Dominant Eco Atlantic solidifies exploration interests
Canadian exploration outfit, Eco Atlantic seems to be progressing with its solidification of interests in offshore exploration in the country following its announcement earlier last week.
Eco Atlantic Oil & Gas announced that further to its press release, dated January 5th, the Company through its wholly-owned subsidiary, Eco Oil and Gas (Namibia), had received all regulatory approvals from the Ministry of Mines and Energy of Namibia and has completed the transaction pursuant to the Amended and Restated Farmout Agreement with AziNam Limited, amending and restating the terms of the farmout agreement dated April 12, 2012, among the parties.
In their announcement Eco said, they will receive a total of CAD$4.2 million in cash. In addition to the cash, the company will shift upcoming cost obligations to its partner, without reducing exploration activities on its petroleum blocks, in conjunction with the farmout of a portion of each of its Cooper, Sharon and Guy Licenses in the Walvis Basin, offshore Namibia.
The government earlier had wanted companies licensed to conduct oil and gas exploration to start farming out to raise financing for drilling and had warned that they would not renew licenses for companies which have not shown intentions to start drilling.
Gil Holzman, CEO of Eco Atlantic said, “the completion of this farmout transaction with our long term partners, AziNam, is a part of our strategy to actively operate and explore our blocks at a very low to zero cost, and at the same time generate a substantial treasury balance. With the restrained outlook taken by the world markets as a result of the recent fall in oil prices, we have affected a self-strengthening strategy that maintains mid- long term value.”
Meanwhile following the recently completed Pan African Oil merger, and the acquisition of that company’s assets and cash, coupled with the cash from this farmout transaction with AziNam, Eco Atlantic feels they are in a very healthy financial position to further their intentions in the country as they now operate four licenses inclusive of two Pan African’s Namibian oil and gas exploration licenses.
“The combination of these two transactions will contribute an additional US$7.3 million to our treasury (and over US$9 milllion in total), and stabilizes recent market jitters with respect to the company,” he said.
“We have also recently significantly reduced cost overhead without diminishing our core strengths, as well as increased our carry on our licenses. This shift in work obligations puts us in a very low-cost obligation position. I am thankful to our partners at AziNam and together with our valued partners, Tullow Oil, we have an excellent team to execute on our full portfolio of Namibian Licenses,” Holzman added.