Eco Atlantic has entered into a strategic offshore exploration partnership agreement with Navitas Petroleum, granting the Israeli company exclusive options to acquire significant stakes in exploration blocks offshore Guyana and South Africa.

As per the agreement terms, Navitas will make a payment of $2m to Eco Atlantic to secure farm-in options for the Orinduik block offshore Guyana and Block 1 CBK in South Africa’s Orange basin.

In Guyana, Navitas can exercise an option to take an 80% operating stake in the Orinduik block within 12 months by paying an additional $2.5m. Should Navitas proceed, Eco Atlantic’s interest in the block would reduce to 20%.

Navitas would then carry Eco Atlantic’s interest through an Orinduik work programme, potentially including the drilling of an exploration well or appraising the existing Jethro-1 and Joe-1 heavy oil discoveries.

This carry will be capped at $11m (C$15.35m) net to Eco and will not include mobilisation costs.

Eco Atlantic chief executive Gil Holzman said: “Following a joint visit by our teams to Guyana later this month, we expect to gain clarity on our work programme and appraisal plan for Orinduik.”

For Block 1 CBK in South Africa, Navitas has six months to exercise its option to secure an operating stake of up to 47.5% by paying $4m and would carry Eco Atlantic’s share of an exploration programme.

Both the companies may increase their holdings in this block if a separate agreement between Eco Atlantic and local partner OrangeBasin Energies (OBE) is finalised.

As per this separate arrangement with OBE, Eco Atlantic will have the sole option to acquire an additional 20% interest in Block 1 CBK for a combination of cash and shares, with Navitas holding the right to buy 50% of this option up until February 2028.

If Eco Atlantic exercises its option, it will pay $500,000 (R8.48m) to OBE, followed by further payments of $500,000 and $3.8m upon completion.

Should Navitas choose to act on its option, it will reimburse Eco Atlantic for its proportion of the exercise cost.

If both companies exercise these options, OBE will have a 5% carried interest for a work programme that may feature drilling up to two contingent exploration wells.

If Eco Atlantic ultimately holds a 47.5% stake in Block 1 CBK, it will be carried by Navitas via the work programme up to a value of $7.5m.

In addition to the Guyana and South Africa options, Navitas will also have an option to potentially buy a minimum 25% of Eco Atlantic’s interests in the remainder of its upstream portfolio.

This includes Petroleum Exploration Licences (PEL) 97, 99 and 100 in the Walvis basin, offshore Namibia, as well as a minimum of a 25% interest in operator Azinam, which holds licences for Block 3B/4B offshore South Africa.

Eco Atlantic stated that the option proceeds will support its work programmes across the portfolio and help identify and evaluate new oil and gas exploration assets and opportunities.

Under this strategic partnership, Eco Atlantic and Navitas may collaborate on a 50:50 basis on future new ventures, and assets targeted and potentially bought by Eco Atlantic.

Navitas’ option to farm into these other assets will last for at least five years, with the possibility of an extension up to ten years if the Israeli company decides to take a stake in Orinduik and/or Block 1 CBK.