TIDMECO
RNS Number : 1104K
Eco (Atlantic) Oil and Gas Ltd.
31 August 2021
31 August 2021
ECO (ATLANTIC) OIL & GAS LTD.
("Eco," "Eco Atlantic," "Company," or together with its
subsidiaries, the "Group")
Unaudited Results for the three months ended 30 June 2021
Corporate and Operational Update
Eco (Atlantic) Oil & Gas Ltd. (AIM: ECO, TSX -- V: EOG) ,
the oil and gas exploration company with licences in the proven oil
province of Guyana and the highly prospective basins of Namibia, is
pleased to announce its results for the three months ended 30 June
2021, alongside a corporate and operational update.
Results Highlights:
Financials:
-- Cash and cash equivalents of US$4.85 million (including
restricted deposits) and no debt as of 30 June 2021.
-- Raised US$4.9m in the form of a private placement in July 2021.
-- Total assets of US$17.9 million, total liabilities of $2.7
million and total equity of US$15.2 million as of 30 June 2021.
Operations:
Eco Atlantic Oil & Gas
-- Orinduik Block offshore Guyana - all seismic data
reprocessing completed and multiple light sweet oil drilling
prospects are being reviewed by Eco and its licence partners (the
"JV Partners"), with high-graded candidates being considered for
the 2022 drilling programme. The intention is to provide further
definition to the upper and lower Cretaceous interpretation and
target selection for drilling. Target selection is expected in Q3
2021.
-- Continuing to evaluate additional asset opportunities in both
West Africa and South America with its strategic partner and
substantial shareholder Africa Oil Corp - focus on near-term
high-impact exploration opportunities.
-- Closed transaction (28 June 2021) with JHI Associates Inc.
("JHI"), a private company and holder of 17.5% working interest
("WI") in the Canje Block offshore Guyana, to acquire up to a 10%
interest in JHI on a fully diluted basis (the "JHI Transaction")
and appointment of Keith Hill, a non-executive Director of the
Company, to the board of directors of JHI.
o The JHI Transaction increases Eco Atlantic's presence in the
Guyana-Suriname basin, increasing its Guyana acreage exposure from
1,800 km(2) to 6,600 km(2) and providing exposure to near-term
drilling, with one well drilled subsequent to the JHI Transaction
on the Canje Block, Jabillo-1, and further well, Sapote-1, now
drilling, and at least one planned on the Orinduik Block in 2022,
subject to partner approval.
o Received a detailed update from JHI regarding the Jabillo-1
well in the Canje Block, offshore Guyana on 5 July 2021, which
reached its planned target depth and was evaluated, but did not
show evidence of commercial hydrocarbons.
o ExxonMobil spud the Sapote-1 well on the Canje block, offshore
Guyana, on 29 August 2021, which is expected to reach target depth
within 60 days. The Sapote-1 well is the second well in the
drilling programme, following the Jabillo-1 well.
Outlook:
Guyana
-- Guyana continues to be one of the most prolific exploration
regions in the world, with over nine billion barrels of oil
discovered in the last five years. Eco and the JV Partners* have
already delivered two substantial oil discoveries on the Orinduik
Block and the Block continues to offer significant upside
potential. With the recent increase in oil prices, the JV Partners
will revisit the Jethro discovery commercialisation potential.
-- As previously reported, Eco is fully funded for further
planned / near term drilling on the Orinduik Block and, with its JV
Partners, is assessing all opportunities available to drill at
least one exploration well into the light oil cretaceous stacked
targets as soon as practical. The Company is fully aligned with its
JV Partners on careful target selection for the next drilling
campaign, based on the reprocessed 3D seismic data on the block and
nearby oil discoveries. Eco expects to be able to update the market
on further drilling plans later in Q3 2021.
-- Posted by the Environmental Protection Agency ("EPA") Guyana
on 8 August 2021, ExxonMobil applied for environmental
authorisation for a 12-well Exploration and Appraisal Drilling
Programme in the Canje Block, offshore Guyana in 2022.
