Africa Oil Corp. buys stake in Eco Atlantic
Canadian company Eco Atlantic, with offshore assets in Namibia and Guyana, has sold 19.77% interest in the company to Africa Oil. Corp for $10.9 million.
Africa Oil Corp. has taken hold of the 19,77 percent stake in Eco through the purchase of 29.2 million common shares at CAD$0.48 per share. The company $14.0 million Canadian dollars (around US$10.9 million).
As part of the agreement, Africa Oil Corp. will be able to appoint one nominee to Eco Atlantic’s board, and will have the right to take part in further equity issuances of Eco. Keith Hill, President and CEO of Africa Oil corp, will join the Eco Atlantic board of directors “as soon as practicable.”
Through the acquisition, Africa Oil Corp. is getting access to Eco’s exploration assets in Namibia and Guyana.
According to Africa Oil Corp, Eco’s Namibia blocks are located in an area of proven source rocks and large, seismically-defined stratigraphic traps where upcoming wells by neighboring operators will be drilled in the near future to derisk the play.
In Guyana, Eco Atlantic holds a block “directly updip from the Stabroek block on which Exxon estimates resources of 2.5 billion to 2.8 billion oil-equivalent barrels, including the supergiant Liza field.”
“The ECO block exhibits good evidence of slope fan prospects and is expected to be fully delineated after processing and interpretation of the 2,550km2 3D seismic survey recently completed in September,” Africa Oil Corp. said
ECO also recently announced it has entered into an option agreement for a farm-in by the French oil giant Total on this Guyana acreage.
The two companies have also entered into a deal under which they will jointly pursue new exploration projects.
Africa Oil Corp. will be entitled to bid jointly on any new assets or ventures proposed to be acquired by ECO, on the same terms as ECO and for an interest at least equal to the Company’s percentage holding of the common shares in ECO from time to time. It will also have a right of first offer on the farm-out of exploration properties currently held by ECO.
Africa Oil CEO Keith Hill said: “We are very excited to be joining this talented group of explorers who have been able to secure top quality blocks in prime exploration areas. We look forward to realizing the value of this acreage and believe we will be able to play a positive role in the expansion of their portfolio. The pace of exploration is increasing in these regions with large indepedents and even super-majors taking big acreage positions with aggressive drilling plans over the next few years. This alliance will help us take advantage of this upswing in activity.”