Canada and UK-listed junior Eco Atlantic has wrapped up a deal to boost its stake in a highly prospective block in South Africa's Orange basin that is also attracting the interest of supermajors.
Block 3B/4B is believed by many explorers — despite the scale of the Venus and Graff discoveries across the border in Namibia — to be the potential sweet spot of the Orange basin.
As a result, operator Africa Oil and its partners are understood to be close to agreeing a farm-out deal covering a possible 55% stake in the acreage that could see exploration drilling start in 2023 or 2024.
One market source familiar with talks suggested that a farm-out agreement could be struck in the first quarter of 2023.
Eco Atlantic now holds a 26.25% stake in the block after its purchase of a 6.25% interest from the Lunn Family Trust (LFT) — for cash and shares — was approved by the Department of Mineral Resources & Energy and the Petroleum Agency of South Africa.
LFT is a shareholder in indigenous player Ricocure which has a 53.75% stake in 3B/4B, with Africa Oil holding 20%.
South Africa: Eco Atlantic boosts stake in ‘exciting’ Orange basin block where two probes could be drilled in 2023
Eco chief executive Gil Holzman said block 3B/4B “looks to be a very exciting licence for all the partners involved” following the recently completed reprocessing of 3D seismic data over the tract.
“We are upbeat about the prospectivity of the licence and following the significant oil discoveries, Venus & Graff, made earlier in the year offshore Namibia, we are pleased to be strengthening our working relationship with Ricocure and Africa Oil.”
Holzman noted that “we are seeing growing industry interest in the entire Orange basin, and in particular in Block 3B/4B,” highlighting how Africa Oil, Ricocure and Eco have agreed to a collaborate on a farm out process that could see a 55% working interest offloaded to a supermajor.
“In the past six months, we have worked very closely with our partners to identify and determine the prospects for a drilling campaign we are contemplating for next year,” added Holzman.
My comments: if they farm out 55% prorated by current % ownership, Africa Oil would end up with 9%, Eco a little under 12% and Ricocure a little over 24%.
