Canada-headquartered oil and gas company Eco (Atlantic) Oil & Gas has struck a farm-in deal to acquire a stake in Block 1, in the Orange basin offshore South Africa.
The deal sees Eco acquiring a 75% working interest and operatorship of a new Exploration Right to the Block 1 area which spans close to 20,000 square kilometre, adjacent to the Namibia border.
At the same time, Tosaco will transfer its remaining 25% of Block 1 to OrangeBasin Oil and Gas, a newly formed South African with ‘Broad-Based Black Economic Empowerment’ status.
The farm-in deal terms see Eco make an initial US$150,000 payment upon signing and a further US$225,000 when title is transferred – subsequently US$375,000 would be due when the project’s first compliant resource report is filed.
Eco is required to carry the cost of its minority partner over a three-year work programme, up to a total of US$2.3 million.
Initial exploration work will involve the analysis of existing 2D and 3D seismic data, there is no obligation for the capture of additional seismic or drilling.
“The Orange Basin continues to prove to be one of the newest and most prolific plays in the world and is running similar statistics to our Guyana play,” Chief Operating Officer Colin Kinley said.
“Following completion of this farm-in, Eco will have one of the largest blocks in the entire Orange Basin.”
“This is a strategic play for Eco that we have worked on over the past year, focusing on both Oil and Gas potential, and where we believe there are significant near shore prospective gas resources.”
Block 1 spans 19,929 square kilometres and is situated offshore on the Namibian border in the Orange Basin. It extends approximately from the South African shoreline some 263 kilometres west into deep water.
The company also noted today that it is now also relinquishing a 50% working interest in the smaller Block 2B, which was host to the Gazania-1 well which is offsetting the AJ-1 oil discovery, with the asset now deemed to be a non-core given Eco’s interests in Block 3B/4B and Block 1, plus its projects in Namibia.
The Orange Basin has become an exploration hotspot with TotalEnergies’ Venus-1, Shell’s Graff-1, La Rona, and Jonker-1X, along with Galp’s Mopane oil discoveries.
