Eco Completes Transfer of 37.5% Interest in South Africa's Block 1 CBK; Navitas Takes Over as Operator

en.Wedoany.com Reported - On September 22, Eco (Atlantic) Oil & Gas completed the transfer of a 37.5% working interest in the offshore South Africa Block 1 CBK, with the transferee Navitas Petroleum acquiring the corresponding interest through its subsidiary and formally taking over as operator of the block. Prior to the completion of the transaction, Eco held a 75% working interest in the block; following closing, Eco and Navitas each hold 37.5%, and OrangeBasin Energies holds 25%. This closing has obtained Section 11 regulatory approval from the South African government and approval from the TSX Venture Exchange.

Block 1 CBK is located offshore in the Orange Basin of South Africa, adjacent to the Namibian border, covering an area of approximately 19,929 square kilometers. The block has three historical exploration wells, one of which tested a flow rate of 32.4 million standard cubic feet per day, while other gas shows and oil indications were also recorded. Following a joint technical evaluation based on existing seismic data, Eco and Navitas disclosed in August 2026 that the unrisked prospective resource estimates for the block include approximately 4.5 trillion cubic feet of natural gas and more than 36 billion barrels of oil, with further seismic data interpretation work to continue.

This interest transfer stems from the formal farm-out agreement signed by both parties in May 2026. At that time, Eco agreed to transfer a 37.5% working interest to Navitas, with the transaction subject to regulatory approval and a US$4 million cash payment as conditions to closing. Following the completion of the closing, Eco has received the US$4 million paid by Navitas; Navitas will also bear a portion of Eco's expenditures in the block's subsequent work program, up to a maximum of US$7.5 million. This carried amount will be repaid in the future through Eco's share of production revenue from the block after it comes into production.

Eco also retains an increase option arrangement. Its subsidiary Azinam South Africa previously signed an option agreement with OrangeBasin Energies, allowing it to further acquire a 20% participating interest in Block 1 CBK. Navitas has the right, subject to mutual agreement between the parties, to acquire half of that, i.e., an additional 10% working interest. If the option is fully exercised and allocated in the above proportions, the working interests of both Eco and Navitas in the block could increase to 47.5%, while OrangeBasin Energies would decrease to 5%. The relevant option may be exercised before the current initial exploration period expires in February 2028.

Block 1 CBK was initially entered by Eco in 2024 through a farm-in. Eco's Azinam South Africa at that time agreed to acquire a 75% working interest, and the South African government completed the granting of the exploration right and operating right in June 2025. In May 2026, Eco signed a 37.5% interest transfer agreement with Navitas; following the completion of regulatory approvals and closing in September, the operating right of the block was formally transferred to Navitas.