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Eco Atlantic to acquire Azinam's Offshore Blocks in Namibia, South Africa

January 12, 2022
Eco Atlantic to acquire Azinam's Offshore Blocks in Namibia, South Africa

Oil and gas company Eco Atlantic has signed a Memorandum of Understanding to acquire 100% of Azinam Group including Azinam's entire offshore asset portfolio in Namibia and South Africa, in return for a 16.65% equity stake in the enlarged group on completion of the acquisition.

As at 30 September 2021, Azinam had total assets of approximately N$247 million (US$16 million)

Azinam, a company that owns offshore oil and gas assets, is a subsidiary of Azinam Holdings Limited, which is majority-owned by Seacrest Capital Group.

Subject to the signing of a binding share purchase agreement and completion of the acquisition, Eco Atlantic will issue to Azinam Holdings Limited such number of new common shares in Eco as provides the Azinam Holdings Limited with 16.65% of Eco's share capital as enlarged by such issue, providing for a cashless acquisition to become the sole owner of Azinam's entire African portfolio.

Offshore Namibia, Eco will acquire additional Working Interests in its current oil blocks where Azinam is a partner, being Petroleum Exploration.

Licenses ("PELs") #97, #98 and #99. Eco's resultant net Working Interest in these PELs will be 85% on completion. Working Interest on these Blocks are the same as its existing interest in PEL #100, and Eco is the Operator on all four PELs.

"We are delighted to update the market on this exciting transaction and welcome the stronger alignment with Africa Oil Corp. and the broader Lundin Group through direct partnership in Blocks 3B/4B and 2B.The acquisition strengthens our long-term and strategic position in Namibia, giving us 85% and Operatorship in four highly prospective blocks, and gives us added versatility as we look to partner with a major player to help accelerate further exploration activities in the country's burgeoning energy industry,” Gil Holzman, Co-Founder and CEO of Eco Atlantic said.

"As we have always stated in our corporate strategy, our goal is to build a portfolio that will offer shareholders near-term exposure to high impact drilling catalysts. The Azinam acquisition requires no cash funding to close, and positive discussions have been ongoing with Eco's key existing stakeholders in relation to underwriting the funds required to participate directly in 2022 South Africa drilling activity."

"We anticipate that our drilling in South Africa this year will be closely followed by an exploration well in Guyana. These activities come at a time when global discovered resources volumes and access to energy in southern Africa is at an all-time low and hydrocarbons are desperately required as the world navigates the path of successfully achieving the energy transition.  We firmly believe that companies such as ours that explore for oil in and around emerging economies will play a vital role in reducing energy poverty.

"We are looking forward to commencing with our drilling campaigns planned in the prospective Block 2B in South Africa and in Guyana this year and beyond, and we will continue to further build our corporation to offer additional exploration catalysts as and when we believe these opportunities will be value accretive to our stakeholders."

Colin Kinley, Co-Founder and COO of Eco Atlantic said, "Much of the engineering and geological and geophysical work on the Gazania-1 well has been completed during the past year, so we are stepping into an active plan, which has the potential to offer shareholders additional near-term catalysts. We have an experienced team of exploration specialists who are working to finalize the well planning and we benefit from having excellent support from our JV Partners at Africa Energy from their Cape Town base. We have already held meetings with the engineering contractor, the JV Partners and with the proposed rig contractor who currently is holding a slot for us while we seek to conclude the Acquisition and finalise our plans. Block 2B already has a previous light oil discovery - as there was an offsetting strat well, A-J1, drilled in 1988 that proved the presence of high-quality oil in the area. We are excited to move ahead on planning the targeted well, having done extensive evaluation of this specific region over the past six years and are familiar and confident with its prospectivity."

Apart from the 16.65% issue to Azinam Holdings Limited of Eco's then Enlarged Share Capital, in addition, Azinam Holdings Limited will be issued warrants over new common shares in Eco, exercisable only in case of a producible commercial discovery on Block 2B or Block 3B4B, as follows: 20,000,000 warrants exercisable at a price of CAD$1.00 per share during the twenty-four month period immediately following Completion, and 20,000,000 warrants exercisable at a price of CAD$1.50 per share during the thirty-six month period immediately following the Completion, such exercise dates to be extended in the event a well is not drilled on Block 2B or Block 3B4B, until such time as a well is drilled on either Block and a producible commercial discovery declared.

Also, Azinam Holdings Limited will enter into a lock-in agreement to restrict the sale of the consideration shares until the earlier of: the spudding of a well on Block 2B; or, 6 months following Completion in respect of a third of the consideration shares, with two equal further tranches being released from the lock-in 12 and 18 months following Completion.-oedigital

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Last modified on Friday, 14 January 2022 17:06
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