TORONTO – Eco (Atlantic) Oil & Gas Ltd. (TSX-V:EOG) (NSX:EOG) is decreasing its near- to mid-term financial obligations by farming out part of its offshore Namibian licenses for carry and cash, and has revised and reduced its next-year work program in Namibia.
Through its wholly owned subsidiary, Eco Oil and Gas (Namibia) (Pty) Ltd. (Eco Namibia), Eco Atlantic has entered into an amended and restated farm-out agreement with AziNam Ltd., 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 $3.65 million in cash and will further reduce its financial commitments on its offshore petroleum blocks.
Eco Atlantic has also agreed with Namibia’s Ministry of Mines and Energy to delay planned 3D survey programs on its Guy and Sharon blocks to March 2016. Pursuant to the agreement, Eco Atlantic will transfer an additional 10% participating interest in blocks 2111B and 2211A offshore Namibia (the Guy block) to AziNam, in exchange for AziNam funding $1 million for 100% of a completed 1,000-km (621-mi) 2D seismic survey and associated processing. AziNam will also pay for 66.44% of an 800-sq-km (309-sq-mi) 3D seismic program on the Guy block, which is 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 previously announced farm-out. Post-transaction, Eco Atlantic will transfer operatorship of the Guy block to AziNam, and, following the closing of the transaction, will hold a 50% participating interest. NAMCOR has a 10% carried interest.
Eco Atlantic has also agreed to transfer an additional 10% participating interest in blocks 2213A and 2213B offshore Namibia (the Sharon block) to AziNam in exchange for the full carry of 3,000 km (1,864 mi) of recent 2D data acquired on this block. Further, AziNam will fund 54% of a 1,000-sq-km (386-sq-mi) 3D seismic survey to be completed in the next 15 months. Through Eco Namibia, Eco Atlantic currently holds a 70% participating interest in the Sharon block. Following the closing of the transaction, Eco Atlantic will hold a 60% participating interest in the Sharon block and maintain operatorship. NAMCOR has a 10% carried interest.
Eco Atlantic has 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, Eco Atlantic currently holds a 45% participating interest in the Cooper block. Post-transaction, Eco Atlantic will hold a 32.5% carried interest in the Cooper block. AziNam will hold 32.5%, Tullow Oil will hold a 25% working interest, and NAMCOR will have a 10% carried interest in the block.
Closing of the transaction is subject to regulatory approvals by Namibia’s Ministry of Mines and Energy.