Eco Oil & Gas shares up as strikes Guyana deal with Tullow

Shares in Eco (Atlantic) Oil & Gas (CVE:EOG) advanced after the Canadian oil and gas explorer was granted an exploration licence offshore Guyana in partnership with oil major Tullow (LON:TLW). Eco has been granted a 40% interest in the new Orinduik block. Shares rose 9.7% to C$0.17 in Toronto, stretching gains over the past 12 months to 13.3%. Eco entered into a petroleum agreement with the government of Guyana and Tullow Guyana BV, a unit of Tullow Oil through which Eco Atlantic will hold a 40% working interest in the block and Tullow, as operator, will hold the remaining 60% working interest. Tullow will reimburse Eco Atlantic for part of its costs in relation to the application of the block license and will partially carry Eco Guyana for the future 3D program. In total, the license term of the exploration period is for 10 years. The decision to drill and to complete the first exploration well must occur within the first renewal period in years five and six. The block is located in the Suriname Guyana basin in shallow waters and is located close to Exxon Mobil's recently announced "Liza" discovery. Exxon Mobil announced in May 2015 that the Exxon Discovery well encountered more than 90 meters of high-quality oil-bearing sandstone reservoirs. The well was safely drilled to 5,433 meters in 1,743 meters of water. In July 2015, Bloomberg published an article quoting a Guyana minister as saying the discovery probably holds the equivalent of more than 700 million barrels of oil. Wood MacKenzie has called this discovery one of Latin America's most exciting exploration developments. “This block and JV with Tullow is consistent with our strategy of accessing high potential petroleum systems in politically stable jurisdictions on cost effective terms,” Gil Holzman, CEO of Eco Atlantic, said in the statement. “The Orinduik Block in Guyana has a long license life and we are in partnership with a technically and financially robust partner - well experienced alongside Eco Atlantic, in the international exploration and production space. “With our recent acquisition in Ghana, our advanced work in Namibia and now this new block in Guyana awarded for 10 years, we are well positioned as an international explorer with a particular focus offshore the Atlantic margin."