Eco (Atlantic) Oil & Gas Ltd. has announced a significant transaction with Africa Oil Corp., involving the sale of 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 C$ 11.5m. This deal will result in a reduction of Eco's overall share count by approximately 15%, providing shareholders with a less dilutive exposure to the company's strategic exploration portfolio in Namibia, South Africa, and Guyana.
The transaction involves the Assignment and Share Cancellation Agreement, through which Azinam Limited, a wholly owned subsidiary of Eco, will sell and assign a 1% Participating Interest in Block 3B/4B offshore the Republic of South Africa to Africa Oil SA Corp in exchange for the cancellation of all common shares and warrants held by Africa Oil. Upon completion of the Exchange Transaction, Eco will hold a fully carried 5.25% interest in Block 3B/4B Offshore South Africa, reducing from the current 6.25%.
As part of the deal, Africa Oil has entered into a lock-up agreement, restricting it from trading, transferring, or dealing in any of the Eco Securities until the completion of the transaction. This transaction is expected to reduce Eco's issued and outstanding common share capital to 315,231,936 Common Shares, from the current 370,173,680 Common Shares.
In addition to the transaction, Eco provided updates on its activities in Guyana and Namibia. In Guyana, the company is actively engaged in a farmout process for the offshore Orinduik Block, while in Namibia, a multi-block farmout process is underway for all or part of Eco's four offshore Petroleum Exploration Licences. The company continues to focus on conducting exploration campaigns in global hydrocarbon hotspots, such as the Orange basin in South Africa, the Walvis basin in Namibia, and in Guyana.
Gil Holzman, Co-founder and Chief Executive Officer of Eco Atlantic, expressed his satisfaction with the transaction, highlighting the benefits it brings to the company's shareholders. Dr. Roger Tucker, President and CEO of Africa Oil, also commented on the mutually beneficial nature of the transaction, expressing gratitude for Eco Atlantic's collaborative approach.
The company plans to provide further updates to its shareholders over the rest of 2024, as it continues to focus on its exploration activities in various regions.