenty-four month period immediately following Completion, and 20,000,000
warrants exercisable at a price of CAD$1.50 per share during the thirty-six
month period immediately following the Completion, such exercise dates to be
extended in the event a well is not drilled on Block 2B or Block 3B4B, until
such time as a well is drilled on either Block and a producible commercial
discovery declared. At no time will the Warrantholder be entitled to subscribe
for and purchase such amount of common shares in Eco which, when aggregated
with its already exiting ownership of common shares, would result in the
Warrantholder being the registered or beneficial holder of more than 19.9% of
the then issued and outstanding common shares of Eco, without the prior
written consent of TSXV and Eco and in accordance with the policies of the TSX
Venture Exchange.

 

In addition, the Vendor will enter into a lock-in agreement to restrict the
sale of the consideration shares until the earlier of: the spudding of a well
on Block 2B; or, 6 months following Completion in respect of a third of the
consideration shares, with two equal further tranches being released from the
lock-in 12 and 18 months following Completion

 

As at 30 September 2021, Azinam's unaudited financial statements showed that
it had total assets of approximately US$2 million, liabilities to third
parties of approximately US$1.3 million, and, in the nine months to 30
September 2021, recorded net income of approximately US$1.3 million.

 

Discussions are continuing with Eco's key existing stakeholders in relation to
underwriting the funds required and to participate directly in the 2022 Block
2B South Africa drilling programme.

 

Erik Tiller, Co-founder and CEO of Seacrest Capital Group also commented:

 

"We are very pleased to have signed the SPA between Eco and Azinam that will
create a larger exploration company that will be better positioned to take
advantage of value accretive E&P opportunities."

**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 Marketing and IR                    +44(0)781 729 5070 | +1 (416) 318 8272
 Strand Hanson Limited (Financial & Nominated Adviser)

                                                            +44 (0) 20 7409 3494
 James Harris

 Rory Murphy

 James Bellman

 Berenberg (Broker)                                         +44 (0) 20 3207 7800
 Matthew Armitt

 Emily Morris

 Detlir Elezi

 Celicourt (PR)                                             +44 (0) 20 8434 2754
 Mark Antelme

 Jimmy Lea
 Hannam & Partners (Research Advisor)
 Neil Passmore                                              +44 (0) 20 7905 8500

 

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).

 

Notes to editors:

 

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 consuming oil and
gas in stable emerging markets near to infrastructure.

 

Offshore Guyana in the proven Suriname-Guyana Basin, the Company holds a 15%
Working Interest in the 1,800 km(2) Orinduik Block Operated by Tullow Oil,
and also indirectly through a 6.4% shareholding in JHI Associates Inc. a
private company which holds a 17.5% WI in the 4,800km(2) Canje Block Operated
by ExxonMobil. In Namibia, the Company holds Operatorship and 85% Working
Interests in four offshore Petroleum Licences: PEL's: 97, 98, 99 and 100
totalling 28,593 km(2) in the Walvis Basin.

 

Offshore South Africa, Eco holds Operatorship and 50% WI of Block 2B, and 20%
Working Interest of Blocks 3B/4B and Nearshore 3B/4B, totalling some 21,603
km(2).

 

Eco Atlantic is also a 100% shareholder in Solear Ltd., Solear is an
independent private clean energy investment company focused on low cost, high
yield solar development projects in southern Europe.

 

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