Eco Atlantic to acquire rest of JHI Associates

(Sharecast News) - Eco Atlantic Oil & Gas said on Wednesday that it has agreed to acquire the remaining shares in JHI Associates in a transaction valued at up to about $52.3m, giving the company full ownership of assets in the North Falkland Basin and offshore Guyana. The AIM-traded, Atlantic Margin-focused exploration company said it signed a binding agreement with JHI Associates on 10 March to acquire all issued and to-be-issued shares it does not already own, with the consideration to be paid entirely in Eco shares.

Under the terms of the deal, Eco said it would issue up to 96,307,811 new shares, representing around 21.8% of its enlarged share capital.

The acquisition valued JHI at about $52.3m (£39m) based on Eco's 30-day volume weighted average price on the TSX Venture Exchange, or £46.7m ($62.6m) based on the company's closing share price on AIM on 10 March.

JHI's principal assets included a 35% working interest in the PL001 licence in the Falkland Islands and a 17.5% interest in the Canje Block offshore Guyana.

The PL001 licence lies adjacent to the Sea Lion oil field, the first major offshore development in the North Falkland Basin, which was being developed by Navitas Petroleum and was expected to produce first oil in 2028.

Eco said the acquisition would align it with Navitas as a strategic partner in the Falklands and expand its exposure to emerging hydrocarbon provinces across the Atlantic Margin, complementing its existing portfolio in Namibia and South Africa.

The PL001 block covers about 1,126 square kilometres in water depths of 400-500 metres and contains more than 50 identified leads and prospects from 3D seismic data.

A competent person's report previously estimated prospective resources of about 3.1 billion barrels of recoverable oil on an unrisked best-estimate basis.

Eco noted that Navitas had agreed to farm into the licence with a 65% interest, subject to approval from the Falkland Islands government.

The agreement included a fully funded carry loan for exploration activities of up to $14m net to JHI for an exploration well and potential appraisal well, which Eco would assume following completion.

It said the loan would be repaid from 85% of JHI's free cash flow from production if the project enters production.

The acquisition would also provide exposure to the Canje Block offshore Guyana, which is operated by ExxonMobil with partners TotalEnergies and Mid Atlantic Oil & Gas.

Eco said the licence lapsed earlier this month and was currently subject to extension discussions with the Guyanese government.

It said completion of the transaction, expected in the third quarter of 2026, remained conditional on several approvals including a proposed five-year extension of the PL001 licence, regulatory approvals and shareholder approval from JHI investors.

Chief executive Gil Holzman said the deal marked a significant strategic step for the company.

"This transaction represents a further transformational milestone in Eco's strategic evolution and reinforces our disciplined approach to assembling high-quality Atlantic Margin acreage alongside best-in-class operating partners."

He added that the proximity to the Sea Lion development would enhance the commercial potential of the licence.

"By securing a significant working interest adjacent to the Sea Lion Field, and further aligning ourselves with Navitas, a proven, development-focused operator with a clear pathway to first oil, Eco is advancing beyond pure exploration exposure and positioning itself within a basin entering a new phase of development-led growth."

Holzman said the company believed the transaction would allow it to participate in the next phase of development in the region while maintaining capital discipline and maximising shareholder value.

At 1339 GMT, shares in Eco Atlantic Oil & Gas were up 13.4% at 55p.

Reporting by Josh White for Sharecast.com.