Africa Oil Corp (AOC) has entered into a strategic partnership with Eco (Atlantic) Oil and Gas Ltd for exploration in West Africa and Guyana
Under the agreement, AOC will acquire a 19.77 per cent shareholding in ECO.
The investment agreement also provides the company with the right to participate in any future ECO equity issuances, on a pro rata basis, and to appoint one nominee to ECO's board of directors. Keith Hill, president and CEO of AOC, will join the ECO board of directors as soon as practicable.
The companies have also entered into a strategic alliance agreement (SAA), whereby they are expected to jointly pursue new exploration projects.
As per the terms of the SAA, AOC will be entitled to bid jointly on any new assets or ventures proposed to be acquired by ECO, on the same terms as ECO and for an interest at least equal to the company's percentage holding of the common shares in ECO from time to time.
Additionally, AOC will have a right of first offer on the farm out of exploration properties currently held by ECO.
ECO has been able to assemble an extensive exploration portfolio in two countries that are at the forefront of exploration, including four blocks in Namibia and one block in Guyana.
The Namibia blocks are located in an area of proven source rocks and large. In Guyana, ECO holds a block directly up dip from the Stabroek block on which Exxon estimates resources of 2.5bn to 2.8bn oil-equivalent barrels, including the supergiant Liza field.
Keith Hill, CEO of Africa Oil, commented, “The pace of exploration is increasing in these regions with large independents and even super-majors taking big acreage positions with aggressive drilling plans over the next few years. This alliance will help us take advantage of this upswing in activity.”
