REG - Eco (Atlantic) O&G - Results for the six months ended 30 September 2022
29/11/2022 07:00
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RNS Number : 8494H Eco (Atlantic) Oil and Gas Ltd. 29 November 2022
29 November 2022
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 2022
Corporate and Operational Update
Eco (Atlantic) Oil & Gas Ltd. (AIM: ECO, TSX ‐ V: EOG), the oil and
gas exploration company focused on the offshore Atlantic Margins, is pleased
to announce its results for the six months ended 30 September 2022 and to
provide a corporate and operational update.
Highlights:
Financials (as at 30 September 2022)
· The Company had cash and cash equivalents of US$24.6 million and no
debt (after paying US$11.3 million, being Eco's cash share of the Block 2B
well) as of September 30, 2022.
· The Company had total assets of US$67.3 million, total liabilities of
US$5.7 million and total equity of US$61.6 million.
· As of November 27, 2022, the Company is expected to have
approximately US$17.5 million cash and cash equivalents at the end of November
2022, following receipt of the initial proceeds from the sale of the Kozani
project in the coming days referred to below.
Corporate:
· On November 28, 2022, the Company closed the sale of its 100%
interest in the Kozani Photovoltaic Development Project for total cash
proceeds of €2.3 million (US$2.4 million). US$2 million is to be received
by the Company by close of business on November 30, 2022, and the outstanding
balance is expected to be received by year end 2022.
· After 12 years with the Company, Eco's Non-executive Chairman, Moshe
'Peter' Peterburg has informed the Board of his plans to retire, as such, he
will not stand for re-election at the upcoming Annual General Meeting on
December 29, 2022, and will step down from the Company with immediate effect.
The Company has commenced the process to find a replacement and, in the
interim, Peter Nicol, currently a Non-executive Director, will assume the role
of interim Non-executive Chairman. Further announcements will be made as
appropriate.
· With regard to the closing of the acquisition of Azinam Group Limited
("Azinam"), and in accordance with the previously announced Share Purchase
Agreement, the Company will shortly issue the balance of 1,625,000 Common
Shares ("Azinam Shares") to the previous shareholders of Azinam representing
the full and final number of Common Shares to be issued in respect of this
transaction. These Common Shares are subject to a restrictive hold period of
four months and one day (beginning on the date of issuance). The issuance of
Common Shares is subject to approval from the TSX Venture Exchange and a
further announcement will be made once such approval has been received and the
Common Shares issued.
Operations:
South Africa
Block 2B (post period end)
· In early October 2022, the Island Innovator Semi-Submersible Drilling
Rig arrived on Block 2B, offshore South Africa, and operations on the
Gazania-1 Exploration Well commenced.
· The well was spudded on October 10, 2022, and reached target depth of
2,360m. However, evidence of commercial hydrocarbons was not found, and the
well has been plugged and abandoned.
· The JV Partners submitted a Production Right Application to the
Petroleum Agency of South Africa ("PASA") on November 15, 2022, for Block 2B,
based on the existing oil discovery of AJ-1 and potential future operations.
Well logging has been completed and the JV Partners now have time to conduct
further analysis and integrate the well data to allow them to determine the
next steps on the Block.
Block 3B/4B
· The Company and its JV partners are progressing plans to conduct a
two-well campaign on Block 3B/4B offshore South Africa.
· As previously announced by the Operator of Block 3B/4B,
a collaborative farm-out process (up to 55% gross WI), has been ongoing, and
is now in a farm-out agreement negotiation stage. The JV partners will update
the market as appropriate and should a farm-out agreement be concluded.
Namibia
· Following recent significant hydrocarbon discoveries offshore
Namibia, Eco continues to assess options for progressing exploration and
commercial activity on its acreage.
· Eco is witnessing considerable interest in its licences in Namibia
and is currently assessing options, including a potential farm-out.
Guyana
· As previously announced, Eco and its JV partners on the Orinduik
Block, offshore Guyana, are currently drawing up plans to drill at least one
well into light oil Cretaceous targets in the next Petroleum Agreement
exploration phase which begins in 2023. Further updates will be made on this
matter in due course.
Gil Holzman, President and Chief Executive Officer of Eco Atlantic,
commented:
"Our main focus during the period, and through to recent weeks, was to execute
a safe and environmentally friendly drilling campaign on the Gazania-1
exploration well, offshore South Africa. Although it was disappointing to not
announce a commercial discovery, we can be proud of how we conducted our
operations, which led to the well being drilled safely and on-time. We are now
working with our JV partners on the licence to analyse the well data found and
plan our next steps on the Block, which we believe contains significant
untapped potential.
On Block 3B/4B, offshore South Africa, we are making steady progress towards
conducting a two well drilling campaign on the licence. The drilling
preparations and program are expected to commence in 2023 and, as previously
announced, a potential farm-out process is also underway on the licence. We
look forward to updating the market on both of these workstreams as
appropriate.
