Eco-Atlantic Oil & Gas Ltd., a prominent oil and gas exploration firm focused on offshore Atlantic Margins, has successfully completed the acquisition of a 60% operated interest in the Orinduik Block, offshore Guyana. The acquisition was made from Tullow Guyana B.V., a subsidiary of Tullow Oil Plc.
The sales purchasing agreement signed by Eco included a combination of upfront cash and contingent consideration. The company noted that the strategy behind this transaction aligns with its commitment to create substantial value for its stakeholders by actively exploring for hydrocarbons in some of the world’s most prolific petroleum basins.
Previously holding a 15% working interest in the Orinduik Block, Eco-Atlantic now assumes the role of operator and majority interest holder, boasting a 75% aggregate participating interest through its subsidiaries, Eco Guyana and Eco (Atlantic) Guyana Inc. The company also noted that the change in position enables it to play a pivotal role in driving the exploration process and implementing its strategy to attract new partners for collaboration.
The company was subjected to a US$700,000 cash payment upon the transfer of Tullow’s 60 percent stake interest and operatorship of the Orinduik license to Eco Guyana. Additionally, with the agreement, contingent considerations are linked to specific milestones, including a US$4 million payment in the event of a commercial discovery, a US$10 million payment upon the issuance of a production license from the Government of Guyana, and royalty payments on future production amounting to 1.75% of the 60% participating interest entitlement revenue net of capital expenditure and lifting costs.
In expressing his enthusiasm, Gil Holzman, the President and Chief Executive Officer of Eco Atlantic, commented, “We are delighted to have reached this agreement with Tullow and to be able to begin to unlock the Orinduik Block’s full potential.” He further emphasized the company’s strategic approach to exploration and partnership expansion.
Eco-Atlantic’s co-founder and Chief Operating Officer, Colin Kinley, echoed this sentiment, noting, “We see an opportunity in the multi-hundred millions of recoverable range and now is the time to drill our targets.” He highlighted the favorable geological characteristics of the Orinduik Block, indicating its potential for substantial oil discoveries.
The Guyana Standard understands that Tullow Oil will retain its interest in the Kanuku Block.