-- The JHI Transaction provides the Company with immediate
exposure to an active drilling programme in the Canje Block
offshore Guyana. JHI updated Eco on 29 August 2021 that the Block
Operator ExxonMobil confirmed the spud of a second exploration
well, Sapote-1. The well operations is planned to take up to 60
days.
*The Orinduik Block JV partners are Eco Atlantic (15% working
interest ("WI")), Tullow Guyana B.V. ("Tullow") (Operator, 60% WI)
and TOQAP Guyana B.V. ("TOQAP") (25% WI) a company jointly owned by
TotalEnergies E&P Guyana B.V. (60%) and Qatar Petroleum (40%)
.
Namibia
-- The Company's licences in Namibia cover approximately 28,593
km(2) , with over 2.362 BBOE of prospective P50 resources.
-- Eco has a strategically significant acreage position
in-country and is progressing its various work programmes across
its four blocks offshore Namibia. The Company has witnessed
considerable interest from multiple international oil companies in
Namibia.
-- The Company continues to monitor upcoming drilling activity
in the region, two high impact deepwater wells in southern Namibia,
operated by TotalEnergies and Shell respectively have been
confirmed to commence in Q4 2021.
-- TotalEnergies Venus-1 well using the Maersk Venturer was
pushed back in 2020 and now expected to spud in Q4 2021. It was
reported on 17 August 2021, Shell Namibia have awarded the Valaris
DS-10 the contract to drill Graff-1 well, expected to start in Q4
2021 with an estimated duration of 60 days.
Solear Ltd.
-- Solear, a majority owned subsidiary of Eco, is an independent
renewable energy company focused on grid-scale solar development
projects in southern Europe.
-- Solear's near-term objective is to develop its pipeline of
solar assets with competitive rates of return through acquisition,
development, and construction of solar assets, led by an
experienced renewable energy team.
Corporate:
-- Throughout the ongoing COVID-19 pandemic, Eco has prioritised
the welfare of its employees and partners.
-- The Company continues to keep a strict control over costs
throughout the business, which continues to generate material
savings, ensuring that Eco remains well capitalised with a strong
balance sheet.
Gil Holzman, President and Chief Executive Officer of Eco
Atlantic, commented:
"It has been a busy period for Eco as we endeavour to realise
significant value for shareholders from our world-class asset base.
The JHI transaction ensured we have a near-term catalyst for
potential drilling success and demonstrated our commitment to
expanding our presence in Guyana, a proven and prolific hydrocarbon
basin. We look forward to updating the market in due course on
results from the Sapote-1 well and on timing of further drilling on
the Orinduik Block, as we increase our presence and collaboration
in the Guyana-Suriname Basin.
"With regard to the rest of our portfolio, we are excited about
the outlook for the Company's significant acreage in Namibia, as we
continue to make progress across our four licences and await the
two high-impact wells to be drilled by TotalEnergies and Shell in
Q4 this year. We remain committed to delivering exploration success
in Namibia and will update stakeholders in due course.
"We are upbeat about the Company's prospects for the rest of
2021 and are well placed to deliver long-term success into next
year. We look forward to updating all stakeholders as we move
forward."
The Company's unaudited financial results for three months ended
30 June 2021, together with Management's Discussion and Analysis
for the three months to 30 June 2021, are available to download on
the Company's website at www.ecooilandgas.com and on Sedar at
www.sedar.com .
The following are the Company's Balance Sheet, Income
Statements, Cash Flow Statement, and selected notes from the annual
Financial Statements. All amounts are in US Dollars, unless
otherwise stated.
