Eco (Atlantic) Oil and Gas Ltd is pleased to announce that its wholly-owned subsidiary, Eco Oil and Gas (Namibia) (Pty) Limited (“Eco Namibia”), has entered into a Farm-out Agreement with West Bay Investments, Ltd. (“West Bay”), a Belize corporation focused on the exploration and development of unconventional onshore hydrocarbon projects in sub Saharan Africa. West Bay will farm into both of Eco Namibia’s onshore license blocks.
Eco Namibia is a party to two separate Coal Bed Methane (“CBM”) Agreements: one CBM Agreement covers Blocks 2013B, 2014B and 2114 and the other covers Block 2418. Pursuant to the Agreement, West Bay, or a subsidiary of West Bay, will acquire a 50% working interest in the onshore portion of each of the following Blocks in Namibia: CBM Blocks 2013B (excluding the Western section which extends offshore), 2014B, 2114 and 2418 (the “Licenses”). The assignment of a 50% working interest in the Licenses to West Bay is subject to the approval of the Namibia Ministry of Mines and Energy.
Before taking into account the recent transaction with West Bay, Eco Namibia held 90% working interest in the Licenses and NAMCOR, the Namibian state controlled oil and gas company, held 10% working interest. As a result of the transaction, Eco Namibia’s interest will be reduced from 90% to 40%, West Bay will have 50%, and NAMCOR retains 10%. West Bay will assume Eco’s obligation to carry the NAMCOR 10% working interest, and will pay Eco $400,000 for past expenses. Of Eco Namibia’s 40% interest, one-half will be on a free carry basis at the sole cost and expense of West Bay through all phases of exploration, production and development under each CBM Agreement and the other half will be full working interest. Eco Atlantic and Kinley Exploration will be joint operators.
Gil Holzman, President and Chief Executive Officer of Eco Atlantic commented, “Eco Atlantic conducted a very discerning license application process in selecting its onshore blocks, which has been validated now through the farm-in of West Bay, a group who has many years of unconventional gas exploration experience in Sub Sahara Africa and elsewhere, and a significant track record of success in the industry. By bringing in a partner with the technical and financial capability the likes of West Bay, Eco Atlantic displays its long standing commitment to Namibia, and its ability to identify and attract professional, global industry participants. Farming out part of our onshore licenses will enable Eco to focus and enhance the exploration program of our highly prospective off shore oil licenses in Walvis Basin, Namibia.”
Steve Looper, Chief Executive Officer of West Bay, commented, “We are very happy to have signed this Farm-in Agreement with Eco Atlantic. Our technical team has an excellent understanding of unlocking the potential of unconventional gas in the Sub-Sahara. Namibia in particular is an open frontier of opportunity to develop unconventional gas resources. We appreciate the opportunity to work with the Namibian Government and to use our expertise to unlock this new and important resource for them.”