Eco (Atlantic) Oil & Gas Ltd. has announced a strategic farm down in Block 3B/4B, offshore the Republic of South Africa, as part of an aggregate 57% farm down transaction with TotalEnergies and QatarEnergy. Upon completion of the transaction, Eco will retain a 6.25% interest in Block 3B/4B. The maximum transaction value, including carry, is up to US$32.1m to Eco, which includes payments due to Eco from Africa Oil and Ricocure under previously announced agreements.
The transaction will deliver staged cash payments to Eco, comprising a total cash payment of US$11.92m, with Eco also receiving a full carry of its 6.25% retained share of all JV costs, up to a cap, repayable to TotalEnergies and QatarEnergy from production. This is expected to be adequate to fund the company's share of drilling for up to two wells on the license.
Gil Holzman, Co-founder and Chief Executive Officer of Eco Atlantic, expressed delight in signing the agreement with TotalEnergies and QatarEnergy, emphasizing the potential of Block 3B/4B as an area for offshore oil and gas exploration and development. He also thanked partners at Africa Oil and Ricocure for their cooperation in negotiating the farm out agreement.
The completion of the transaction is subject to the satisfaction of customary conditions precedent, including the receipt of requisite regulatory approvals from the government of South Africa. Upon completion, the Block 3B/4B interests of the JV partners will be as follows: TotalEnergies EP South Africa B.V. (33%), QatarEnergy International E&P LLC (24%), Africa Oil SA Corp (17%), Azinam Limited (6.25%), and Ricocure (Proprietary) Limited (19.75%).
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. The company 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.