Mr. Gil Holzman reports

ECO (ATLANTIC) OIL AND GAS LTD. ANNOUNCES SALE OF 6.25% WI IN BLOCK 3B/4B

Eco (Atlantic) Oil & Gas Ltd. has signed a legally binding letter of intent pursuant to which its wholly owned subsidiary, Azinam Ltd., will farm out 6.25-per-cent participating interest in block 3B/4B, offshore South Africa to Africa Oil SA Corp., a wholly owned subsidiary of Africa Oil Corp. Pursuant to the terms of the LOI, the completion of the acquisition is subject to the satisfaction of customary conditions precedent including, but not limited to, the receipt of requisite regulatory approvals from the government of South Africa and the TSX Venture Exchange.

The consideration for the acquisition is up to $10.5-million (U.S.) in cash, payable conditional on certain milestones as set out below:

• $2.5-million (U.S.) within 30 days of signing of the LOI;
• $2.5-million (U.S.) upon government approval for the transfer of the 6.25-per-cent interest in block 3B/4B to Africa Oil;
• $4-million (U.S.) upon the completion of targeted farmout to a third party;
• $1.5-million (U.S.) upon spudding of the first exploration well in block 3B/4B.

On closing of the acquisition, which is subject, amongst other things, to Section 11 approval for the transfer from the government of South Africa, TSX Venture Exchange approval and customary pre-emption provisions, the block 3B/4B interests of the joint venture partners in block 3B/4B will be as follows:

• Africa Oil SA Corp., a wholly owned subsidiary of Africa Oil and the operator of the block, holding a 26.25-per-cent participating interest;
• Azinam Ltd., a wholly owned subsidiary of Eco (Atlantic), holding a participating interest of 20 per cent;
• Ricocure Pty. Ltd., holding the remaining 53.75-per-cent participating interest.

The JV partners continue to progress the collaborative farm-out process, as previously announced, for up to a 55-per-cent gross working interest in the block, with various potential parties.

As announced on March 21, 2023, the application process for a permit to drill one well and one contingent well (and potentially up to five wells) within an area of interest in the north of block 3B/4B remains under way.

Completion of previously announced acquisition of additional interest in block 3B/4B, South Africa

Further to the company's announcement of June 27, 2022, the company can confirm that it will issue 1.2 million new common shares of no par value in the company to Lunn Family Trust in place of the $500,000 (U.S.) cash consideration due in respect of the acquisition of the 6.25-per-cent interest in block 3B/4B from Lunn Family Trust. The consideration shares represent the full and final component of the completion consideration in respect of the acquisition announced on June 27, 2022, and there are no additional shares or cash due to the seller.

Gil Holzman, co-founder and chief executive officer of Eco Atlantic, commented:

"We are very pleased to agree this transfer of a portion of our WI on the block to our strategic alliance partner Africa Oil. The restructure of the WI will result in Africa Oil holding 26.25 per cent and Eco 20 per cent, and will strengthen the JV position amid ongoing negotiations with third parties to farm into the block and execute a drilling campaign. Since Africa Oil is already established as JV partner and operator on the block, receipt of the requisite regulatory approval for the transfer is expected to be straightforward.

"We look forward to continuing our work with the South African government and regulatory bodies in terms of our environmental authorization process and in the active exploration of block 3B/4B. The initial cash to be received from Africa Oil will enable Eco Atlantic to fund its growth opportunities elsewhere and with no shareholders dilution, while maintaining a strategic and considerable 20% working interest in this highly prospective block (prefarm out to a third party)."

Related party transaction

Alternative Investment Market rules disclosure

Africa Oil is a substantial shareholder in Eco, holding more than 10 per cent of the company's issued share capital, and Keith Hill, a director of Africa Oil, is also a non-executive director of the company. Africa Oil is therefore a related party as defined by the AIM Rules for Companies. Accordingly, the acquisition by Africa Oil is a related party transaction pursuant to Rule 13 of the AIM Rules for Companies. The independent directors for the purposes of the acquisition, being all of the directors other than Mr. Hill, having consulted with the company's nominated adviser, Strand Hanson Ltd., consider that the terms of the acquisition to be fair and reasonable insofar as Eco's shareholders are concerned.

TSX-V disclosure

Due to the inclusion of Africa Oil (and by virtue of a mutual director Mr. Hill) the proposed transaction will constitute a non-arm's-length transaction (as such term is defined in the policies of the TSX-V) and a related party transaction in accordance with Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions. However, the proposed transaction will be exempt from the formal valuation and the minority shareholder approval requirements of MI 61-101 because at the time the transaction was agreed to, neither the fair market value of the subject matter of, nor the fair market value of the consideration for, the transaction, insofar as it involves interested parties, exceeded 25 per cent of Eco's market capitalization.

Admission and total voting rights

Application has been made for admission of the 1.2 million consideration shares, which will rank pari passu with existing common shares, to trading on AIM. It is expected that admission will become effective, and trading in the consideration shares will commence, on or around 8 a.m. on July 14, 2023.

On admission, the enlarged issued share capital of the company will be 366,882,014 common shares. The above figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the company.

About Eco (Atlantic) Oil & Gas Ltd.

Eco (Atlantic) is a TSX-V and AIM-quoted Atlantic Margin-focused oil and gas exploration company with offshore licence interests in Guyana, Namibia and South Africa. Eco aims to deliver material value for its stakeholders through its role in the energy transition to explore for low carbon intensity oil and gas in stable emerging markets close to infrastructure.

Offshore Guyana in the proven Guyana-Suriname basin, the company holds a 15-per-cent working interest in the 1,800-square-kilometre Orinduik block operated by Tullow Oil. In Namibia, the company holds operatorship and an 85-per-cent working interest in four offshore petroleum licences: PELs 97, 98, 99 and 100, representing a combined area of 28,593 square km in the Walvis basin.

Offshore South Africa, Eco is operator and holds a 50-per-cent working interest in block 2B and a 26.25-per-cent working interest in block 3B/4B operated by Africa Oil, totalling about 20,643 square km.