Balance Sheet
June 30, March 31,
----------------------------------------------------
2021 2021
---------------------------------------------------- -------------------------- ------------------------
Unaudited Audited
-------------------------- ------------------------
Assets
Current assets
Cash and cash equivalents 4,354,980 11,807,309
Short-term investments 52,618 1,552,640
Government receivable 2,083 22,697
Amounts owing by license partners, net 127,226 193,655
Accounts receivable and prepaid expenses 59,632 46,480
---------------------------------------------------- -------------------------- ------------------------
4,596,539 13,622,781
Renewable energy licenses 1,395,739 1,411,186
Investment in associate 10,000,000 -
Right of use assets 328,773 332,495
Security deposit 495,391 490,455
Petroleum and natural gas licenses 1,072,260 1,072,260
---------------------------------------------------- -------------------------- ------------------------
Total Assets 17,888,702 16,929,177
---------------------------------------------------- -------------------------- ------------------------
Liabilities
Current liabilities
Accounts payable and accrued liabilities 384,241 501,022
Advances from and amounts owing to
license partners, net 36,587 97,153
Receipt on account of shares 1,940,021 -
Short-term portion of lease liability 22,987 22,987
----------------------------------------------------
Total current liabilities 2,383,836 621,162
Lease liability 329,321 325,917
----------------------------------------------------
Total liabilities 2,713,157 947,079
---------------------------------------------------- -------------------------- ------------------------
Equity
Share capital 59,099,725 59,099,725
Restricted Share Units reserve 267,669 267,669
Stock options 2,681,546 2,675,724
Foreign currency translation reserve (1,184,848) (1,198,097)
Non-controlling interest (69,681) (48,674)
Accumulated deficit (45,618,866) (44,814,249)
---------------------------------------------------- -------------------------- ------------------------
Total Equity 15,175,545 15,982,098
---------------------------------------------------- -------------------------- ------------------------
Total Liabilities and Equity 17,888,702 16,929,177
---------------------------------------------------- -------------------------- ------------------------
Income Statement
Three months ended
June 30,
-----------------------------------------------
2021 2020
---------------------- -----------------------
Unaudited
-----------------------------------------------
Revenue
Interest income 4,524 28,409
---------------------- -----------------------
4,524 28,409
Operating expenses :
Compensation costs 246,178 172,304
Professional fees 70,681 32,615
Operating costs (Note 18) 441,597 519,677
General and administrative costs (Note 19) 108,397 87,003
Share-based compensation (Note 14(i)) 5,822 12,643
Interest expense (Note 11) 3,404 -
Foreign exchange gain (loss) (45,931) 9,033
---------------------- -----------------------
Total expenses 830,148 833,275
---------------------- -----------------------
Net loss for the period (825,624) (804,866)
Foreign currency translation adjustment 13,249 36,859
Comprehensive loss for the period (812,375) (768,007)
---------------------- -----------------------
Net loss for the period attributed to:
Equity holders of the parent (804,617) (804,866)
Non-controlling interests (21,007) -
---------------------- -----------------------
(825,624) (804,866)
====================== =======================
Basic and diluted net loss per share attributable
to equity holders of the parent (0.00) (0.00)
====================== =======================
Weighted average number of ordinary shares
used in computing basic and diluted net
loss per share 184,697,723 184,697,723
====================== =======================
Cash Flow Statement
Three months ended
June 30,
------------------------------------------
2021 2020
Unaudited
------------------------------------------
Cash flow from operating activities
Net loss from operations (825,624) (804,866)
Items not affecting cash:
Share-based compensation 5,822 12,643
Depreciation and amortization 19,169 -
Accrued interest 3,404 -
Changes in non--cash working capital:
Government receivable 20,614 4,728
Accounts payable and accrued liabilities (116,781) 33,469
Accounts receivable and prepaid expenses (13,152) -
Receipt on account of shares 1,940,021 -
Advance from and amounts owing to license
partners 5,863 (13,280)
------------------------------------------------ -------------------- --------------------
1,039,336 (767,306)
------------------------------------------------ -------------------- --------------------
Cash flow from investing activities
Investment in associate (10,000,000) -
Short-term investments 1,500,022 -
------------------------------------------------ --------------------
(8,499,978) -
------------------------------------------------ -------------------- --------------------
Decrease in cash and cash equivalents (7,460,642) (767,306)
Foreign exchange differences 8,313 18,422
Cash and cash equivalents, beginning of period 11,807,309 18,667,016
------------------------------------------------ -------------------- --------------------
Cash and cash equivalents, end of period 4,354,980 17,918,132
------------------------------------------------ -------------------- --------------------
Notes to the Financial Statements
Basis of Preparation
The consolidated financial statements of the Company have been
prepared on a historical cost basis with the exception of certain
financial instruments that are measured at fair value. Historical
cost is generally based on the fair value of the consideration
given in exchange for assets.
