Africa Oil Corp. said on Nov. 13 it has entered into a strategic partnership with Eco Atlantic Oil & Gas Ltd. for exploration in West Africa and Guyana.
Africa Oil has agreed to acquire a 19.77% shareholding in Eco through the purchase of 29.2 million common shares at CA$0.48 (US$0.38) per share for a total consideration of CA$14 million (roughly US$11 million).
The agreement also states Africa Oil has the right to participate in any future Eco equity issuances and to appoint one nominee to Eco’s board of directors. Keith Hill, president and CEO of Africa Oil, will join the Eco board of directors as soon as practicable.
The parties also entered into a strategic alliance agreement, where they will jointly pursue new exploration projects. Africa Oil will be entitled to bid jointly on any new assets or ventures proposed to be acquired by Eco. Additionally, Africa Oil will also have a right of first offer on the farm out of exploration properties currently held by Eco.
Eco has been able to assemble an exploration portfolio in two countries, including four blocks in Namibia and one block in Guyana. The 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 de-risk the play.
In Guyana, Eco holds a block directly updip from the Stabroek Block on which ExxonMobil Corp. (NYSE: XOM) estimates resources of 2.5 billion barrels of oil equivalent (Bboe) to 2.8 Bboe, including the Liza Field. The Eco block is expected to be fully delineated after processing and interpretation of the 2,550 sq km 3-D seismic survey recently completed in September.
Eco also recently entered into an option agreement for a farm-in by Total SA (NYSE: TOT) on this Guyana acreage.