EOG:CC - Eco (Atlantic) Oil & Gas' $10.5mln deal has a broad effect without diluting shareholders
(NewsDirect)
Eco (Atlantic) Oil & Gas Ltd CEO GilHoltzman speaks to Thomas Warner from Proactive London following thenews that the exploration company has agreed a deal to sell a partialstake (6.25%) in the Block 3B/4B asset offshore South Africa forUS$10.5mln.
Buyer Africa Oil willpay in cash, split across multiple tranches tied to projectmilestones. It initially gets US$2.5mln following the signing of thesales agreement, then US$2.5mln is due once the government approvesthe deal. After that, US$4mln will be due if/when Africa Oil farms outa stake and US$1.5mln comes due when the project’s first well isspudded.
A joint farm-out processcontinues with the aim of bringing in a new partner that could take upto 55% of the project. Holtzman explains the rationale for thetransaction, which he suggests is part of a broader plan that willbecome clearer as the summer goes on.
"There's not too much I can say... but pay closeattention and have a look at our announcement(s) in the coming fewmonths and that will basically paint the bigger picture that we'reworking on." Holtzman says that the strategic move has so farreceived positive feedback from "sophisticated investors... whounderstand the rationale and what it entails for company goingforward."
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