Eco Atlantic expects payment after Tullow exits agreement in Namibia
Eco has received a formal notice from Tullow Namibia Limited, in accordance with the JV parties 2014 Farm Out Agreement, confirming that it is unable to either enter into the Second Renewal Period under the PEL30 license (Cooper Block) or to make a financial commitment to drilling on the Block.
The 2014 Farm Out Agreement required Tullow to make a financial commitment to drilling one exploration well before renewing its interest in the Second Renewal Period in Q1 2019, and, in the event that a well was not drilled having entered the Second Renewal Period, pay Eco a significant penalty.
Tullow's decision is as a result of its own proposed farm in partner, ONGC, as announced on 21 November 2017, now withdrawing from their agreement with Tullow on PEL30 and so due to exploration budget prioritisation Tullow will now transfer their 25% working interest to Eco.
As a result, Eco has had the 1,100 km2 3D survey, full processing and interpretation and past costs all paid for by Tullow and it will now receive back Tullow's Working interest.
On completion of the transfer, Eco will now hold a 57.5% Working Interest in the Cooper Block. With more than three and a half years still to drill on the Cooper Block under the terms of the licence, and with a drill ready target (The Osprey Prospect), the company has already started discussions with potential farm-in partners to replace Tullow and to jointly drill the Osprey Prospect.
Eco's other partner on the Cooper Block, Azinam, has previously announced that it would like to proceed with further exploration of the block, including the drilling of a well. ■