Eco Announces Strategic Participation & Farm-In to Licenses Offshore Namibia

Source: www.gulfoilandgas.com 12/22/2011, Location: Africa

Eco (Atlantic) Oil & Gas Ltd is pleased to announce that it has entered into an agreement with Azimuth Ltd. (“Azimuth”), an exploration and production company jointly owned by Seacrest Capital Ltd. and Petroleum Geo-Services ASA (“PGS”). Azimuth has subscribed for C$3 million of the Company’s private placement announced December 9, 2011 and will also farm-in to Eco Atlantic’s offshore Namibia license blocks.

Pursuant to the agreement, Azimuth will acquire a 20% working interest in each of Eco Atlantic’s offshore Namibia licenses, namely the “Cooper License” (Block 2012A), the “Sharon License” (Blocks 2213A & 2213B) and the “Guy License” (Blocks 2111B & 2211A) (jointly, the “Licenses”) in return for funding 40% of the cost of 3D seismic surveys covering 2,500 square kilometers across all three Licenses, the acquisition of which is expected to cost in excess of US$25 million.

The assignment of a 20% working interest in the Licenses to Azimuth is subject to a number of conditions, including the approval of Namibia’s Ministry of Mines and Energy and the completion of a definitive farm-in agreement.

Eco Atlantic currently holds a 90% working interest in the Licenses through its wholly owned subsidiary Eco Oil and Gas Namibia (PTY) Ltd. (“Eco Namibia") and NAMCOR, the Namibian national oil and gas company, holds a 10% working interest. As a result of this transaction, Eco Namibia’s interest will be 70%, Azimuth will own a 20% interest, and NAMCOR will retain its 10% interest. Eco Atlantic, through the project management group of Kinley Exploration and Azimuth will be responsible for designing, sourcing and operating all aspects of the 3D seismic program. GMP Securities Europe LLP is acting as sole financial advisor to Eco Atlantic in this transaction.

Gil Holzman, President and Chief Executive Officer of Eco Atlantic commented, “Eco Atlantic is very fortunate to have the opportunity to jointly work with Azimuth as an equity, license and technical partner. Despite the challenging global markets, Eco Atlantic has once again displayed in a very short time its ability to execute transactions adding significant shareholder value by partnering with a group that has a significant amount of technical experience offshore West Coast Africa. This partnership will enhance the technical ability brought to analyze the licenses, thereby reducing the execution risk and strengthening the Company's technical and financial ability to perform its offshore Namibia state of the art exploration program. In addition, Azimuth’s significant participation in the private placement complementing additional participation in the current raise demonstrates their commitment and confidence in the prospectivity of the Company’s assets.”

Aaron D’Este, Managing Director of Azimuth, commented, “We are delighted to enter into partnership with Eco Atlantic. Namibia is an exciting and promising petroleum province and Eco Atlantic’s portfolio of offshore acreage spans three distinct environments, each with excellent prospectivity. Our new working interest in Eco Atlantic’s Licenses will complement Azimuth’s existing positions in the Adriatic, Benin and Ghana, and we look forward to working with the Eco Atlantic team to rapidly develop a suite of robust drilling targets underpinned by 3D seismic.”


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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

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