(Alliance News) - Eco Atlantic Oil & Gas Ltd on Thursday announced it acquired an additional 60% interest in the Orinduik block offshore Guyana from a Tullow Oil PLC subsidiary.
Shares in Eco Atlantic were up 12% at 16.00 pence each in London on Thursday midday, while Tullow's were up 1.0% at 36.75 pence each.
The Toronto-based oil and gas exploration company will now hold a 75% interest, while TOQAP Guyana BV, a joint venture between TotalEnergies SA and QatarEnergy will own the remainder.
Eco Atlantic had held a 15% direct working interest in Orinduik since 2018.
Eco Atlantic will pay USD700,000 to Tullow upfront, USD4 million in the event of commercial discovery and USD10 million upon the issue of a production licence from the government of Guyana. In addition, Tullow will have a royalty on future output.
Chief Executive Officer Gil Holzman said: "We are delighted to have reached this agreement with Tullow and to be able to begin to unlock the Orinduik block's full potential.
"We will proactively engage in a farm out process for this highly prospective licence and begin preparations to drill a well testing the cretaceous, where all light oil discoveries have been made in the adjacent Stabroek block."
Tullow Oil, an oil and gas producer in Ghana, Gabon and Ivory Coast, on Thursday noted Eco Atlantic's announcement.
Tullow's director for exploration, non-operated assets and decommissioning, Jean-Medard Madama said: "This transaction is in line with our strategy to optimise our portfolio through opportunities to unlock value from our emerging basin licences, whilst focusing our capital expenditure on our high return producing assets and growth opportunities around existing infrastructure."
By Sabrina Penty, Alliance News reporter
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