Eco (Atlantic) Oil & Gas Ltd (AIM:ECO, TSX-V:EOG) said it is to buy Azinam Group Ltd, including Azinam's entire offshore asset portfolio, in return for a 16.65% equity stake in the enlarged group.
The deal gives Eco a material offshore petroleum exploration asset base in Namibia and South Africa.
Under the terms of the agreement with seller Azinam Holdings Ltd, Eco will issue new shares, equating to around 16% of the enlarged company.
It gains access to a 50% interest in Block 2B, in South Africa’s Orange basin, where alongside Africa Energy and Panoro Energy a well is slated for the second half of 2022.
In Namibia, Eco acquires additional working interests in its current blocks (Petroleum Exploration Licenses #97, #98, #99) which will rise to 85%.
"We are delighted to update the market on this exciting transaction and welcome the stronger alignment with Africa Oil Corp (TSX-V:AOI) and the broader Lundin Group,” said Eco chief executive Gil Holzman.
"The acquisition strengthens our long-term and strategic position in Namibia, giving us 85% and operatorship in four highly prospective blocks, and gives us added versatility as we look to partner with a major player to help accelerate further exploration activities in the country's burgeoning energy industry.”
Holzman added: “The Azinam acquisition requires no cash funding to close, and positive discussions have been ongoing with Eco's key existing stakeholders in relation to underwriting the funds required to participate directly in 2022 South Africa drilling activity.”
Eco told investors it expects that South Africa drilling will be closely followed by an exploration well in Guyana.
“These activities come at a time when global discovered resources volumes and access to energy in southern Africa is at an all-time low and hydrocarbons are desperately required as the world navigates the path of successfully achieving the energy transition,” Holzman highlighted.
“We firmly believe that companies such as ours that explore for oil in and around emerging economies will play a vital role in reducing energy poverty.”
Eco chief operating officer Colin Kinley, meanwhile, looked to the programme in South Africa: “These activities come at a time when global discovered resources volumes and access to energy in southern Africa is at an all-time low and hydrocarbons are desperately required as the world navigates the path of successfully achieving the energy transition.
“We firmly believe that companies such as ours that explore for oil in and around emerging economies will play a vital role in reducing energy poverty.”