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Tuesday, January 6, 2015
Eco (Atlantic) Oil & Gas has come to terms with Azinam Ltd. for a farm-out agreement. Through its wholly owned subsidiary Eco Oil & Gas (Namibia) the company has entered into an amended and restated farm-out agreement with Azinam, amending and restating the terms of the farm-out agreement dated April 12, 2012, among the parties.
Pursuant to the agreement, Eco Atlantic will receive a total of approximately $3.65 million in cash and will further reduce its financial commitments on its offshore petroleum blocks.
The company is also announced that it has agreed with the Namibian Ministry of Mines and Energy to delay current planned 3D seismic survey programs on its Guy and Sharon Blocks by at least one year to March 2016.
On the Guy Block, pursuant to the agreement, the company has agreed to transfer an additional 10% participating interest in Blocks 2111B and 2211A offshore Namibia to Azinam, in exchange for Azinam funding $1 million for 100% of the recently completed 1,000-km 2D seismic survey and associated processing. Azinam will also pay for 66.44% of an 800-sq km 3D seismic program over the block which is expected to be completed within the next 15 months. In addition, Azinam will pay $150,000 in cash.
Eco Atlantic currently holds a 60% participating interest in the Guy Block subject to regulatory approval of the previously announced farm out. Post the transaction, the company will transfer operatorship of the block to Azinam, and following the closing of the transaction set out in the agreement, its new holding will be a 50% participating interest. NAMCOR has a 10% carried interest.
In regards to the Sharon Block, Eco Atlantic has agreed to transfer an additional 10% participating interest in Blocks 2213A and 2213B offshore Namibia to Azinam in exchange for the full carry of 3,000 km of recent 2D data acquired on this block. Further, Azinam will fund 54% of a 1,000-sq km 3D seismic survey to be completed in the next 15 months.
Through Eco Namibia, the company currently holds a 70% participating interest in the Sharon Block. Following the closing of the transaction set out in the agreement, the Company will hold a 60% participating interest in the Sharon Block and maintain operatorship. Namcor has a 10% carried interest.
The company has also agreed to transfer an additional 12.5% participating interest in Block 2012A offshore Namibia, the Cooper Block, to Azinam in exchange for $3.5 million in cash. Azinam’s working commitments on the Cooper Block were not amended by the agreement.
Through Eco Namibia, the company currently holds a 45% participating interest in the Cooper Block. Following the closing of the transaction, it will hold a 32.5% carried interest in the Cooper Block; Azinam will hold 32.5%, Tullow Oil holds a 25% working interest, and Namcor has a 10% carried interest in the block.
The closing of the transaction set out in the agreement is subject to regulatory approvals by the Ministry of Mines and Energy of Namibia.
Gil Holzman, CEO of Eco Atlantic stated: “We are delighted to have the opportunity to enter into this transaction with our long time strategic block partner, Azinam. With the significant reduction of our financial commitments on the blocks over the short to medium term on the one hand, and with earning meaningful cash contribution on the other, we are perfectly positioned to further progress our offshore licenses in Namibia together with our partners Azinam and Tullow Oil, and explore additional opportunities.
“We have illustrated the company’s ability to raise finance while maintaining majority ownership in our very prospective Namibian assets. Eco Atlantic recognizes the current instability in the upstream exploration sector and has structured its assets for maximum growth with tight control of capital. We are proud of our resourcefulness, enabling us to continue to create shareholder value for the longer term when Namibia offshore, and especially Walvis Basin, will prove to be oil prone. We are very happy with the implied Blocks value, as it reflects from our recent transactions with Tullow Oil and with Azinam.”
AziNam MD, David Sturt, commented: “These transactions demonstrate our belief and long term commitment to unlocking the hydrocarbon potential of offshore Namibia, within the Walvis Basin. AziNam is the leading international E&P company offshore Namibia, with a 67,000 sq km acreage position of largely contiguous exploration license.”
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