Eco (Atlantic) Oil & Gas has started the farm-in process into Block 1 offshore South Africa Orange Basin, while confirming it is relinquishing its 50% working interest operated offshore Block 2B in South Africa.
Through its 100% owned subsidiary Azinam South Africa Limited, the company will farm-in and acquire a 75% Working Interest from Tosaco Energy and will become operator of a new exploration.
Tosaco intends to transfer its remaining 25% Interest to OrangeBasin Oil and Gas - a newly formed South African entity with a Broad-Based Black Economic Empowerment (B-BBEE) rating.
Block 1 is 19,929km2 in area and is located on the Namibian Border in South Africa. The triangular shaped block is located offshore in the Orange Basin.
The eastern side of the block is approximately 174km off the South African shoreline, and the block reaches out some 263km west into deep water in the Orange Basin.
Under the terms of the 75% working interested farm-in acquisition, Eco Atlantic has agreed $150,000 to be payable upon signing, $225,000 payable upon issuance of Section 11 (Government title transfer) and $375,000 payable upon a TSX-V/AIM compliant Resource Report to be commissioned by the company.
The company 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.
The block has significant 2D and 3D seismic data already completed and no additional seismic acquisition or drilling of wells is planned in the three-year carried period.
During this period, Eco Atlantic will complete the interpretation and analysis required for its planned Work Program with its in-house exploration team. The farm-in is subject, inter alia, to normal governmental approvals and no field activity is currently planned that requires environmental permitting.
In addition, the company has confirmed that it is relinquishing its 50% working interest operated offshore Block 2B in South Africa where it drilled its 2022 Gazania-1 well offsetting the AJ-1 oil discovery.
Eco Atlantic said it has completed all necessary documentation, and environmental audits, and has informed the Petroleum Agency of South Africa (PASA), being the regulator for the Government of South Africa.
The company’s board considers Block 2B a non-core asset in the portfolio given its interests in Namibia, Block 3B/4B and Block 1 in South Africa and in Guyana. Following acceptance by the PASA of this relinquishment, the company will have no further liability in respect of Block 2B.
"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 Atlantic will have one of the largest blocks in the entire Orange Basin. This is a strategic play for Eco Atlatic that we have worked on over the past year, focusing 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. With the reach of the block some 250km 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,” said Colin Kinley, Co-founder and Chief Operating Officer of Eco Atlantic.