Tullow subsidiary acquires 40% working interest in oil block
Eco Atlantic Oil and Gas Limited recently announced that it had executed a farm-out agreement with Tullow Oil. Under the agreement, Tullow Kudu has acquired 40% working interest in Block 2012A in the Walvis Basin, also known as the Cooper Block.
Said Eco Atlantic, “This Farm-In, in conjunction with Eco Atlantic´s prior Farm-Out to Azimuth for 20%, nets the Company a 100% carry of all costs on an expanded 1,000 square kilometre three dimensional seismic survey and interpretation.”
Under the arrangement, Tullow Kudu will bear the full costs of seismic programme, expected to kick-off in the fourth quarter of 2014 in addition to carrying the full costs of drilling an exploration well, dependent on on the establishment of a target from the seismic program.
Outlining the terms of the arrangement, Eco Atlantic will transfer 25% working interest in the Cooper Block to allow Tullow in return for a carry of Eco Atlantic’s share of the costs to execute and process the seismic programme, and the reimbursement of 25% of Eco Atlantic’s past costs of approximately US$1 million.
Following the First Transfer, if Tullow elects to participate in the drilling of an exploration well on the Cooper Block, Tullow will be transferred an additional 15% working interest in the Block, in return for a full carry of Eco Atlantic’s share of costs to drill an exploration well on the Block which is capped at $53 million. The reimbursement of an additional 15% of the past costs, related to the first transfer. Eco Atlantic will remain Operator until the second transfer, at which time, Tullow will be appointed as operator of the Cooper Block.
Eco Atlantic currently holds a 70% working interest in the Cooper Block, AziNam Limited holds a 20% working interest, and NAMCOR, the Namibian national oil company, holds a 10% working interest. Following the first Transfer, Eco Atlantic will hold a 45% working interest in the Cooper Block, Tullow will hold a 25% working interest, and AziNam and NAMCOR will retain their respective working interests.
Gil Holzman, President and Chief Executive Officer of Eco Atlantic said, “We are extremely happy to complete this farm-out deal with one of Africa’s pre-eminent and successful oil and gas explorers, Tullow Oil. This provides the requisite financing to progress activities on the Cooper Block, and further validates our exploration work and findings to date. Our strategy is one of identifying, acquiring and de-risking our prospective acreage while attracting world class partners to progress the exploration process. We are delighted to welcome Tullow to partner with us on this block, and to join our other partners, AziNam and NAMCOR. Now that Cooper´s exploration is funded, we will continue to review further partnerships across our portfolio.
The completion of the transfers hinges on the approval of the Ministry of Mines and Energy. Cooper Block participant AziNam Limited which holds a 20% working interest stake has approved the arrangement.