The keys to the Walvis Basin are officially changing hands, as Eco Atlantic Oil & Gas, which is considered to be the biggest owner and operator in this basin, has secured the final blessing from Namibia’s Ministry of Industries, Mines and Energy for its farm-down to BP, setting the stage for a heavily backed exploration operations off the coast of Namibia, while Eco shifts its focus to growing its footprint in Guyana and South Africa.
The company, through its wholly owned subsidiaries, Azinam Group, Eco Oil & Gas Namibia, and Eco Oil & Gas Services, will transfer an aggregate of 60% of its participating interest, transferring operatorship to BP in respect of Block 2012A in PEL97, known as the Cooper license; blocks 2111B and 2211A in PEL99, named the Guy license; and blocks 2211B and 2311A in PEL100, called the Tamar license. The approval represents the final governmental consent required under Namibia’s law for the transaction.
Following receipt of this final ministerial go-ahead, the parties are now finishing the remaining closing deliverables, and completion is expected shortly. As a result of this farm-down, the joint venture (JV) will embark on a comprehensive exploration work program, and Eco will substantially reduce its funding while retaining material upside exposure to the licenses as a new international operator takes over to progress the blocks’ exploration activities.
The firm intends to use the cash proceeds of the transaction to support its ongoing growth through exploration and appraisal activities across its Atlantic Margin portfolio and for general working capital purposes. Eco will get a one-time cash consideration of $2.7 million on completion and retain a 25% participating interest in PEL97, PEL99, and PEL100.
