Eco Atlantic Oil & Gas has signed an agreement to farm out a 60% participating interest across all three of its offshore Namibian exploration licences to BP, handing over operatorship in the process.
The deal covers PEL97 (Cooper), PEL99 (Guy) and PEL100 (Tamar). Eco will retain a 25% interest in each, with NAMCOR holding 10% and local partners 5%.
Under the terms, Eco receives a $2.7m cash payment on completion. Crucially, BP will carry 100% of Eco’s costs, including its share of the NAMCOR and local partner carries, through the current exploration phase. The planned work programme includes seismic reprocessing on PEL97 and a 3D seismic survey of at least 3,000km² across PEL99 and PEL100.
The deal also includes a put option structure tied to drilling. If BP commits to an exploration well in the second renewal period from 2028, Eco can choose to transfer an additional 10% interest to BP in exchange for a full carry on its remaining 15% stake, capped at $21m per well per licence, up to a maximum of $63m across all three blocks.
Gil Holzman, President and Chief Executive Officer of Eco Atlantic, said: “This successful farm down of our Namibian Walvis Basin Licenses marks an incredible moment for Namibia, for Eco Atlantic and its shareholders.
“This transaction is a clear demonstration of our strategy partnering with Supermajors and IOC’s, to derisk our portfolio while retaining material exposure to significant upside potential with very limited financial requirements from Eco. Eco entered Namibia in 2011, with a firm belief of the Walvis basin subsurface potential, and we are proud to attract an IOC of BP’s calibre to further explore this prospective basin. We look forward to continuing our excellent working relationship with BP’s dynamic and experienced team and welcome them to the Land of the Brave.
“I am extremely grateful to our Namibia country manager, Tironenn Kauluma, as well as my dedicated team and our legal advisors at Cliffe Dekker Hofmeyr, for their tireless efforts over the past few months in delivering this monumental transaction for Eco shareholders and our Namibian Stakeholders. We are also deeply appreciative of the ongoing support, guidance and cooperation we always have from the Petroleum Commissioner at the Ministry of Mines and Energy, her team, and the Upstream Petroleum Unit at the state house.”