EOI - Eco Atlantic Oil & Gas announces biggest deal to date with Orange Basin farmout
(NewsDirect)
Eco (Atlantic) Oil & Gas Ltd hasannounced a significant agreement involving a 13.75% participatinginterest in their Orange Basin Block 3B/4B, with strategic partnersTotalEnergies and QatalEnergy.
Thisdeal, described as the largest in the company's history, isnoteworthy for several reasons. Firstly, Total Energies, now theoperator, brings a deep understanding of the Orange Basin, enhanced byits recent discoveries in the same geology in Namibia. Secondly, thestrategic location of Eco's block, adjacent to other areasoperated by Total Energies, promises synergies, especially since TotalEnergies possesses drilling rigs in the vicinity, ensuring operationalreadiness.
Financially, thetransaction is expected to significantly bolster Eco's cashposition by almost $20 million, positioning the company five timesabove its current standing upon commencement of drilling. Moreover,Eco is fully carried for the forthcoming exploration activities,potentially covering two wells on the block.
The total transaction value could reachover $32 million, encompassing both cash and the value of the carryfor Eco’s remaining work interest. The agreement includes milestonepayments, contingent upon deal completion, regulatory approvals, andthe commencement of drilling.
The drilling schedule is underTotal Energies’ discretion, anticipated within the next 12 to 18months. Following this farmout, Eco aims to replicate its success inother ventures, focusing on its Guyana and Namibian assets, withongoing discussions for potential partnerships expected to culminatein 2024.
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