![]() ![]() ![]() “As such, the next catalyst is likely to come from the collaborative farm-out process by Eco and its partners on Block 3B/4B that is now in the farm-out agreement negotiation stage, which would likely provide additional funding for future drilling activity.” What’s nextĪgreeing a farm-out transactions is now the top priority and likely the next significant catalyst for both Africa Oil and Eco Atlantic. “One of the common themes of the last 6M is the renewed gusto in a sector awash with cash and looking for new opportunities to deploy its cash flow to strengthen and expand current shareholder returns into the medium term,” SP Angel analyst David Mirzai said in a note. UK stockbroker SP Angel, in a note, highlighted that Eco has previously reassured investors that the small-cap explorer does not anticipate a need to raise money for its current portfolio and work programme, and, that industry appetite remains for compelling opportunities. ![]() In London, meanwhile, Eco shares moved lower – losing 5.6% to trade at 22.18p each. “We look forward to updating the market on further developments of Block 3B/4B as exploration activity continues to accelerate in this basin." What the market saysĪfrica Oil shares rose inn Thursday’s early deals, suggesting positivity among the investor base for today’s notable forward step. “We believe that this is a highly prospective block with multiple exciting exploration prospects. ![]() "We are working closely with our JV partners on a potential farm-out of up to a 55% gross working interest in the block, which will help accelerate the commencement of a two-well drilling program on the licence. "Africa Oil is at the forefront of the exciting appraisal and exploration activities in the Orange Basin, probably the most sought-after new petroleum region globally,” Africa Oil chief executive Keith Hill said in a statement.Ĭolin Kinley, chief operating officer of Eco which presently owns a 25% interest in the project, meanwhile, commented separately: “The region offshore Namibia and South Africa continues to be an exploration hotspot and yielding dramatic discoveries. Third-party validation of the exploration concept and confirmation of a large potential prize significantly strengthens the explorers’ hands in upcoming negotiations with interested parties.Īfrica Oil wants to drill two exploration wells, it says as soon as in 2024, and it is likely to selected its preferred targets detailed in the CPR. Such a programme would provide a test of the current ‘blue sky’ view of the exploration potential. Significantly, this new partner is expected to at least partially (and perhaps disproportionately) provide funds to support the next phase of exploration in the field. It matters because Africa Oil and Eco Atlantic are jointly seeking another partner in the project. Perhaps most important, whilst inherently technical, the report has confirmed that the exploration prospects envisaged in this block as of a similar geologic age and structure to the nearby discoveries – potentially added some degree of derisking to what remains a greenfield exploration play. The prospective resources estimated by the consultant remain theoretical and are essentially desktop insights, nonetheless, an industry standard report such as this gives the company, investors, and potential partners a somewhat validated view of what the project could be. Whilst commissioned and paid for by Africa Oil, the report is expert and independent. Recent times have seen new discoveries by the likes of TotalEnergies (the Venus discovery) and Shell (Graff, La Rona, and Jonker). The report underlines the possibilities for the exploration venture in South Africa, which is quickly becoming one of few remaining offshore exploration hotspots left in the world. Moreover, RISC estimated the probability of success between 11% and 39% across the 24 prospects identified to date. That’s 4bn barrel oil equivalent estimated across an inventory of some 24 exploration prospects, spanning both potential oil and potential gas targets. The consultant, RISC Advisory, was commissioned by project operator Africa Oil and has estimated prospective resources in the order of some 4bn barrels of oil equivalent (boe). What’s happenedĪn independent analysis (referred to as a ‘competent persons report’) has validated the explorers’ prospective view of Block 3B/4B offshore South Africa. A pair of exploration stocks were in focus on Thursday as an independent report bolstered the prospectivity for project in the waters off South Africa, in the neighbourhood of major new hydrocarbon discoveries.Īfrica Oil Corp (TSX:AOI) leads the project and is operator, whilst London AIM-quoted Eco (Atlantic) Oil & Gas Ltd (AIM:ECO, TSX-V:EOG) retains 25% of the venture. ![]()
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