Summary of Significant Accounting Policies
Critical accounting estimates
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognized
prospectively from the period in which the estimates are revised.
The following are the key estimate and assumption uncertainties
considered by management.
Events After the Reporting Period
a) Private Placement
On July 19, 2021, the Company closed a private placement
financing with Africa Oil Corp. and Charlestown Energy Partners LLC
issuing a total of 14,945,913 common shares and 14,945,913 share
purchase warrants exercisable for 2 years at CAD$0.47.
As a result of the financing, Africa Oil Corp.'s interest in the
Company is 19.99%.
**ENDS**
For more information, please visit www.ecooilandgas.com or
contact the following :
Eco Atlantic Oil and Gas c/o Celicourt +44 (0) 20
8434 2754
Gil Holzman, CEO
Colin Kinley, COO
Alice Carroll, Head of Marketing and +44(0)781 729 5070 | +1 (416)
IR 318 8272
Strand Hanson Limited (Financial & Nominated
Adviser) +44 (0) 20 7409 3494
James Harris
Rory Murphy
James Bellman
Berenberg (Broker) +44 (0) 20 3207 7800
Matthew Armitt
Emily Morris
Detlir Elezi
Celicourt (PR) +44 (0) 20 8434 2754
Mark Antelme
Jimmy Lea
Ollie Mills
Hannam & Partners (Research Advisor)
Neil Passmore +44 (0) 20 7905 8500
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as it forms part of
United Kingdom domestic law by virtue of the European Union
(Withdrawal) Act 2018.
Notes to editors:
About Eco Atlantic:
Eco Atlantic is a TSX-V and AIM quoted Oil & Gas exploration
and production Company with interests in Guyana and Namibia, where
significant oil discoveries have been made.
The Group aims to deliver material value for its stakeholders
through oil exploration, appraisal and development activities in
stable emerging markets, in partnership with major oil
companies.
In Guyana, Eco Guyana holds a 15% Working Interest alongside
TOQAP Guyana B.V. ("TOQAP") a company jointly owned by
TotalEnergies E&P Guyana B.V. (60%) and Qatar Petroleum (40%)
and Operator Tullow Oil (60%) in the 1,800 km(2) Orinduik Block in
the shallow water of the prospective Suriname-Guyana basin. The
Orinduik Block is adjacent and updip to ExxonMobil Operated
Stabroek Block, on which twenty discoveries have been announced and
over 9 billion BOE recoverable resources are estimated. On 28 June
2021, Eco acquired a 6.4% interest, with the option to increase its
stake to 10%, in JHI Associates Inc. a private company which holds
a 17.5% WI in the 4,800km(2) Canje Block. The Canje Block is
operated by ExxonMobil and is held by Working Interests partners
Esso Exploration & Production Guyana Limited (35%), with
TotalEnergies E&P Guyana B.V. (35%), JHI Associates (BVI) Inc.
(17.5%) and Mid-Atlantic Oil & Gas Inc. (12.5%).
Jethro-1 was the first major oil discovery on Orinduik Block.
The Jethro-1 encountered 180.5 feet (55 meters) of net heavy oil
pay in excellent Lower Tertiary sandstone reservoirs. Joe-1 was the
second discovery on the Orinduik Block and comprised of high
quality oil-bearing sandstone reservoir, with a high porosity of
Upper Tertiary age. The Joe-1 well encountered 52 feet (16 meters)
of continuous thick sandstone.
In Namibia, the Company holds interests in four offshore
petroleum licences totalling approximately 28,593km(2) with over
2.362bboe of prospective P50 resources in the Walvis Basin. These
four licences, Cooper, Guy, Sharon, and Tamar are being explored
with industry partners with Eco Operating and maintaining an
average 60% Working Interest. Eco has been granted a drilling
permit on its Cooper Block (Operator).
Eco Atlantic is a 70% shareholder in Solear Ltd., Solear is an
independent private clean energy investment company focused on low
cost, high yield solar development projects in southern Europe.
Solear offers investors exposure to a portfolio of pre-construction
opportunities across the renewable energy value chain, from
Ready-to-Build to early-stage development.
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END
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