LONDON, UK: Eco Atlantic Oil & Gas Ltd., an exploration company focused on the offshore Atlantic Margins, has agreed to sell a 6.25% interest in Block 3B/4B, offshore South Africa, to its partner and operator Africa Oil Corp. for up to US$10.5m in cash.
The deal, which is subject to regulatory approvals from the South African government and the TSX Venture Exchange, will reduce Eco Atlantic’s stake in the block to 20%, while increasing Africa Oil’s stake to 26.25%. The remaining 53.75% is held by Ricocure.
The cash consideration will be paid in four instalments, linked to certain milestones, including the completion of a farm-out process to a third party and the spud of the first exploration well in the block.
Eco Atlantic said the deal would strengthen the joint venture’s position amid ongoing negotiations with potential farm-in partners and support its growth opportunities elsewhere.
The company also confirmed that it would issue 1.2 million new shares to Lunn Family Trust as the final payment for acquiring an additional 6.25% interest in the block in June 2022.
Gil Holzman, CEO of Eco Atlantic, said: “We are very pleased to agree this transfer of a portion of our WI on the Block to our strategic alliance partner Africa Oil. The restructure of the WI will result in Africa Oil holding 26.25% and Eco 20% and will strengthen the JV position amid ongoing negotiations with third parties to farm into the Block and execute a drilling campaign.”
He added: “We look forward to continuing our work with the South African government and regulatory bodies in terms of our Environmental Authorisation process and in the active exploration of Block 3B/4B.”
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