A carried interest, a capped put option and ministerial approval as the final gate: a useful template for farm-downs.
Namibia’s Ministry of Industries, Mines and Energy has approved Eco Atlantic’s farm-down of PEL97, PEL99 and PEL100 to bp, clearing the final regulatory hurdle.
Deal terms
- bp takes a 60% participating interest and operatorship.
- bp will carry Eco’s remaining 25% through exploration.
- Eco receives US$2.7 million on completion.
- From 2028, Eco can put a further 10% to bp for a full carry, capped at US$21 million per well, per licence, or keep its 25% and fund its share of drilling.
Work programme
The work programme is already set: seismic reprocessing on PEL97 and more than 3,000 km² of new 3D seismic across PEL99 and PEL100.
What this means for clients
For operators and counsel structuring farm-downs, the deal is a useful template. It combines a carried interest, a put option with a defined cap, and ministerial approval as the final gate. For the Walvis Basin, it adds another major to an increasingly crowded operator roster.
Three features are worth copying or testing in your own deals. The carry fixes the seller’s exposure through exploration. The put option gives the seller a choice from 2028 between a full carry on a further 10% and funding its own share, and the per-well, per-licence cap limits the buyer’s exposure on that choice. And because ministerial approval is the last step, completion timing depends on the regulator, which should be reflected in conditions precedent and long-stop dates. In October we noted that the Mopane deal took roughly seven months from signing to ministerial approval (read the analysis). Lechêne, Iñiguez & Partners advises on farm-in and farm-out structuring in Namibia and across the region.
