Illustration; Source: Eco Atlantic

Oil & gas firm picks up block in ‘prolific’ Orange Basin and drops another one in South Africa

AIM-listed and Canada-headquartered oil and gas company Eco (Atlantic) Oil & Gas has set the wheels into motion to take over a majority stake and operator role at an offshore block in the Orange Basin, which is said to be on trend with recent giant oil discoveries offshore Namibia. The firm is also giving up its interest in another block off the coast of South Africa.

Illustration; Source: Eco Atlantic

Eco, through its subsidiary Azinam, has set the stage to farm into and acquire a 75% working interest (WI) in Block 1 offshore South Africa from Johannesburg-headquartered Tosaco Energy, enabling it to become the operator of a new exploration right. The African firm intends to transfer its remaining 25% stake to OrangeBasin Oil and Gas, a newly formed South African entity with a broad-based black economic empowerment (B-BBEE) rating.

The terms of the farm-in acquisition stipulate that $150,000 is payable upon signing, $225,000 upon issuance of Section 11 government title transfer, and $375,000 is payable upon a TSX-V/AIM compliant resource report to be commissioned by the AIM-listed firm, which will carry the remaining 25% interest through the budget and work program for the first three years up to an agreed sum of $2.3 million of a total work program.

As the block is said to have significant 2D and 3D seismic data already completed and no additional seismic acquisition or drilling of wells planned in the three-year carried period, Eco will complete the interpretation and analysis required for its planned work program with its in-house exploration team during this period. This acquisition is subject, among others, to standard governmental approvals. Currently, no planned field activity requires environmental permitting.

Colin Kinley, Co-founder and Chief Operating Officer of Eco Atlantic, commented: “The Orange Basin continues to prove to be one of the newest and most prolific plays in the world and is running similar statistics to our Guyana play. Following completion of this farm-in, Eco will have one of the largest blocks in the entire Orange Basin.

“This is a strategic play for Eco that we have worked on over the past year, focussing on both oil and gas potential, and where we believe there are significant near shore prospective gas resources. There are inboard gas discoveries on the block, Kudu to the North, and multiple discoveries in the Ibhubesi field to the South.”

Covering 19,929 km2 in area, Block 1 is located in the Orange Basin on the Namibian border in South Africa. While the eastern side of the triangular-shaped block is approximately 174 km off the South African shoreline, the block stretches out some 263 km west into deep water in the Orange Basin.

“With the reach of the block some 250 km out into the Atlantic, this puts the west end of the block into highly prospective opportunities for oil being just south and on trend with Shell’s Graff discovery and Galp’s Mopane discoveries, and North of our 3B/4B Block oil targets recently farmed out to TotalEnergies and QatarEnergy,” added Kinley.

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Meanwhile, Eco has confirmed that it is relinquishing its 50% operated interest in Block 2B offshore South Africa, where it drilled its 2022 Gazania-1 well, offsetting the AJ-1 oil discovery. The firm has informed the Petroleum Agency of South Africa (PASA) about this and completed all necessary documentation and environmental audits.

This decision was taken as Eco’s board considers Block 2B to be a non-core asset in the portfolio given the company’s interests in Block 3B/4B and Block 1 in South Africa, and its assets in Namibia and Guyana. Following acceptance of the relinquishment by the PASA, the firm will have no further liability for Block 2B.

The Orange Basin has become an exploration hotspot lately with TotalEnergies’ Venus-1, Shell’s Graff-1, La Rona, and Jonker-1X, along with Galp’s Mopane oil discoveries coming to light.