Eco (Atlantic) Oil & Gas Ltd (AIM:ECO, TSX-V:EOG) shares climbed 7% to 8.18p after the explorer struck what it called a “transformational” strategic partnership with Navitas Petroleum, giving the larger group options to farm into two of Eco’s key offshore blocks and potentially take stakes in the rest of its Atlantic portfolio.
Navitas has paid Eco US$2 million for exclusive options over the Orinduik Block offshore Guyana and Block 1 CBK off South Africa.
If exercised, Navitas would pay a further US$2.5 million for Orinduik and acquire an 80% working interest and operatorship, carrying Eco for up to US$11 million of work.
The option window is 12 months. A similar structure applies in South Africa, where Navitas can pay US$4 million within six months to take up to 47.5% of Block 1 CBK and carry Eco for up to US$7.5 million of exploration.
Navitas will also have the ability, under a separate framework, to review Eco’s wider assets in Namibia and South Africa and potentially take at least 25% stakes on negotiated terms. A future-assets option allows Navitas to partner 50:50 on new ventures identified by Eco.
Eco said the proceeds will support licence work and potential acquisitions. Chief executive Gil Holzman described the partnership as “truly transformational”, saying Navitas’ financial and technical strength would accelerate progress on both the Guyana and South Africa assets.