Page 10 - LatAmOil Week 11 2022

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Eco Atlantic to expand foothold

in Guyana by acquiring JHI

UK-BASED Eco (Atlantic) Oil & Gas said on Eco Atlantic, expressed enthusiasm for the deal.
March 14 that it had expanded its foothold in “This transaction adds to Eco’s strategic acreage
Guyana’s offshore zone by striking an agreement position in Guyana and ensures that there will
on the acquisition of JHI Associates, a Canadian be a number of drilling catalysts over the next
company that holds a 17.5% working interest in couple of years on Eco’s eight offshore blocks. In
the Canje block. addition, the enlarged Group will benefit from
In a statement, Eco Atlantic said it had signed JHI’s current cash position, adding $15mn to
a commercially binding term sheet to acquire Eco’s balance sheet, further strengthening the
100% of JHI, including its cash and capital bal- company’s liquidity position,” he stated.
ances as well as its equity stake in Canje. It put Holzman also said his company would final-
the value of the transaction at about $52mn at ise its selection of new drilling targets at Orin-
current stock prices and noted that the proposed duik, another block located offshore Guyana,
deal would be cashless. later this year but did not give a specific date.
The acquisition will be accomplished via the Meanwhile, John Cullen, the founder and
issuance of new common shares to JHI stock- CEO of JHI, also spoke positively about the
holders, “based on an exchange ratio of 1.1994 agreement. “JHI’s team has come to work well
new Eco common shares and convertible secu- with Eco’s team since they became shareholders
rities,” the company said. Once the new shares last year, and we know that they will continue to
in Eco Atlantic have been issued, JHI’s investors be good stewards of the Canje block as they add
will hold approximately 34% of the former com- it into their impressive and expanding explora-
pany’s equity, assuming that the current share tion portfolio,” he commented.
count holds, it explained. The Canje block covers an area of around
It also said JHI would have the right to 4,800 square km and is located 180-300 km
appoint two non-executive directors to Eco from the Guyanese coast in waters ranging
Atlantic’s eight-member board of directors fol- from 1,700 to 3,000 metres deep. Equity in the
lowing the completion of the transaction. This licence area is currently split between Exxon-
will “[bring] further exploration expertise” to Mobil (US), the operator, with 35%; TotalEner-
Eco Atlantic, the statement remarked. It will gies (France), with 35%; JHI, with 17.5%, and
also lift JHI’s cash balance up to at least $15mn. Mid-Atlantic Oil & Gas (Canada), with 12.5%.
The parties hope to finalise the deal in the Canje is located immediately down-dip from
second quarter of 2022, provided that Guyanese the prolific Stabroek block, where ExxonMobil
authorities and regulatory agencies issue the has discovered more than 20 oilfields contain-
appropriate approvals and permits, it added. ing at least 10bn barrels of oil equivalent (boe)
Gil Holzman, the CEO and co-founder of in recoverable reserves. ™

Eco Atlantic is now the owner of JHI’s equity stake in the Canje block (Image: Eco Atlantic)

P10 www. NEWSBASE .com Week 11 17•March•2022