News Americas, GEORGETOWN, Guyana, Mon. Aug. 14, 2023: Tullow Oil, a leading oil and gas exploration and production company, has recently announced a significant deal involving the sale of its 60% equity stake and operatorship in its Guyana Orinduik license to Eco Atlantic Oil & Gas for a cash consideration of US$700,000. The Orinduik license is situated within Guyana’s offshore oil and gas fields, covering an expansive area of approximately 2,100 square kilometres.
Tullow’s exploration efforts on the licence included drilling two wells in 2019, which unfortunately resulted in uncommercial oil discoveries. However, this latest development demonstrates Tullow’s strategic approach to optimizing its portfolio and unlocking value from its emerging basin licences. The company plans to channel the proceeds from this transaction towards its general corporate purposes.
In addition to the cash consideration, Tullow stands to receive contingent consideration of up to US$14 million. This sum is tied to potential future milestones, including the achievement of a commercial discovery and the issuance of a production licence from the Government of Guyana.
Jean-Medard Madama, Tullow’s Director of Exploration, Non-Operated Assets and Decommissioning, explained the rationale behind the transaction. He stated that it aligns with Tullow’s strategy to focus its capital expenditure on high-return producing assets and growth opportunities around existing infrastructure, while optimizing its portfolio through the realization of value from emerging basin licences.
Eco Atlantic’s President and CEO, Gil Holzman, expressed enthusiasm about the agreement, highlighting their belief in the potential of the Orinduik Block since 2014. The company’s initial two wells in 2019 uncovered two different oil plays, affirming the block’s potential. Eco Atlantic intends to engage in a farm-out process to further develop the license and begin preparations for drilling activities to explore the cretaceous layer, where light oil discoveries have been made in the nearby Stabroek Block.
Colin Kinley, Co-founder and COO of Eco Atlantic, added to the discussion by emphasizing the significant potential of the Orinduik Block. He explained that the block sits on a series of continental shelves leading into the basin, with a rich and prolific basin that offers substantial volumes of oil. The company’s experienced team is well-prepared to take on the operatorship role and aims to target stacked pay opportunities within the cretaceous layer, showing great optimism about the potential for substantial recoverable oil volumes.
The completion of this transaction is contingent upon several conditions precedent, including government and joint venture approvals. The process is expected to be finalized in the latter half of 2023, marking a new chapter in the development and exploration of the Orinduik license.