TIDMECO
RNS Number : 7115T
Eco (Atlantic) Oil and Gas Ltd.
26 November 2021
26 November 2021
ECO (ATLANTIC) OIL & GAS LTD.
("Eco," "Eco Atlantic," "Company," or together with its
subsidiaries, the "Group")
Unaudited Results for the six months ended 30 September 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 and six months ended
30 September 2021, alongside a corporate and operational
update.
Results Highlights:
Financials:
-- Cash and cash equivalents of US$6.22 million and no debt as of 30 September 2021.
-- Raised US$4.9m in the form of a private placement in July 2021.
-- Total assets of US$19.9 million, current liabilities of
US$626,381 and total equity of US$16.7 million as of 30 September
2021.
Operations during and post-period end:
Guyana
-- On 28 June 2021, Eco subscribed for 5,000,000 new common
shares in JHI Associates Inc. ("JHI"), which holds a 17.5% interest
in the Canje Block offshore Guyana, representing 6.4% of JHI's
share capital. Eco was also issued a warrant to subscribe for a
further 9,155,471 new common shares in JHI at an exercise price of
US$2.0 per share for a period of eighteen months, which, if
exercised in full, ceteris paribus, will provide Eco with a 10%
interest in JHI on a fully diluted basis.
-- On the Canje Block, Guyana, Eco received a detailed update
from JHI Associates Inc. on 30 October 2021 that ExxonMobil had
successfully and safely drilled the Sapote-1 well. The well
recorded hydrocarbon shows while drilling and in the logging
sequence, in a deeper interval than anticipated, but had no shows
in the upper primary objective horizon. With sidewall coring and
wireline logging complete, ExxonMobil will now work to define the
reservoir properties, including porosity and permeability, and the
cored samples will be analysed for hydrocarbons.
-- On the Orinduik Block, the JV Partners (Eco Atlantic (15%
working interest ("WI")), Tullow Guyana B.V. ("Tullow") (Operator,
60% WI) and TOQAP Guyana B.V. ("TOQAP") (25% WI)) are advancing
towards finalisation of the target selection process and updating
the drilling targets inventory. The partnership aims to establish
firm targets in the near-term and advance towards drilling.
Namibia
-- In October 2021, Eco completed drafting the four new Joint
Operating Agreements ("JOAs") for its new 2021 Petroleum Licenses
in the Walvis Basin, offshore Namibia. The Company has received all
paying partner approvals on the JOAs and Namibia's Ministry of
Mines and Energy has approved Eco Atlantic to be the Operator of
all four blocks, which total some 7,065,484 acres (28,593 km(2)
).
-- The Company continues to monitor and assess opportunities,
both technical and corporate, particularly with the upcoming
drilling activity in the region. Two high impact deepwater wells
are anticipated to spud in Namibia in Q4 2021: TotalEnergies
Venus-1 well, using the Maersk Venturer, and Shell Namibia's
Graff-1 well, using the Valaris DS-10.
Solear Ltd.
-- Solear, a wholly owned subsidiary of Eco, signed effective
October 2021 an MOU with B&S Power Holdings Co. ("B&S
Power"), an independent developer and operator of solar parks in
Europe and South America, to jointly acquire and develop Ready to
Build ("RTB") solar parks, funded exclusively by an international
EPC firm. As part of the joint venture, B&S Power will inject
their current development assets base into Solear. The companies
are now evaluating a 104MW RTB park in Greece and additional
transactions in Bulgaria, Hungary, and Spain.
Outlook:
Guyana
-- Eco remains funded for further anticipated drilling on the
Orinduik Block and continues, with its JV Partners, to assess all
opportunities available to drill at least one exploration well into
the light oil cretaceous stacked targets after the target selection
process is finalised.
-- Eco continues to firmly believe that Orinduik offers
significant upside, with the eastern section of the Block closer to
the established Liza oil trend than any other Block offshore
Guyana. The partnership is focused on the careful selection of
locations and is able to drill a number of stacked or multiple
target sections targeting light oil.
-- Guyana continues to be one of the most prolific exploration
regions in the world, with over ten billion barrels of oil
discovered in the last six 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.
