Source: Business Express
In a strategic move signalling a refined focus for its Namibian ambitions, Eco (Atlantic) Oil & Gas Ltd. has successfully executed a farm-out agreement for its Sharon License, effectively passing operatorship to a newly empowered, wholly Namibian-owned company. This transaction, detailed in the company’s recently released Q2 2025 financial results, highlights a shifting dynamic within Namibia’s burgeoning offshore oil and gas sector, emphasizing local capacity building while the international explorer sharpens its strategy on its other highly prospective assets.
The company’s consolidated financial statements for the period ending September 30, 2025, reveal that on September 15, 2025, Eco Atlantic finalised an agreement to sell its entire 85% working interest in the Sharon License (Petroleum Exploration License 098) to Lamda Energy. This marks a significant divestment, transferring all obligations and liabilities for the 5,700 square kilometre offshore block.
A Milestone for Local Empowerment
What makes this more than a simple corporate transaction is the nature of the acquiring entity. The report describes Lamda Energy as “a privately owned and operated offshore oil and gas company with an experienced Operating Team.” Crucially, it notes that Lamda Energy “will become a wholly Namibian-owned qualified offshore Operator upon Ministerial approval.”
This transition of a deep-water offshore license to a Namibian operator is a landmark event for the country’s energy industry. It represents a tangible step towards the government’s stated goals of fostering local expertise and ownership in the strategic hydrocarbon sector. Eco Atlantic has committed to ensuring a “smooth and responsible handover” by retaining a board seat at Lamda Energy to support a “comprehensive transition and knowledge transfer.” The company explicitly called this a “significant milestone in building local capacity and advancing inclusive energy development.”
“For the first time, we are seeing the pieces fall into place for true Namibian operational control in the offshore arena,” said an industry analyst who preferred to remain anonymous. “Eco Atlantic is not just selling an asset; it is cultivating a local partner. This is a savvy move that aligns with national policy and could ease their future operations and partnerships within the country.”
The Financial Mechanics and Future Prospects
Financially, the immediate upfront payment from Lamda Energy is for administrative costs, the specific amount of which was not disclosed in the notes. However, the agreement includes a potentially lucrative future clause for Eco Atlantic. Should Lamda Energy later farm-out a portion of its interest to a third party, it will be required to make contingent payments to Eco Atlantic “at a fixed quantum per percentage interest farmed out, up to a maximum of $2 million.” This provides Eco Atlantic with a potential future revenue stream from the Sharon block without having to bear any of the ongoing exploration costs or risks.
This divestment allows Eco Atlantic to concentrate its financial and managerial resources on its three other Namibian licenses: Cooper, Guy, and Tamar. The report confirms that all four of the company’s Namibian licenses, including the now-divested Sharon, received a formal 12-month extension to their First Renewal Exploration Period on August 27, 2025. The revised expiry date for these licenses is now August 26, 2026, providing the company and its partners additional time to conduct exploration activities and secure farm-in partners.
The Broader Namibian Portfolio in Focus
Eco Atlantic’s remaining Namibian portfolio is substantial. According to the segmental information in the financial report, the carrying value of the company’s petroleum and natural gas licenses in Namibia stood at a formidable $15.5 million as of September 30, 2025, representing the vast majority of its global asset base outside of Guyana.
The Cooper License (PEL 097), covering approximately 5,788 square kilometres, and the Tamar License (PEL 100), covering 5,649 square kilometres, are seen as particularly promising. The report specifically notes that in August 2024, the Company “purchased the license to 1,324 km of existing 2D seismic survey in the Tamar Block,” indicating active and ongoing technical work to de-risk the asset and make it more attractive to potential partners.
The Guy License (PEL 099) is the largest in the portfolio at 11,457 square kilometres. Across all licenses, Eco Atlantic maintains an 85% working interest, with the National Petroleum Corporation of Namibia (NAMCOR) holding a 10% carried interest and other local partners holding the remaining 5%.
Navigating Financial Headwinds
This Namibia-centric strategy unfolds against a backdrop of broader financial challenges for the exploration company. The financial statements reveal a net loss of $3.21 million for the six months ended September 30, 2025, and an accumulated deficit of over $103 million since inception. The company’s cash reserves have decreased from $4.7 million at the end of March 2025 to just over $2 million by September 30, 2025.
The report’s “Going Concern” note explicitly states that the company’s ability to continue operations depends on a combination of factors, including the “discovery of economically recoverable petroleum and natural gas licenses” and the “ability of the Company to obtain financing.” This underscores the critical importance of the farm-out process, not just for the Sharon block, but for the entire Namibian portfolio. Successfully attracting well-capitalised partners to fund drilling campaigns on the Cooper, Guy, and Tamar blocks is essential for Eco Atlantic’s future.
The strategic exit from the Sharon license, therefore, serves a dual purpose: it streamlines the company’s focus onto its core Namibian assets while simultaneously demonstrating a commitment to local participation that may well strengthen its standing with regulators and potential investors. It is a pragmatic move that reduces immediate financial burdens and political risk.
As the eyes of the global energy world remain fixed on Namibia’s Orange Basin following major discoveries, Eco (Atlantic) Oil & Gas is betting that a leaner, more focused approach—and a partnership with Namibian ingenuity—will be the key to unlocking the vast potential that lies beneath the waves. The success or failure of this refined strategy will not only determine the future of the international junior explorer but will also play a part in shaping the next chapter of Namibia’s own energy story.
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Author: admin
Managing the Namibia Oil and Gas Platform