Photo: Stena Carron drillship; Source: Stena Drilling

Eco Atlantic enters ExxonMobil’s Canje block off Guyana

Oil and gas exploration company Eco Atlantic has increased its position in Guyana through the acquisition of an interest in the ExxonMobil-operated Canje offshore block, gaining access to a high impact two-well drilling programme.

Guyana blocks
Guyana blocks; Source: Westmount

Eco Atlantic said on Monday it had closed a transaction with JHI Associates Inc. (JHI), a private company headquartered in Canada, for Eco to acquire up to a 10 per cent interest in JHI and to appoint Keith Hill, a non-executive Director of Eco, to the JHI Board.

The transaction provides Eco with immediate exposure to a current active drilling program in the Canje Block offshore Guyana. The Canje Block is operated by ExxonMobil and is held by working interests partners Esso Exploration & Production Guyana Limited (35%), with Total (35%), JHI Associates (BVI) Inc. (17.5%), and Mid-Atlantic Oil & Gas Inc. (12.5%).

JHI is a Guyana pure-play deepwater exploration company founded in 2011. In 2014, JHI teamed up with Guyana-based Mid-Atlantic Oil & Gas, which was awarded the Canje Block in 2015. In 2016, ExxonMobil joined the Canje Block as the operator, and in 2018 TotalEnergies farmed into the block.

Five years of extensive technical and seismic data analysis led to the Canje partners identifying multiple drillable prospects and successfully applying for a multi-well drilling permit. The 2021 multi-well exploration programme on the Canje Block seeks to test the extension of the prolific hydrocarbon system which has resulted in over 9 billion barrels of oil equivalent of recoverable resources being discovered in the adjacent Stabroek Block since 2015.

This deal will increase Eco Atlantic’s presence in the Guyana-Suriname basin to include a three-well drilling programme, with the first two firm wells on the Canje Block drilling in 2021 and at least one on the Orinduik Block, subject to partner approval.

Drilling campaign in progress

The Jabillo-1 well is currently being drilled on the Canje Block utilizing the Stena Carron drillship with results expected in July. The Sapote-1 well is scheduled to be drilled later this year in 3Q by the Stena DrillMax in the eastern portion of the Canje Block, which Eco will also have exposure to through its now shareholding in JHI.

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The two-well drilling program currently underway on the Canje Block offers Eco near-term, low-risk exploration drilling catalysts with significant upside. JHI is carried on the costs for the drilling of the first well, Jabillo-1 and would also be carried for an offsetting appraisal well in the case of a discovery on Jabillo-1. The Canje Block partners have also committed to drill the Sapote-1 well later this year in 3Q 2021.

Led by ExxonMobil as the operator and technical lead, the wells offer an opportunity to participate in an anticipated extension of the Stabroek Block Oil Discovery trend building on the over 9 billion BOE barrels equivalent offshore Guyana already discovered, according to Eco.

Eco Atlantic has funded the JHI Investment through its own cash reserves and an associated private placement with its strategic partner Africa Oil Corp. and with Charlestown Energy, a private equity firm based in New York, to raise additional funds of approximately 6.1m CAD ($4.9m). The private placement was completed on Monday.

Gil Holzman, Co-Founder and Chief Executive Officer of Eco Atlantic, commented: “While we eagerly anticipate resuming drilling activity on our Orinduik block next year, pending partner approvals, and we have made sure to preserve sufficient funding for that, we are very excited that we now have two imminent Guyana wells in our portfolio as well as additional multiple prospects inventory on the Canje Block.

“Since 2014, Eco has strongly focused on the hydrocarbon potential offshore Guyana, and this strategic deal with JHI marks the beginning of a wider presence and potential increased future collaboration in the basin”.

Keith Hill, Non-Executive Director of Eco Atlantic and President and CEO of Africa Oil, further commented: “We are very pleased to have Eco team up with the two most knowledgeable operating partners in the basin and believe the Canje Block has the potential to hold resources comparable to the world-class Stabroek Block which is undoubtedly the most successful exploration campaign in recent history.

“Combining this with the holdings in the Orinduik Block, Eco is well-positioned to be part of the historic oil development in Offshore Guyana”.