Eco (Atlantic) Oil & Gas, the Atlantic Margin-focused oil and gas explorer, said it received formal Ministerial approval on 1 October from Namibia's Minister of Industries, Mines and Energy for the transfer of a 60% participating interest across all three of its Namibian petroleum exploration licences to BP Namibia Energy Ltd.
The approval is the final governmental consent required under Section 11 of Namibia's Petroleum (Exploration and Production) Act, and the parties are now completing the remaining closing deliverables, with completion expected shortly.
Eco first announced the farmout agreement covering the Cooper, Guy and Tamar licences in April, under which BP takes operatorship and Eco retains a 25% participating interest in each of the three blocks.
The company is set to receive a one-time cash payment of $2.7m on completion, with BP carrying 100% of Eco's retained 25% interest, plus Eco's proportionate share of NAMCOR's 10% and local partners' 5% interests, through the current exploration phase.
The approved work programme covers seismic reprocessing on the Cooper licence and the acquisition of at least 3,000 square kilometres of new 3D seismic data across the Guy and Tamar licences.
Should BP and its partners commit to drilling an exploration well on entering the second renewal period in 2028, Eco can either exercise a put option, transferring a further 10% interest to BP in exchange for a full carry on its remaining 15% stake, capped at $21m net to Eco per well on each licence, or retain its 25% interest and fund its share of drilling costs.
The maximum aggregate carry payable by BP, should Eco exercise all three put options, is $63m.
"Securing final regulatory approval for the farm down of our Namibian portfolio to BP is a significant milestone for Eco and brings us towards completing this landmark transaction," said Gil Holzman, Eco Atlantic's president and chief executive.
The deal follows Eco's recent completion of a separate farm-down in South Africa, where it transferred a 37.5% working interest in Block 1 CBK to Navitas Petroleum for a $4m cash payment, retaining a 37.5% stake carried for the work programme.
Holzman said the company's focus now turns to "finalising our PSA negotiations in Guyana and completing the JHI acquisition announced earlier this year," a reference to the planned deal giving Eco a 35% participating interest in the Falkland Islands' PL001 licence.