Canadian junior snaps up assets in Namibia, South Africa
Toronto-based Eco Atlantic has signed a memorandum of understanding to buy upstream assets in Namibia and South Africa, the company reported on January 10.
The assets represent the entire offshore portfolio of Azinam, an explorer backed by private equity group Seacrest Capital. On the deal's completion, shareholders in Azinam will get a 16.65% equity stake in the enlarged group.
The acquisition will expand Eco's position in Namibia, where it already has four offshore licences, giving it 85% interests in three more licences off the country's coast. In South Africa, Eco will get a 50% operating stake in offshore block 2B, where it will join partners African Energy and Panoro Energy. The company will also receive a 20% interest in the 3B/4B blocks.
Eco hopes to sign a sales and purchase agreement and close it by the end of the month, ahead of drilling an exploration well in the second half of the year.
"Our goal is to build a portfolio that will offer shareholders near-term exposure to high impact drilling catalysts," Eco CEO Gil Holzman said in a statement. "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 will follow up its drilling off South Africa with an exploration well in Guyana, where it has interests in two blocks.
"These activities come at a time when global discovered resource 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 said. "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."