WTI (July)* $104.15 +$1.93, Brent (July) $111.28, Diff -$7.13 -$3.69.*
USNG (June) $3.11 +9c, UKNG (June) 126.78p +6.62p, TTF (June) €51.3 +€1.075.
*Denotes expiry of June contract.
Oil price
Oil is down a little this morning as it seems that peace talks are ‘ongoing’ and may be influenced by news that President Xi has offered help in the region. The API inventory stats showed a big draw in crude of some 9.1m barrels, the whisper was only -3.4m and gasoline drew by 5.8m, no surprise there and distillates by only 1m. With the SPR drawing 9.9m barrels the tightness gets ever more apparent, margins are good in US refining…
Eco (Atlantic) Oil & Gas
Eco has announced that, further to the Company’s announcement on December 4, 2025, it has signed a definitive agreement to farm down a 37.5% working interest in Block 1 CBK offshore South Africa to Navitas Petroleum LP. The Agreement is a key milestone in Eco’s strategic framework agreement with Navitas which provided Navitas with an option to farm-in to Block 1 CBK.
Navitas has, following a review of geological data, now elected to exercise the Block 1 CBK Option through the execution of a definitive farmout agreement on May 19, 2026. The Agreement is conditional on receipt of customary regulatory approvals, from the Petroleum Agency of South Africa and the TSX Venture Exchange and receipt of US$4.0 million cash payment from Navitas to Eco. Upon completion Navitas will become the Operator of Block 1 CBK with 37.5% WI (and up to 47.5% pending exercise of the Eco-OrangeBasin Energies option) upon completion of the transaction.
Eco will retain a remaining WI of 37.5% (and up to 47.5% assuming the exercise of the option with OrangeBasin Energies referenced below). Eco will be carried by Navitas for the work programme, the value of the carry being capped at US$7.5 million net to Eco. The amounts carried by Navitas will be repaid via Eco’s share of proceeds from future production on the Block.
On December 3 2025, Eco, through its subsidiary Azinam South Africa Limited (“Azinam SA”), signed an exclusive option agreement with its local partner OrangeBasin Energies (Pty) Ltd (“OrangeBasin Energies”), formerly Tosaco Energy (Pty) Ltd, (the “Option Agreement”) to acquire a further 20% participating interest in Block 1 CBK for a cash and shares consideration as detailed in the Company’s announcement on December 4, 2025. Under the Block 1 CBK Option, Navitas has the right to acquire 50% of this option (representing a 10% WI), which is exercisable at Eco’s and Navitas’ mutual consent and discretion at any point throughout the term of the initial exploration period expiring in February 2028.
The resulting ownership structure is therefore expected to be as follows:
|
Scenario |
Eco |
Navitas |
OrangeBasin Energies |
|
Current pre-completion position |
75.0% |
0.0% |
25.0% |
|
Following completion of the Agreement |
37.5% |
37.5% |
25.0% |
|
If the Option Agreement is exercised in full and Navitas acquires 50% of the additional interest |
47.5% |
47.5% |
5.0% |
Navitas, a publicly traded partnership, is actively engaged in offshore oil and gas exploration and production, with a portfolio of established oil and gas assets primarily in North America (U.S. Gulf of America) and the South Atlantic (Falkland Islands). The partnership’s flagship production asset is the Shenandoah deepwater field in the U.S. Gulf, where Navitas holds a 49% WI and which reached first production in July 2025. Navitas has also demonstrated its ability to advance complex offshore developments efficiently toward first oil, achieving FID on the Sea Lion development in the Falkland Islands in December 2025. In January 2026, Navitas further expanded its South Atlantic footprint through the execution of an agreement to acquire 65% WI in the PL001 North Falkland Basin Licence, alongside Eco Atlantic’s planned acquisition of JHI Associates to secure the remaining 35% interest. The strategic framework between Eco Atlantic and Navitas is intended to create a highly complementary partnership, combining Navitas’ proven offshore exploration, development and production capabilities with Eco Atlantic’s diversified portfolio of high-impact exploration acreage, providing a strong platform to organically expand and grow a long-term exploration and production portfolio.
Gil Holzman, President and Chief Executive Officer of Eco Atlantic, commented:
“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. Eco and Navitas’ technical and operational teams have been working closely to analyse this block and the wider region along with other assets and areas of interest. Together, we are primed to leverage our combined expertise and resources to maximise our potential in the region and beyond.
