Unfolding the Big picture Eco Atlantic receives Govt. approval to take charge of Orinduik Block
Nov 16, 2023 ExxonMobil, News, Oil & Gas
Kaieteur News – Canadian exploration company, Eco (Atlantic) Oil & Gas Ltd., has received the government’s approval to assume 60% of the working interest as well as operatorship of the Orinduik Block which measures 1800 km2.
Eco told the market on Wednesday that it had signed a Sale Purchase Agreement on August 10, 2023 for its wholly owned subsidiary, Eco Guyana Oil and Gas (Barbados) Limited (“Eco Guyana”) to acquire the 60% Operated Interest that was initially held by Tullow Guyana B.V. (“TGBV”), a wholly owned subsidiary of Tullow Oil Plc. (“Tullow”).
According to the deal, Eco has agreed to pay Tullow a combination of upfront US$700,000 cash and potential future payment. Kaieteur News understands that if Eco makes a commercial discovery it will pay Tullow US$4 million in addition to a further US$10 million if Guyana issues a production licence and royalty payments on future production.
On completion of the US$700,000 transaction with Tullow, Eco said the 60 percent interest will be added to its previous holding of 15 percent, thereby giving it an aggregate 75% participating interest in the Orinduik Block. Eco was keen to point out that is new subsidiary called Eco Orinduik will hold the 60 percent interest while Eco (Atlantic) Guyana Inc. will hold the 15% stake. Meanwhile, TOQAP Guyana B.V—a company that is owned 60 percent by Total and 40 percent by QatarEnergy—will continue to hold a participating interest of 25% in the Orinduik Block. Completion of the transaction between Eco and Tullow is expected before year-end 2023.
Following the announcement on Wednesday, Colin Kinley, Co-founder and Chief Operating Officer of Eco Atlantic, commented said he is pleased to have the government’s support for the transfer of the interests. He further noted that the partners are finalizing plans to drill their next well. Back in 2019, Tullow had drilled two exploration wells but oil was not found in commercial quantities.
This time, Kinley said the company is targetting the Cretaceous play which is where Exxon has found most of its sweet, light crude in the Stabroek Block. That concession is also in the vicinity of the Stabroek Block.
Kinley said, “After nearly 10 years of exploration and interpretation, and multiple regional discoveries (by Exxon) at the Cretaceous level of close to 11 billion barrels of recoverable oil, our team has a good understanding of the Cretaceous play and we have a great deal of confidence in drilling our first well, targeting a stacked pay target in this well proven horizon.”
Kinley said Eco now seeks qualified partners in this high-value play following which, it would proceed to transfer the majority if its stake to its new deep-pocketed partner. He also noted that recent interest from super majors and other well capitalised energy companies in the latest licencing bid round in Guyana supports Eco’s thesis of the oil migration and the high quality and charged reservoirs it sees on the Orinduik Block.
I would assume this train is already moving and we might hear from it anytime soon...