Eco (Atlantic) Oil & Gas has signed a definitive agreement to farm down a 37.5% working interest in Block 1 CBK offshore South Africa to Navitas Petroleum after the company exercised an option under a previously announced strategic framework agreement.
The agreement follows Navitas’ review of geological data and is subject to regulatory approvals from the Petroleum Agency of South Africa and the TSX Venture Exchange, as well as receipt of a $4 million cash payment from Navitas to Eco Atlantic.
Upon completion, Navitas will become operator of Block 1 CBK with a 37.5% working interest, while Eco Atlantic will retain a 37.5% stake. Eco Atlantic said it would be carried by Navitas for the work program, capped at $7.5 million net to Eco, with repayment linked to future production proceeds.
Eco Atlantic also holds an option through subsidiary Azinam South Africa to acquire an additional 20% participating interest in the block from local partner OrangeBasin Energies.
Under the agreement, Navitas has the right to acquire half of that additional interest, representing a further 10% working interest.
Navitas’ offshore portfolio includes assets in the U.S. Gulf and the Falkland Islands, including the Shenandoah deepwater field and the Sea Lion development.
“We are incredibly excited about the successful exercise of the Block 1 CBK Option by Navitas, marking a significant advancement of our strategic relations. This quick exercise of the option not only strengthens the bond between Eco and Navitas but also propels us toward a promising future in South Africa’s offshore oil and gas landscape and puts us in an active and enhanced exploration mode.
“Importantly, this agreement not only adds cash to our strong balance sheet, but more importantly signifies the continued progress Eco has made in advancing its projects. Building on our recent farm down to BP in Namibia, we have now further deepened our strategic partnership with Navitas, working not only in South Africa but also in highly prospective acreage offshore the Falkland Islands in PL001,” said Gil Holzman, President and Chief Executive Officer of Eco Atlantic.