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Oil and gas company Eco Atlantic has agreed to acquire a 10% stake in Guyana-focused deepwater exploration company JHI Associates (JHI).

Eco has subscribed for five million new common shares in JHI, each at a price of $2.

Additionally, Eco received a warrant to subscribe for an additional 9.16 million new common shares in JHI for a period of 18 months.

Subject to exercising the full JHI Warrant, Eco will own a 10% stake in JHI on a fully diluted basis.

JHI holds a 17.5% stake in the ExxonMobil-operated Canje block offshore Guyana where drilling is underway at the Jabillo-1 well.

Other partners in the block include Total (35%), and Mid-Atlantic Oil & Gas (12.5%).

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By GlobalData

In a press statement, Eco Atlantic said: “This transaction will increase Eco Atlantic’s presence in the Guyana-Suriname basin to include a three well drilling programme, with the first two firm wells on the Canje Block drilling in 2021 and at least one on the Orinduik Block, subject to partner approval.”

The Canje block’s 2021 multi-well exploration programme aims to test the extension of the prolific hydrocarbon system in the adjacent Stabroek block.

Since 2015, this system proved the presence of more than nine billion barrels of oil equivalent of recoverable resources in the Stabroek Block.

Eco Atlantic non-executive director and Africa Oil president and CEO Keith Hill said: “We are very pleased to have Eco team up with the two most knowledgeable operating partners in the basin and believe the Canje Block has the potential to hold resources comparable to the world class Stabroek Block which is undoubtedly the most successful exploration campaign in recent history.

“Combining this with the holdings in the Orinduik Block, Eco is well-positioned to be part of the historic oil development in Offshore Guyana.”