Things Hotting Up, page-4

Oil groups eye offshore Namibia

Smaller E&P players
and majors jostle for acreage in African frontier region

Sylvia Pfeifer, Energy Correspondent
Visitors to Namibia’s coast have traditionally been drawn by the promise of watching wildlife, walking the shipwreck-strewn beaches or even dune-biking.

For international investors the country is known for its uranium deposits and diamonds but not as an oil and gas frontier. All that may be about to change.

Interest in Namibia as an oil and gas region has strengthened in recent years, with majors such as France’s Total and ExxonMobil of the US investing in acreage. The country has some of the same geological formations as Brazil, whose pre-salt fields have attracted much investment.

So far, only small volumes of hydrocarbons have been produced. However, small-cap investors hope that planned drilling activity over the next few months will provide a boost, particularly to three Aim-quoted exploration and production companies active in the region.

Eco Atlantic Oil & Gas

Quoted on Aim and the Toronto stock exchange, Eco holds exploration acreage offshore of Guyana and Namibia. It has been active in Namibia for more than eight years and holds licences to four blocks in the Walvis Basin.

Gil Holzman, Eco president and chief executive, said a recent industry conference in London attracted an “amazing turnout” and was the result of “several years of a lot of effort to bring Namibia to the forefront of the investor community”.

Just eight years ago, he added, more than 75 per cent of Namibia’s offshore acreage was available but all that has changed. There was currently “a lot of competition” for acreage, said Mr Holzman.

All the companies active in the Walvis Basin have acquired extensive 3D seismic data and it is expected that drilling will start in the second half of this year. The first well will be drilled by Tullow Oil in September.

Success here, said analysts at Hannam & Partners, “would de-risk Eco Atlantic’s prospects and management would look to drill the 245m barrel Osprey prospect, where it has a 37.5 per cent working interest”. Eco Atlantic’s share of the cost of this well would be paid by Tullow Oil, which is also a partner here.

Eco shares have risen from 17.5p a year ago to 32p at the close of Friday trading.

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