Eco Atlantic Oil & Gas announces biggest deal to date with Orange Basin farmout
London, UK
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March 08, 2024 09:38 AM Eastern Standard Time
Eco (Atlantic) Oil & Gas Ltd has announced a significant agreement involving a 13.75% participating interest in their Orange Basin Block 3B/4B, with strategic partners TotalEnergies and QatalEnergy.
This deal, described as the largest in the company's history, is noteworthy for several reasons. Firstly, Total Energies, now the operator, brings a deep understanding of the Orange Basin, enhanced by its recent discoveries in the same geology in Namibia. Secondly, the strategic location of Eco's block, adjacent to other areas operated by Total Energies, promises synergies, especially since Total Energies possesses drilling rigs in the vicinity, ensuring operational readiness.
Financially, the transaction is expected to significantly bolster Eco's cash position by almost $20 million, positioning the company five times above 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 reach over $32 million, encompassing both cash and the value of the carry for Eco’s remaining work interest. The agreement includes milestone payments, contingent upon deal completion, regulatory approvals, and the commencement of drilling.
The drilling schedule is under Total Energies’ discretion, anticipated within the next 12 to 18 months. Following this farmout, Eco aims to replicate its success in other ventures, focusing on its Guyana and Namibian assets, with ongoing discussions for potential partnerships expected to culminate in 2024.
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