Eco Guyana Oil and Gas (Barbados) Ltd. has agreed to acquire a 60% operated interest in Orinduik block, offshore Guyana, through the acquisition of Tullow Guyana BV (TGBV), a wholly owned subsidiary of Tullow Oil PLC, in exchange for a combination of upfront cash and contingent consideration.
Eco, via its wholly owned subsidiary Eco (Atlantic) Guyana Inc, currently holds a 15% working interest in the block. On completion of the deal, Eco, as operator and majority interest holder in Orinduik block, intends to begin exploration, obtain new partners, and engage in drilling.
Tullow Overseas Holdings BV, the parent of TGBV, will be paid $700,000 cash upon transfer of TGBV's 60% participating interest and operatorship of the license. Contingent considerations payable to Tullow is linked to the success of a series of potential future milestones which include $4 million in the event of a commercial discovery, $10 million payment upon the issuance of a production license from the Government of Guyana, and royalty payments on future production.
The transaction is expected to close in this year's second half, at which time Eco will hold an aggregate 75% participating interest, and TOQAP Guyana BV will continue to hold 25% interest.
In 2019, Tullow drilled two exploration wells on Orinduik which yielded uncommercial oil discoveries.
