The acquisition is said to strengthen Eco’s strategic acreage position in Guyana and supports further drilling activity in the coming years
Eco Atlantic to buy JHI’s stake in Canje Block. (Credit: Nico Franz from Pixabay)
Canada-based Eco (Atlantic) Oil & Gas has signed a binding term sheet to acquire JHI Associates (JHI), along with its 17.5% working interest (WI) in Canje Block offshore Guyana.
Under the terms of the agreement, the company will acquire JHI in an all-share transaction valued at around $52m, based on the current share price.
According to JHI’s audited financial statements, it had total gross assets worth around $30.7m, with around $19.7m in cash, and $3.5m in book value of its stake in Canje Block.
The acquisition is expected to be completed in Q2 2022 subject, subject to signing of an arrangement agreement and satisfactory completion of due diligence by Eco.
Also, closing of the deal is also based on any necessary Government of Guyana, Canje Block partners, and stock exchange approvals.
Upon closing, Eco Atlantic would become the only owner of JHI’s cash balance, valued at around $15m, along with its 17.5% stake in the Canje Block.
Eco Atlantic co-founder and CEO Gil Holzman: “Being a shareholder of JHI since last year has given us a deep understanding of the Canje Block and its prospectivity.
“It has also given us the opportunity to get to know the great management team at JHI and their technical and business achievements to date.
“This acquisition gets us another step closer to that goal and builds on the Azinam acquisition we announced earlier this year.”
The acquisition is said to strengthen Eco’s strategic acreage position in Guyana and supports further drilling activity in the coming years.
Canje Block is located offshore Guyana, directly adjacent to the Stabroek Block where ExxonMobil has discovered more than 10 billion barrels of oil
Covering around 4,800km2 area, the block is located around 180 to 300km offshore Guyana in water depths ranging between 1700 and 3000 meters.
It is operated by Esso Exploration & Production Guyana Limited, a subsidiary of ExxonMobil, alongside TotalEnergies E&P Guyana, JHI and Mid-Atlantic Oil & Gas.
According to the company, Canje is covered with 6,100km2 of 3D seismic and holds more than three dozen prospects in four proven plays.
In June last year, Eco Atlantic has acquired up to 10% stake in JHI Associates (JHI) to become a partner in ExxonMobil-operated Canje block, offshore Guyana.