Eco Atlantic agrees to buy JHI to expand Falklands and Guyana exposure

(Alliance News) - Eco Atlantic Oil & Gas Ltd on Wednesday said it has agreed to buy all outstanding shares in oil and gas exploration firm JHI Associates Inc in an all-share deal worth around USD52.3 million.

Under the agreement, Eco Atlantic will acquire all remaining JHI shares in an all-shares deal at a ratio of 0.71 Eco shares for each JHI share.

Eco Atlantic will issue 96.3 million shares so that up to around 22% of its enlarged share capital will be held by JHI shareholders.

Around 45% of the shares issued to JHI shareholders will be subject to 18 month lock-up agreements.

The acquisition is valued at around USD52.3 million based on Eco Atlantic's 30-day average price on the TSX Venture Exchange.

Eco Atlantic said the deal complements its existing Atlantic Margin portfolio in Namibia and South Africa while adding exposure offshore Guyana.

JHI's principal assets are a 35% working interest in the PL001 licence area in the Falkland Islands, a block directly adjacent to the Sea Lion field under development, and a 18% working interest in the Canje Block off the coast of Guyana.

Eco Atlantic also expects the PL001 licence to be extended by five years, "providing significant runway for exploration and development".

The firm said the first oil is expected from the Sea Lion field in 2028.

Eco Atlantic Chief Executive Officer Gil Holzman said: "This transaction represents a further transformational milestone in Eco's strategic evolution...By securing a significant working interest adjacent to the Sea Lion Field...Eco is advancing beyond pure exploration exposure and positioning itself within a basin entering a new phase of development-led growth."

Eco Atlantic Oil & Gas shares were up 12% at 54.19 pence on Wednesday afternoon in London.

By Martin Miraglia, Alliance News reporter

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