“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, which Eco will gain further exposure to upon the upcoming completion of our acquisition of JHI Associates Inc. Additionally, Navitas also holds options to acquire 80% of Eco’s interests in the Guyana Orinduik Block where we are progressing advanced discussions with the Government over the terms of the next exploration and appraisal stages, offering scope for our partnership to extend further. Overall, these milestones highlight how Eco has successfully executed its strategy of de-risking its portfolio of world-class assets through partnering with carrying, tier-one operators across the Atlantic Margins”.
Overall the news here is better than expected, this is no formality but an educated decision based on subsurface work already done and as Gil Holzman says, it marks a significant advancement of the strategic relations with Navitas.
Navitas has moved swiftly into South Africa with big plans to explore, develop and produce and puts Eco into ‘an active and enhanced exploration mode’. Work on the block has already started and will continue as well as analysing data from the wider region where there are a number of other assets and areas of interest.
This relationship goes from strength to strength, Eco gains cash, a strong and powerful operator and of course a highly valuable carry, exceptionally good news all round. The company’s strategy of a material infrastructure developing across all its portfolio is happening in front of our very eyes. The partnership means that ‘we are primed to leverage our combined expertise and resources to maximise our potential in the region and beyond’.
It will come as no surprise that I am happy with this news and that ongoing flow of information to the market can only reinforce my target price of 150p and that despite impresive recent performance that there is much more to come.
Rockhopper Exploration
Rockhopper notes the recent update published by Navitas Petroleum LP on Sea Lion development progress.
As previously disclosed the first two phases of the Sea Lion development is set to use an FPSO, being the Aoka Mizu, which shall have production capacity of 55k bopd (19.25k bopd net to Rockhopper). Navitas has today provided an update that it is investigating accelerating the development of subsequent phases of the Sea Lion development and has accordingly signed a Memorandum of Understanding (“MOU”) for an additional FPSO which could increase the Sea Lion production capacity by a further 125,000 bopd (43.75k bopd net to Rockhopper). There is no guarantee that this MOU will convert to legally binding agreements.
Navitas has also updated that due to the conflict in Iran, it has decided to change the location for the upgrades of the Aoka Mizu FPSO from the Middle East to Asia. This change will add an approximate US$45 million to the current development budget. Rockhopper benefits from a loan from Navitas covering 2/3 of its 35% equity requirement for Phase 1 of the Sea Lion development. Accordingly, the net increase in Rockhopper’s equity costs is US$5.25 million and Rockhopper remains funded for Phase 1 of the project.
Navitas reports other progress on the Sea Lion development as follows:
· The development works on the Falkland Islands have commenced and at this stage are focused on preparing the dock and shore base. Later this year, works will also commence for the construction of worker accommodation as well as additional infrastructure works in preparation for the commencement of drilling activity.
· The manufacturing of long lead items for the Phase 1 is ongoing.
· In early May 2026, the owner of the Aoka Mizu FPSO provided an update that production by the current operator had concluded and, by the end of May, disconnection works will be completed and the Aoka Mizu FPSO will sail to the shipyard for upgrade work to adapt it to Sea Lion’s requirements.
· Drilling and completion works are scheduled to commence at the beginning of 2027. First oil from the Phase 1 is still currently expected in H1 2028.
Samuel Moody, Chief Executive Officer of Rockhopper, commented:
“We are delighted that the project is on track having taken the prudent decision in the light of the security situation arising from the Iran conflict to move the FPSO work from the Middle East to Asia. We are equally excited at the prospect that the development of additional barrels might be accelerated with the signing of the MOU for a second FPSO giving the opportunity to add a further 125,000 barrels per day of production to the 55,000 barrels per day from the first two phases.”
Further good news from Rockhopper as the Sea Lion development remains on track despite the Gulf situation necessitating moving the FPSO work from the Middle East to Asia. The news about the second FPSO is even better, as CEO Sam Moody states, ‘We are equally excited at the prospect that the development of additional barrels might be accelerated with the signing of the MOU for a second FPSO giving the opportunity to add a further 125,000 barrels per day of production to the 55,000 barrels per day from the first two phases’.
And finally…
The Gooners did indeed win the Prem, without playing as the Noisy Neighbours drew at the Cherries…Many congratulations.
And the Saints have indeed been banned from the big money game against Hull on Saturday, but they are appealing today, what news by tomorrow I wonder….?
Disclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. The writer may or may not hold investments in the companies under discussion.
