LONDON, UK: Eco (Atlantic) Oil & Gas Ltd. (AIM: ECO) has signed a Commercially Binding Term Sheet to purchase 100% of JHI Associates Inc. (JHI), together with JHI’s 17.5% Working Interest within the Canje Block offshore Guyana.
JHI is a private firm incorporated in Ontario and headquartered in Toronto, Canada. If and as soon as accomplished the Acquisition provides the enlarged Eco Group with possession of 17.5% PI within the Canje Block offshore Guyana.
The Canje Block is operated by Esso Exploration & Production Guyana Limited (35%), a subsidiary of ExxonMobil Corporation, with the remaining companions together with TotalEnergies E&P Guyana B.V. (35%), JHI Associates (BVI) Inc. (17.5%) and Mid-Atlantic Oil & Gas Inc. (12.5%).
On closing of the acquisition, JHI is to have a minimal money balance of $USD 15 million, acquired as a half of the transaction with Eco. The Canje Block is roughly 4,800km2, located roughly 180 to 300 kilometers offshore Guyana in water depths ranging between 1700 and 3000 meters.
The Canje Block is a big and significant license which captures the decrease slope and base of slope play fairways, channels and followers outboard of a quantity of ExxonMobil discoveries within the adjoining Stabroek Block which is instantly up-dip of Canje.
Canje is roofed with 6,100km2 of 3D seismic and holds over three dozen prospects in 4 confirmed performs within the Lower Tertiary and Upper Cretaceous confined channels, Lower Cretaceous Carbonate structures and, with recent drilling of Sapote-1 well and Stabroek discoveries, now offers the chance of but deeper horizons.
Pursuant to the Term Sheet and subject, inter alia, to the signing of a binding Arrangement Agreement and completion of the Acquisition, Eco Atlantic will issue to JHI’s shareholders, together with the holders of any JHI choices and warrants, such variety of new common shares in Eco that on the above-stated exchange ratio and present share count (post the issue of the Azinam Group Limited acquisition consideration shares) will present JHI’s shareholders with 34.1% of Eco’s issued share capital as enlarged by such issue, or roughly 127 million new common shares of Eco, offering for a cashless acquisition, with a worth of roughly US$52 million on the Company’s present share price, to become the sole proprietor of JHI’s money balance and its 17.5% PI within the Canje Block. The Term Sheet provides Eco with a 90-day exclusivity interval and terminates, or could additionally be terminated, upon the occurrence of sure events.
Completion of the acquisition is subject, inter alia, to the signing of an Arrangement Agreement and passable completion of due diligence by Eco and any requisite approvals from the Government of Guyana, the Canje Block partners, and the TSX Venture and AIM exchanges. In addition, sure shareholders of JHI will enter right into a lock-up agreements to limit the sale of the consideration shares.
As of 31 December 2021, JHI’s audited monetary statements provides that it had total gross assets of roughly US$30.7 million, of which roughly US$19.7 million is money and money equivalents and US$3.5 million is the book worth of its curiosity within the Canje Block. These monetary statements additionally present that JHI had total liabilities to 3rd events of roughly US$500,000.
John Cullen, Founder and CEO of JHI commented: “This transaction provides JHI’s shareholders entry to Eco’s thrilling portfolio of exploration alternatives within the rising oil basins of Namibia and South Africa, and in Guyana with their Orinduik block, whereas sustaining their publicity to the Canje Block, the place we have been working steadily with our companions to identify the subsequent prospect to drill. It additionally represents the culmination of a tremendous quantity of labor from JHI’s technical team which, over the final six years, noticed two supermajors join the Canje Block, and three wells drilled offering valuable information towards unlocking the potential of the deeper water parts of the Guyana-Suriname Basin.
“JHI’s team has come to work well with Eco’s team since they became shareholders final year, and we all know that they will proceed to be good stewards of the Canje Block as they add it into their spectacular and increasing exploration portfolio.”
Gil Holzman, Co-Founder and CEO of Eco Atlantic commented: “Being a shareholder of JHI since final year has given us a deep understanding of the Canje Block and its prospectivity. It has additionally given us the chance to get to know the nice administration team at JHI and their technical and enterprise achievements to date. Because of those facts, we believe that there’s appreciable strategic rationale in buying JHI. Eco’s ambition is to become the “go-to” small-cap exploration vehicle for investors seeking publicity to high-impact drilling programs in three of the world’s most thrilling hydrocarbon provinces in Guyana, Namibia and South Africa. This acquisition will get us one other step nearer to that goal and builds on the Azinam acquisition we introduced earlier this year.
“This transaction provides to Eco’s strategic acreage place in Guyana and ensures that there’ll be a variety of drilling catalysts over the subsequent couple of years on Eco’s eight offshore blocks. In addition, the enlarged Group will profit from JHI’s present money position, including US$15million to Eco’s balance sheet, additional strengthening the Company’s liquidity position.
Given Eco’s strategic investor base and confirmed entry to the general public capital markets, the anticipated addition of JHI’s curiosity within the Canje Block and its working capital, will additional increase the enlarged Group money place for its share of all close to time period exploration programs on its present blocks including: 2B in South Africa the place drilling preparations for a late Q3 spud are underway and the Eco Orinduik Block offshore Guyana to follow, Block 3B/4B in Orange basin South Africa and elsewhere within the present and future portfolio of the enlarged entity.
“Ahead of our deliberate drilling marketing campaign on Block 2B offshore South Africa in late Q3 2022, we’re additionally looking to finalise drilling targets in Eco’s Orinduik Block, offshore Guyana. Demonstrating that, as ever, the Eco team are head down and focused on delivering worth for shareholders. We look ahead to offering additional firm updates as appropriate.”
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