Eco (Atlantic) Oil & Gas Ltd (AIM: ECO, TSX-V: EOG) has entered an agreement to secure a larger stake in the Orinduik Block, offshore Guyana, by purchasing the stake held by its exploration collaborator, Tullow Oil PLC (LSE: TLW).
The company listed on AIM is securing the Tullow Guyana branch that possesses a 60% operational interest in the high-potential exploration zone for an initial US$700,000, with subsequent payments dependent on future results.
This acquisition boosts Eco’s share in the project to 75%, with Total still holding 25%.
Should a commercial find arise from Orinduik, Tullow is set to receive an added US$4 million, and an extra US$10 million if this find transitions to production (upon issuance of a production license). Additionally, Tullow will maintain a 1.75% royalty on production from 60% of the block.
This follows past unsuccessful drilling attempts in the block. Notably, much of the block’s potential is yet to be explored.
Specifically, the exploration method that led to Exxon’s significant neighbouring finds hasn’t been executed in this adjacent block. Under Tullow’s guidance, other exploration objectives were prioritized.
Eco’s plan is to collaborate with new partners to explore these previously assessed prospects.
Gil Holzman, CEO, remarked, “Our goal is to actively partake in a farm-out scheme for this promising license and kick-start preparations for drilling in the cretaceous, the region of all light oil discoveries in the adjoining Stabroek Block.”
Colin Kinley, Eco’s COO, stated, “With a decade of evaluating the basin and research, we possess a competent and seasoned team to assume the lead role. Our aim is to initially explore the layered pay opportunities in the cretaceous and uphold our proactive approach to uncovering potential. We identify an opportunity that spans hundreds of millions in recoverable assets, and it’s time to drill our objectives.”
