Eco closing in on Orange Basin block operatorship

AIM-listed and Canada-headquartered oil and gas company Eco (Atlantic) Oil & Gas is drawing closer to finalizing the acquisition of a stake allowing it to become the operator of an exploration block in the Orange Basin offshore South Africa.

The Canadian firm said it is in the final stages of securing the required regulatory approval to complete the transfer of the interest and formalize operatorship in Block 1 offshore South Africa, which is expected in the near term.

Colin Kinley, Co-Founder and COO of Eco Atlantic, commented: “The Orange Basin has rapidly emerged as one of the most compelling hydrocarbon fairways globally, with recent multi-billion-barrel discoveries adjacent in Namibia extending directly into the geological runway of  Block 1.

“This asset provides Eco with material exposure across a full-margin basin play-ranging from proven, gas-rich inboard sections to oil-prone targets in the deepwater and ultra-deepwater domain.”

As announced in June 2024, Eco’s wholly owned subsidiary, Azinam South Africa, entered into a farm-in agreement with Tosaco Energy to acquire a 75% working interest and operatorship in Block 1.

Block 1 spans 19,929  square kilometers offshore South Africa, along the Namibian border. It extends from the shore to the continental shelf, some 175 kilometers offshore, and approximately 263 kilometers out into deep water.

Water depths range from shallow shelf (around 200 meters) to deepwater (around 1,000 meters), which is expected to enable a full spectrum of play types. The acreage is considered geologically analogous to the Kudu gas field to the north.

Eco will assume operatorship of the block once final regulatory approval is obtained. As the current exploration right budget and work plan do not involve field operations, the program proceeds without the need for additional environmental permitting for immediate interpretation and technical work to progress.

The Canadian firm said it has completed the acquisition of a “substantial” volume of 3D and 2D legacy data for Block 1 from the Petroleum Agency South Africa (PASA). This includes two 3D seismic surveys totalling 3,500 square kilometers, over 20,000 line kilometres of 2D seismic, and three key exploration well logs for wells AF-1, AO-1, and AE-1 drilled on the block in the late 1980s by Soekor, South Africa’s former state oil company.

At AF-1, a gas discovery was confirmed with tested flow rates of 32.4 MMscfd. Encountered gas shows and oil indications were identified at AE-1, while key stratigraphic data and reservoir markers were provided for AO-1.

All three wells were part of Soekor’s regional Orange Basin program and offer critical calibration for seismic interpretation and future prospect de-risking.

The data is described as being of high-resolution quality and processing-ready, meaning that no reprocessing or reconditioning is required. Furthermore, seismic surveys are said to offer full coverage across key structural and stratigraphic targets, from inboard gas-prone zones to outboard oil-charged systems.

“This strategic acquisition of high-quality 2D and 3D seismic, along with historic well logs deliver massive value to the company. This acquisition is currently conservatively estimated to replace US$50-60 million in acquisition costs required for new exploration,” noted Kinley.

“The data quality enables us to aggressively pursue subsurface interpretation and prospect ranking immediately. This dataset provides a robust foundation for accelerated prospect maturation and the opportunity to consider potential farm-out and partnership conversations,”

Commenting on future plans, the firm said it remains focused on disciplined, value-driven exploration and is committed to sourcing leading technical opportunities and delivering substantial long-term value to its shareholders through partnerships and high impact exploration wells.

In line with this, the company’s COO provided updates on other operations in Africa. According to him, the firm is actively negotiating farm-out and drilling participation opportunities on the Orinduik Block in Guyana in parallel with the South African work program. The firm increased its shareholding in the block by buying a stake from Tullow in 2023.

Furthermore, the Walvis Basin acreage in Namibia, comprising the Cooper (PEL97), Sharon (PEL98), Guy (PEL99), and Tamar (PEL100) licenses, is receiving what Kinley says is strong interest, particularly the ultra-deepwater blocks. This is interpreted to be the result of the Orange Basin real estate becoming increasingly competitive. The company continues to engage with industry and government stakeholders to advance partnerships across these positions.

Finally, the fully carried 5.25% interest in Blocks 3B/4B in South Africa is said to offer unique upside potential, both on completion payment of farm down costs to Eco and drilling the resource opportunity assessed on the block. The block’s operator is TotalEnergies.

Orange Basin has received a lot of attention from global majors in recent years. TotalEnergies made the Venus-1 discovery and Shell Graff-1, La Rona, and Jonker-1X.

More recently, oil discoveries were made by Galp (Mopane 3-X) and Rhino Resources (Capricornus 1-X), while TotalEnergies was less lucky with its Marula-1X well.