TotalEnergies and partner QatarEnergy have entered into an agreement to acquire participating interests in Block 3B/4B, offshore South Africa, from Africa Oil South Africa, Azinam (a wholly owned subsidiary of Eco Atlantic Oil and Gas), and Ricocure.
Following completion of the transaction, TotalEnergies will hold a 33% participating interest in Block 3B/4B and assume operatorship, while QatarEnergy will hold a 24% interest.
The remaining interests will be held by existing license holders, Africa Oil SA (17%), Ricocure (19.75%), and Azinam (6.25%).
The transaction is subject to final approvals from relevant authorities.
The farm-in deal offers a maximum transaction value of up to $46.8 million to Africa Oil. Africa Oil will receive, subject to achieving certain milestones defined in the agreement, staged payments for a total cash amount of $10 million, of which $3.3 million is payable at completion, and the remaining balance in two successive payments conditional upon achievement of key operational and regulatory milestones.
The maximum transaction value, including carry, of up to $32.1 million is owed to Eco Atlantic, which includes payments due to Eco from Africa Oil and Ricocure.
“Following the Venus success in Namibia, TotalEnergies is continuing to progress its exploration effort in the Orange Basin, by entering this promising exploration license in South Africa,” said Kevin McLachlan, senior vice president, exploration, of TotalEnergies.
Africa Oil will receive a full carry of its 17% retained share of all joint venture costs, up to a cap, that is repayable to TotalEnergies and QatarEnergy from production, and which is expected to be adequate to fund the company’s share of drilling for up to two wells on the license.
"Attracting TotalEnergies and QatarEnergy as our new partners in Block 3B/4B is an endorsement of the exploration potential of the block,” said Africa Oil CEO Roger Tucker. “These opportunities are on trend with the discoveries in Namibia's Orange Basin, including Venus in Block 2913B. Both companies have deep geological knowledge of the basin with successful nearby discoveries.”
Eco Atlantic will also receive a full carry of its 6.25% retained share of all joint venture costs, up to a cap, repayable to TotalEnergies and QatarEnergy from production.
Block 3B/4B covers an area of 17581 km2 within the Orange Basin offshore South Africa in water depths ranging between 300 and 2500 m. This block lies to the southeast and on trend with number of oil discoveries including Venus and Graff.
Africa Oil has approximately 14000 km2 of 2D seismic and 10800 km2 of 3D seismic over Block 3B/4B and has identified a large set of exploration prospects, with most of the prospects lying in approximately 1500 m of water.
