Canadian-based oil company Eco Atlantic has joined the drilling campaign in the Canje Block offshore Guyana, purchasing 10 per cent of the shares that were held by fellow Canadian JHI Associates in the block.
According to a statement, JHI had a 17.5 per cent interest in the Canje Block, which is operated by oil giant ExxonMobil. Exxon farmed in as an operator in the block back in 2016, acquiring a 35 per cent stake.
With two wells planned in the Canje Block this year, Eco’s entrance into the fray couldn’t have come at a better time. The joint venturers are currently drilling the Jabillo-1 well using the Stena Carron drill ship. The Stena DrillMAX is meanwhile scheduled to drill the Sapote-1 well later in the year, in the eastern part of the block.
The Jabillo-1 well happens to be the second of three exploration wells Exxon had scheduled for drilling in the Canje Block in 2021. The other two are the Bulletwood-1 well, which had not turned up commercially viable oil reservoirs and the still to be drilled Sapote-1 well.
“Following five years of technical and seismic data studies, the partners identified multiple drilling prospects, leading to the award of a multi-well drilling permit from the Guyanese authorities,” the statement said.
“This year they plan to test the extension of the hydrocarbon system in the adjacent Stabroek Block which has resulted in more than 9 (billion barrels of oil equivalent) of discovered resources since 2015,” it added.
According to the terms of the partnership, Eco Atlantic Board member Keith Hill will join the JHI Board as Eco’s nominee with immediate effect. It was further explained that Eco will receive funding from existing cash reserves and an expected private placement of shares to Africa Oil and Charlestown Energy. This will leave Eco with strong cash reserves for future exploration wells in Orinduik.
The statement quoted Eco Atlantic Co-Founder and Chief Executive Officer, Gil Holzman, who explained that the decision was arrived at following thorough technical analysis on the Canje Block by both Eco and their partners at Africa Oil Corporation.
“We are delighted to advise the market on this exciting transaction, and to be back drilling with results expected imminently. The carried Jabillo-1 well is underway and is expected to reach target in the coming few weeks, providing our shareholders with high impact near term catalysts.”
“While we eagerly anticipate resuming drilling activity on our Orinduik Block next year, pending partner approvals, and we have made sure to preserve sufficient funding for that, we are very excited that we now have two imminent Guyana wells in our portfolio as well as additional multiple prospects inventory on the Canje Block,” he said.
Holzman further recalled that since 2014, Eco has strongly focused on the hydrocarbon potential offshore Guyana. According to him, this strategic deal with JHI marks the beginning of a wider presence and potential increased future collaboration in the Guyana basin.
Non-Executive Director of Eco Atlantic and President and CEO of Africa Oil, Keith Hill was also quoted as lauding the deal. He noted that combined with their holdings in the Orinduik Block, Eco is well positioned to share in the historical oil developments offshore Guyana.
“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,” he said.
While Eco is a newcomer in the Canje Block, it had announced a gross figure of approximately 2.9 billion barrels of oil and gas equivalents in its Orinduik Block back in 2018. This amount was verified by the first independent assessment done on the field.
The Orinduik oil block is just a few kilometres from Exxon’s discoveries in the Liza and Payara fields. It is under the administration of Eco Guyana and Tullow, who signed a 10-year Petroleum Prospecting licence and Production Sharing Agreement with Guyana in 2016. Oil was found in Orinduik back in 2019, with the Jethro-1 and Joe-1 wells.