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 and assess opportunities,
both technical and corporate, particularly with the upcoming
third-party drilling activity in the region. Two high impact
deepwater wells are anticipated to spud in southern Namibia in Q4
2021: TotalEnergies Venus-1 well, using the Maersk Venturer, and
Shell Namibia's Graff-1 well, using the Valaris DS-10.
Solear Ltd.
-- Solear, a wholly owned subsidiary of Eco, is an independent
renewable energy company focused on solar development projects in
southern Europe.
-- Following the acquisition of the Kozani Project in January
2021, Solear continues to pursue, at low cost, the assessment of
additional projects, developing in-country relationships and
seeking high turnover, early-stage opportunities.
Corporate:
-- Eco continues to evaluate additional asset and corporate
opportunities in both West Africa and South America with its
strategic partner and substantial shareholder Africa Oil Corp. -
with a focus on near-term high-impact exploration
opportunities.
-- 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:
"We are pleased to report on another active period for the
Company, where we have worked hard to offer a string of exploration
and corporate catalysts, to create value for shareholders, and
simultaneously maintain our balance sheet strength in anticipation
of a busy 2022.
"We are extremely upbeat about our operational outlook for 2022;
in the near-term, we look forward to updating the market on
technical results of the Sapote-1 well and updated drilling plans
on the Canje Block, and we are confident that our investment in JHI
will generate considerable opportunity and value going forward. On
our Orinduik block we are close to finalising the drilling targets
selection process and continue to see substantial prospectivity in
the light oil cretaceous section on the Block.
"Elsewhere across our portfolio, we see the current third-party
exploration programmes in Namibia as potential catalysts for wider
regional success. The near-term will be exciting, with
TotalEnergies Venus-1 and Shell's Graff-1 wells and in Guyana, with
ExxonMobil's Fangtooth-1 well, just north and down dip of Orinduik
on the Stabroek Block testing some of the deeper sections.
"It is also encouraging to see the progress that Eco's renewable
energy arm, Solear, is making with a number of strategic
partnerships, including potential monetisation of assets and
further acquisitions together with its JV partners.
"Lastly, with increasing oil prices and with active M&A
activity in the industry, we continue to review various
opportunities with a view to broadening our asset inventory.
"We look forward to updating shareholders on our various
workstreams across our world-class asset base, as well as other
corporate activities through which we're confident will deliver
long-term value."
The Company's unaudited financial results for three and six
months ended 30 September 2021, together with Management's
Discussion and Analysis for the three and six months to 30
September 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
September 30, March 31,
----------------------------------------------------
2021 2021
---------------------------------------------------- -------------------------- ---------------------
Unaudited Audited
-------------------------- ---------------------
Assets
Current assets
Cash and cash equivalents 6,221,320 11,807,309
Short-term investments 52,618 1,552,640
Government receivable 13,945 22,697
Amounts owing by license partners, net 343,568 193,655
Accounts receivable and prepaid expenses 54,210 46,480
---------------------------------------------------- -------------------------- ---------------------
6,685,661 13,622,781
Investment in associate 10,000,000 -
Petroleum and natural gas licenses 1,072,260 1,072,260
Renewable energy licenses 1,380,290 1,411,186
Right of use assets 325,267 332,495
Security deposit 482,891 490,455
---------------------------------------------------- -------------------------- ---------------------
Total Assets 19,946,369 16,929,177
---------------------------------------------------- -------------------------- ---------------------
Liabilities
Current liabilities
Accounts payable and accrued liabilities 603,394 501,022
Advances from and amounts owing to license
partners, net - 97,153
Short-term portion of lease liability 22,987 22,987
----------------------------------------------------
Total current liabilities 626,381 621,162
Warrant liability 2,284,339 -
Lease liability 332,687 325,917
----------------------------------------------------
Total liabilities 3,243,407 947,079
---------------------------------------------------- -------------------------- ---------------------
Equity
Share capital 61,070,124 59,099,725
Restricted Share Units reserve 267,669 267,669
Stock options 2,660,684 2,675,724
Foreign currency translation reserve (1,206,332) (1,198,097)
