REG - Eco (Atlantic) O&G - Results for the six months ended 30 September 2021
26/11/2021 07:00
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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 (http://www.ecooilandgas.com) and on
Sedar at www.sedar.com (http://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 interests 21,007 - - -
(400,636) (691,758) (1,226,260) (1,496,624)
Basic and diluted net loss per share attributable to equity holders of the (0.00) (0.00) (0.01) (0.01)
parent
Weighted average number of ordinary shares used in computing basic and diluted 198,403,885 184,697,723 191,550,804 184,697,723
net loss per share
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 IR +44(0)781 729 5070 | +1 (416) 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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