Eco Atlantic Oil and Gas Ltd (LON:ECO) said it has launched plans that will see it become a “diversified, growth-oriented energy company”.
The firm has set up a new company, Eco Atlantic Renewables, which will seek to source, acquire, and develop exclusive renewable solar energy projects.
"We are not a management team that likes to sit and wait for outcomes,” said Gil Holzman, Eco chief executive in a statement. “Following several months of extensive strategic work and identification of multiple projects by the management team and Board of Directors, this exciting opportunity has crystalised.
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“Our decision to form this new majority held renewable energy company was partly driven by a lack of oil and gas acquisition opportunities that are as good and as prospective as the ones we already hold,” Holzman added.
The new company is a joint venture with Nepcoe Capital Partners, a UK based renewables investment firm, which is providing exclusive access to a pipeline of opportunities with potential for up to 2 gigawatts of solar generation capacity.
Most of the projects are located in Southern Europe's ‘high solar hours' sunbelt.
The venture’s first acquisition is the Kozani project in Greece which is fully licensed, permitted and ready-to-build. The 10.57 megawatt project was acquired on Monday, with €1.1mln paid by Eco Atlantic Renewables.
Eco Atlantic Renewables is initially funded by a US$6mln loan from Eco Atlantic Oil and Gas Ltd, which will retain 70% ownership of the new company from launch and following repayment of the loan.
It is anticipated that the loan will be repaid full upon monetisation of solar assets, future third-party investment into the renewables company, or via future project cash flows.
Eco Atlantic Renewables envisages further deals – with the company targeting 100 MW worth of operating and grid-connected projects in its first year of operation, plus up to 800 MW of in-development assets.
At the same time, Eco Atlantic Oil and Gas Ltd is expected to maintain its focus on oil and gas exploration, as it continues to see considerable upside in its prospective hydrocarbon assets offshore Guyana and Namibia.
Eco Atlantic said it remains committed to explore and deliver value from these exploration assets as soon as possible.
To that end, it is expected that alongside joint venture partners, Tullow Oil and Total, the future exploration drilling plans for the Orinduik project will be decided and announced in the latter part of the second quarter.