Non-controlling interest - (48,674)
Accumulated deficit (46,089,183) (44,814,249)
---------------------------------------------------- -------------------------- ---------------------
Total Equity 16,702,962 15,982,098
---------------------------------------------------- -------------------------- ---------------------
Total Liabilities and Equity 19,946,369 16,929,177
---------------------------------------------------- -------------------------- ---------------------
Income Statement
Three months ended Six months ended
September 30, September 30,
---------------------------------------------- ----------------------------------------------
2021 2020 2021 2020
---------------------- ---------------------- ---------------------- ----------------------
Unaudited Unaudited
---------------------------------------------- ----------------------------------------------
Revenue
Interest income 3,911 7,247 8,435 35,656
---------------------- ---------------------- ---------------------- ----------------------
3,911 7,247 8,435 35,656
Operating expenses :
Compensation
costs 338,089 141,322 584,267 313,626
Professional fees 352,342 87,799 423,023 120,414
Operating costs 38,195 330,738 479,792 850,415
General and
administrative
costs 200,960 142,267 309,357 229,270
Share-based
compensation 5,888 42,177 11,710 54,820
Interest expense 7,109 - 10,513 -
Fair value change
in warrant
liability (637,189) - (637,189) -
Foreign exchange
gain (loss) 99,153 (45,298) 53,222 (36,265)
---------------------- ----------------------
Total operating expenses 404,547 699,005 1,234,695 1,532,280
---------------------- ---------------------- ---------------------- ----------------------
Net loss for the period (400,636) (691,758) (1,226,260) (1,496,624)
Foreign currency
translation
adjustment (21,484) (124,801) (8,235) (87,942)
Comprehensive loss for the
period (422,120) (816,559) (1,234,495) (1,584,566)
---------------------- ---------------------- ---------------------- ----------------------
Net loss for the period
attributed to:
Equity holders of
the parent (421,643) (691,758) (1,226,260) (1,496,624)
Non-controlling 21,007 - - -
interests
---------------------- ---------------------- ---------------------- ----------------------
(400,636) (691,758) (1,226,260) (1,496,624)
====================== ====================== ====================== ======================
Basic and diluted net
loss per share
attributable to equity
holders of
the parent (0.00) (0.00) (0.01) (0.01)
====================== ====================== ====================== ======================
Weighted average number
of ordinary
shares used in computing
basic and
diluted net loss per
share 198,403,885 184,697,723 191,550,804 184,697,723
====================== ====================== ====================== ======================
Cash Flow Statement
Six months ended
September 30,
--------------------------------------------
2021 2020
Unaudited
--------------------------------------------
Cash flow from operating activities
Net loss from operations (1,226,260) (1,496,624)
Items not affecting cash:
Share-based compensation 11,710 54,820
Depreciation and amortization 38,124 -
Accrued interest 6,770 -
Revaluation of warrant liability (637,189) -
Changes in non--cash working capital:
Government receivable 8,752 535
Accounts payable and accrued liabilities 102,372 (219,050)
Accounts receivable and prepaid expenses (7,730) (88,992)
Advance from and amounts owing to license
partners (247,066) 339,469
------------------------------------------------ ---------------------- --------------------
(1,950,517) (1,409,842)
------------------------------------------------ ---------------------- --------------------
Cash flow from investing activities
Investment in associate (10,000,000) -
Short-term investments 1,500,022 -
------------------------------------------------ --------------------
(8,499,978) -
------------------------------------------------ ---------------------- --------------------
Cash flow from financing activities
Issuance of shares 4,793,789 -
Exercise of stock options 71,388 -
4,865,177 -
------------------------------------------------ ---------------------- --------------------
Decrease in cash and cash equivalents (5,585,318) (1,409,842)
Foreign exchange differences (671) (64,178)
Cash and cash equivalents, beginning of period 11,807,309 18,667,016
------------------------------------------------ ---------------------- --------------------
Cash and cash equivalents, end of period 6,221,320 17,192,996
------------------------------------------------ ---------------------- --------------------
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.
**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 10 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 operated 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 100% 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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