Oil and gas business Eco Atlantic Oil & Gas (LSE:ECO) sat at 49.5p today after revealing that it has received final clearance to drill an offshore exploration well in Namibia, where it is targeting up to 882MMboe.
The firm, which now has a £76.7m valuation after rising 2.7pc, has received a final environmental clearance certificate from Namibia’s government to drill the well on its 32.5pc-owned and operated Cooper Block. The well will target a prospect on Cooper called Osprey that is estimated to contain as much as 882MMboe within a sand-filled channel and fan system in the wider blocksCretaceous sequence.
Colin Kinley, chief operating officer at Eco,said: ‘With the final environmental certificates now in place we anticipate moving shortly to selection of drilling location, rig contract discussions and engineering planning for a well in Q3 2019 or Q1 2020.
Cooper is one of Eco’s four offshore licences in Namibia’s Walvis Basin, and the company’s drilling of Osprey will follow a period of heightened activity in the area. Tullow Oil recently spudded an exploration well targeting125MMbbls on the basin, although this was plugged and abandoned earlier this week following the discovery of non-commercial hydrocarbons. Meanwhile, fellow AIM oiler Chariot Oil and Gas plans to spud its much-anticipated Prospect S well near Eco’s 80pc-owned Tamar in Q4. On this, Kinley added:
‘The company’s strategy in Namibia has been to maintain a careful and cautious pace, to fully and completely understand the region and to de-risk each asset by using industry learnings, successes and experience. We have used each well drilled in the region to our advantage. To the south of the Cooper Block, PEL 37 was recently drilled by Tullow, and although it was disappointing commercially for our partners and friends, it has provided Eco with valuable data to help better understand the characteristics of our field. The well has provided us with key markers and our team will use these to our advantage as we move towards drilling.’
Today’s update follows a month of considerable progress for Eco at its 40-pc owned Orinduik Block in Guyana, South America. The period has seen the business release a maiden competent person’s report which put the block’s prospective resources at an impressive 2.9bn boe across ten leads.
It also saw significant player Total exercise an option a 25pc stake in Orinduik from Eco for $12.5m, a figure that will carry the latter firm for the cost of two-to-three wells without raising additional funds. When we spoke to Eco’s chief executive Gil Holzman about the progress earlier this month, he said: ‘
These are significant numbers for all the partners and most importantly the people of Guyana. Ten key leads have been identified on Orinduik to date. The partners will carefully consider in the coming months the prioritisation of the leads for drilling as we continue work on the drilling engineering and the environmental permitting.
The entrance of Total into the Orinduik Block provides further endorsement of the prospectivity of this License. With Tullow as Operator and the technical contribution that both Total and Eco now bring to the project, we look forward to working with these two world-class players in further progressing the exciting exploration of the Orinduik Block.’
Author: Daniel Flynn
Disclosure: The author does not own shares in the company mentioned in this article
