Eco Atlantic Oil & Gas (LSE:ECO) has received final ministerial approval for the transfer of a 60% participating interest in three offshore Namibian petroleum exploration licences to BP Namibia Energy.
The approval from Namibia’s Ministry of Industries, Mines and Energy represents the final regulatory requirement for the farm-down transaction. Completion is expected shortly, after which BP will become operator of the Cooper, Guy and Tamar licences in the Walvis Basin.
Under the transaction, Eco will receive a one-time cash payment of US$2.7 million and retain a 25% participating interest in each of the three licences.
BP will carry Eco’s share of exploration expenditure during the current licence phase. The planned work includes seismic reprocessing and the acquisition of at least 3,000 km2 of new 3D seismic data.
Eco will also have options during the next licence renewal period to reduce its funding exposure further through additional carried interests relating to drilling activities.
The three petroleum exploration licences, PEL97, PEL99 and PEL100, cover a combined area of 22,893 km2 in Namibia’s offshore Walvis Basin. Eco currently operates the licences with an 85% working interest, which will fall to 25% in each licence following completion of the BP transaction.
The joint venture also includes Namibia’s national petroleum company NAMCOR and local partners.
Eco said its operational priorities following the advancement of transactions in Namibia and South Africa include completing production sharing agreement negotiations in Guyana and its planned acquisition of JHI.
About Eco Atlantic Oil & Gas
Eco Atlantic Oil & Gas is a Toronto-based oil and gas exploration company listed on AIM and the TSX Venture Exchange, with offshore interests in Guyana, Namibia and South Africa.
In addition to its Namibian portfolio, the company holds interests in South African offshore blocks 3B/4B and 1 CBK and operates the Orinduik Block offshore Guyana.
Eco’s exploration portfolio focuses on offshore Atlantic Margin basins, with the company using farm-down transactions and carried interests as part of its approach to funding exploration activities.
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