Echo Energy Plc (LON:ECHO), the reboot of Independent Resources (IRG), is selling out of its Egyptian project with Nostra Terra Oil & Gas (LON:NTOG).
In a stock market statement, Echo revealed it had signed an agreement to sell its 25% stake in the East Ghazalat licence to its partner.
Nostra in return will pay a total of US$500,000, with an initial US$100,000 paid once a regulatory approval comes from the Egyptian General Petroleum Corporation.
The other US$400,000 is to be paid in two tranches – one triggered when the concession yields production of 800 barrels of oil per day for 30 consecutive days, and the other when output reaches 1,000 bopd for 30 straight days.
It comes after the recent corporate changes at Echo, which first brought on-board Sound Energy boss James Parsons as its new chairman and this week appointed Fiona MacAulay, Rockhopper Exploration chief operating officer, as its new chief executive (she is now due to leave RKH in July).
The company’s relaunch as Echo Energy is supported by injections of new capital, and a new growth strategy focussing on South America.
Nostra Terra, meanwhile, highlighted the deal with Echo as a “significant milestone”. Chief executive Matt Lofgran said: "We're pleased to have reached an agreement with Echo allowing us to increase our interest in the East Ghazalat concession to 50%.
“This acquisition represents a significant milestone for Nostra Terra, as we have added just over 1mln barrels of 2p reserves to our asset portfolio for a total cost of US$1.09 per barrel of oil.
“This positions Nostra Terra extremely well to deliver substantial shareholder value, even in the current oil market.”