Eco (Atlantic) Oil & Gas Ltd (AIM:ECO, TSX-V:EOG)'s hand in its farm-out process offshore South Africa has strengthened significantly as a new independent review of Block 3B/4B has confirmed an exploration hotspot and potential for dramatic discoveries.
The new competent person's report (CPR) authored by consultant RISC Advisory, commissioned by project operator Africa Oil, estimated prospective resources in the order of some 4bn barrels of oil equivalent (boe).
It sees Eco’s net share of prospective resources exceed 1bn boe, the company highlighted in a statement.
Moreover, RISC estimates the probability of success between 11% and 39% across 24 prospects identified to date in the exploration block.
The CPR is based on some 2,200 square kilometres of 3D seismic data and insights from the recent discoveries made in the region by TotalEnergies (the Venus discovery) and Shell (Graff, La Rona, and Jonker).
Africa Oil is planning a two-well drill campaign which is expected to follow a joint farm-out, with a new partner slated to take up to 55% gross interest in the project.
Active talks are taking place with various potential partners, Africa Oil and Eco each noted in their respective statements.
“The region offshore Namibia and South Africa continues to be an exploration hotspot and yielding dramatic discoveries,” Eco chief operating officer Colin Kinley said.
“The estimated one billion BOE of P50 prospective resources net to Eco are all in prospects of similar geologic age and structure to that of the recent discoveries announced by TotalEnergies and Shell in the same horizons of the Orange Basin.”
Kinley added: "We are working closely with our JV partners on a potential farm-out of up to a 55% gross working interest in the block, which will help accelerate the commencement of a two-well drilling program on the licence.
“We believe that this is a highly prospective block with multiple exciting exploration prospects.
“We look forward to updating the market on further developments of Block 3B/4B as exploration activity continues to accelerate in this basin."
Africa Oil chief executive Keith Hill separately said: “We are keen to begin drilling our first prospect, possibly as soon as 2024, and we will start the environmental impact surveys this month."
He added: "Africa Oil is at the forefront of the exciting appraisal and exploration activities in the Orange Basin, probably the most sought-after new petroleum region globally.”