Mr. Gil Holzman reports

ECO (ATLANTIC) OIL AND GAS LTD ANNOUNCES BLOCK 3B/4B FARM IN -- TOTALENERGIES & QATARENERGY

Eco (Atlantic) Oil & Gas Ltd. has signed a farmout agreement (FOA), pursuant to which Azinam Ltd., its wholly owned subsidiary, will farm out a 13.75-per-cent participating interest in Block 3B/4B, offshore South Africa, as part of an aggregate 57-per-cent farm-down transaction along with its joint venture (JV) partners, Africa Oil SA Corp. and Ricocure (Proprietary) Ltd., to TotalEnergies EP South Africa BV, which will become operator, and QatarEnergy International E&P LLC.

Upon completion of the transaction, Eco will retain a 6.25-per-cent interest in Block 3B/4B.

Transactions highlights

Maximum transaction value, including carry, of up to $32.1-million (U.S.) to Eco, which includes payments due to Eco from Africa Oil and Ricocure under previously announced agreements:

• As a result of the 6.25-per-cent farmout transaction with Africa Oil, announced on July 11, 2023, Eco will receive up to $5.5-million (U.S.) in two payments, $4-million (U.S.) on completion of the transaction, as defined herein, and a further $1.5-million (U.S.) on spudding of the first exploration well, and $1.2-million (U.S.) due from Ricocure pursuant to the original Azinam-Ricocure 2019 farmout agreement due on completion.
• The TotalEnergies and QatarEnergy transaction will deliver, subject to achieving certain milestones, staged cash payments, comprising a total cash payment of $11.92-million (U.S.), of which $1.92-million (U.S.) is payable at completion and the remaining balance in two equal successive payments, conditional upon the receipt of customary regulatory approvals, and the balance on spudding of a first exploration well.
• Eco will also receive a full carry of its 6.25-per-cent retained share of all JV costs, up to a cap, repayable to TotalEnergies and QatarEnergy from production, which is expected to be adequate to finance the company's share of drilling for up to two wells on the licence.

Gil Holzman, co-founder and chief executive officer of Eco, commented: "We are delighted to have signed this agreement with TotalEnergies and QatarEnergy. Block 3B/4B sits in one of the most prolific and exciting areas in the world for offshore oil and gas exploration and development. The decision by two of the largest energy companies globally to farm into this licence is strengthened by their significant understanding of the Orange basin, having made the Venus large light-oil discovery just recently north of the basin in Namibia.

"I would like to thank our partners at Africa Oil and Ricocure for their co-operation and jointly negotiating this farmout agreement. We now look forward to working closely with the government of South Africa and our new partners on the exploration licence to prepare first drilling."

Pursuant to the terms of the FOA, the completion of the transaction is subject to the satisfaction of customary conditions precedent, including, but not limited to, the receipt of requisite regulatory approvals (Section 11) from the government of South Africa. On completion, the Block 3B/4B interests of the JV partners will be as follows: TotalEnergies EP South Africa will become the operator of the block, holding a 33-per-cent participating interest; QatarEnergy International E&P will hold a 24-per-cent participating interest; Africa Oil SA, a wholly owned subsidiary of Africa Oil Corp., will retain a 17-per-cent participating interest; Azinam, a wholly owned subsidiary of Eco (Atlantic) Oil, will retain a participating interest of 6.25 per cent; and Ricocure will retain a 19.75-per-cent participating interest.

About Eco (Atlantic) Oil & Gas Ltd.

Eco (Atlantic) Oil is an 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 operates a 100-per-cent working interest in the 1,354-square-kilometres Orinduik block. In Namibia, the company holds operatorship and an 85-per-cent working interest in four offshore petroleum exploration licences -- PELs 97, 98, 99 and 100 -- representing a combined area of 28,593 square kilometres in the Walvis basin.

Offshore South Africa, Eco is operator and holds a 50-per-cent working interest in Block 2B and a 20-per-cent working interest in Block 3B/4B, in the Orange basin, totalling approximately 20,643 square kilometres.