Petroleum Africa
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Tuesday, July 30, 2024
Eco (Atlantic) Oil & Gas has signed an Assignment and Share Cancellation Agreement with Azinam, Eco’s wholly owned subsidiary, Africa Oil Corp and Africa Oil SA Corp (AOSAC), pursuant to which Azinam has agreed to sell and assign a 1% Participating Interest in Block 3B/4B offshore the Republic of South Africa. This includes the associated Exploration Right and Joint Operating Agreement rights to AOSAC in exchange for the cancellation of all common shares in the company and warrants over Common Shares held by Africa Oil. No additional rights in the rest of Eco’s portfolio assets in Guyana, Namibia and South Africa are part of the Agreement.
Africa Oil currently holds, in aggregate, 54,941,744 Common Shares and 4,864,865 Warrants, which, assuming conversion of the Warrants, would equal 16.16% on a diluted basis (c.15% non-diluted) of the total outstanding common shares of Eco worth approximately C$11m.
Upon completion of the conditions precedent to the Exchange Transaction, including requisite regulatory approvals from the South African Government, TSX Venture Exchange, applicable Canadian Securities Commissions, and the relevant approvals from the Block 3B/4B Joint Venture Partners, Azinam will assign the Assigned Interest to AOSAC and in return Africa Oil will transfer the Eco Securities for immediate cancellation. Upon Completion, Eco will hold a fully carried 5.25% interest in Block 3B/4B Offshore South Africa, reducing from the current 6.25%. As a result of the Exchange Transaction, Africa Oil will, following Completion, no longer be a shareholder in the Company and will no longer have the right to appoint a director to Eco’s Board of Directors.
As part of the transaction, Africa Oil has entered into a lock-up agreement, according to which it is restricted from trading, transferring, mortgaging or dealing in any of the Eco Securities until completion.
The Assignment Agreement serves Eco’s shareholders as a value creation initiative through a significant 16.16% (on a diluted basis) reduction in the Company’s total common shares count. The company currently has 370,173,680 Common Shares issued and outstanding. Upon and subject to completion, Eco’s issued and outstanding common share capital will, ceteris paribus, be reduced to 315,231,936 Common Shares. A further update will be provided on completion to confirm the timing for the cancellation of the Eco Shares.
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