In Guyana, we remain highly optimistic about the potential contained within
the Orinduik Block, and we are working with our JV partners to drill another
well as quickly as possible. Guyana remains one of the most exciting
exploration hotspots, alongside Orange Basin SA and Namibia, where we also
hold a highly strategic acreage position, and we are working hard to deliver
value for all our stakeholders across our asset portfolio in the near to
medium term.
Finally, on behalf of the Board I would like to thank Moshe Peterburg for his
tireless efforts during his tenure as Eco's Chairman for the past 12 years and
since inception of the Company. He played a pivotal role in the development
and success of the Company to date and we wish him all the best for a happy
retirement and are pleased he will remain an important shareholder of Eco."
The Company's unaudited financial results for the three months ended 30
September 2022, together with Management's Discussion and Analysis as at 30
September 2022, 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,
2022 2022
(Unaudited) (Audited)
Assets
Current Assets
Cash and cash equivalents 24,590,082 3,438,834
Short-term investments 52,618 52,618
Government receivable 32,656 27,487
Amounts owing by license partners, net 13,764 -
Accounts receivable and prepaid expenses 2,206,208 257,911
Assets held for sale 2,052,326 2,061,734
Total Current Assets 28,947,654 5,838,584
Non- Current Assets
Investment in associate 9,092,557 9,277,162
Petroleum and natural gas licenses 29,253,034 30,753,034
Total Non-Current Assets 38,345,591 40,030,196
Total Assets 67,293,245 45,868,780
Liabilities
Current Liabilities
Accounts payable and accrued liabilities 3,361,588 1,931,823
Advances from and amounts owing to license partners, net 67,406 -
Current liabilities related to assets held for sale 882,959 473,254
Warrant liability 1,395,066 3,241,762
Total Current Liabilities 5,707,019 5,646,839
Total Liabilities 5,707,019 5,646,839
Equity
Share capital 113,930,574 63,141,609
Shares to be issued - 20,766,996
Restricted Share Units reserve 569,919 267,669
Warrants 14,778,272 7,806,000
Stock options 2,075,897 958,056
Foreign currency translation reserve (1,862,829) (1,309,727)
Accumulated deficit (67,905,607) (51,408,662)
Total Equity 61,586,226 40,221,941
Total Liabilities and Equity 67,293,245 45,868,780
Income Statement
Three months ended Six months ended
September 30, Sep
tem
ber
30,
2022 2021 2022 2021
Unaudited Unaudited
Revenue
Interest income 36,325 3,911 56,452 8,435
36,325 3,911 56,452 8,435
Operating expenses:
Compensation costs 210,605 206,327 479,914 410,087
Professional fees 240,894 142,540 460,579 181,499
Operating costs 11,097,960 34,953 13,041,411 417,818
General and administrative costs 350,864 200,960 608,154 309,357
Share-based compensation 750,667 5,888 1,751,886 11,710
Foreign exchange loss 690,794 99,153 975,221 53,222
Total operating expenses 13,341,784 689,821 17,317,165 1,383,693
Operating loss (13,305,459) (685,910) (17,260,713) (1,375,258)
Fair value change in warrant liability 415,712 637,189 1,846,696 637,189
Share of losses of company accounted for at equity (92,302) - (184,605) -
Net loss for the period from continuing operations (12,982,049) (48,721) (15,598,622) (738,069)
Loss from discontinued operations, after-tax (800,210) (351,915) (898,323) (488,191)
Net loss for the period (13,782,259) (400,636) (16,496,945) (1,226,260)
Foreign currency translation adjustment (441,472) (21,484) (553,102) (8,235)
Comprehensive loss for the period (14,223,731) (422,120) (17,050,047) (1,234,495)
Net loss for the period attributed to:
Equity holders of the parent (12,982,049) (421,643) (16,496,945) (1,226,260)
Non-controlling interests - 21,007 - -
(12,982,049) (400,636) (16,496,945) (1,226,260)
Basic and diluted net loss per share attributable to equity holders of the (0.038) (0.002) (0.052) (0.006)
parent
Weighted average number of ordinary shares used in computing basic and diluted 343,966,022 198,403,885 319,575,745 191,550,804
net loss per share
Cash Flow Statement
Six months ended
September 30,
2022 2021
(Unaudited) (Unaudited)
Cash flow from operating activities
Net loss from continuing operations (15,598,622) (738,069)
Net loss from discontinued operations (898,323) (488,191)
Items not affecting cash:
Share-based compensation 1,751,886 11,710
Depreciation and amortization - 38,124
Accrued interest - 6,770
Revaluation of warrant liability (1,846,696) (637,189)
Share of losses of companies accounted for at equity 184,605 -
Changes in non‑cash working capital:
Government receivable (5,169) 8,752
Accounts payable and accrued liabilities 1,601,059 102,372
Accounts receivable and prepaid expenses (948,297) (7,730)
Reallocation to discontinued operations cashflows (171,294) -
Net change in non-cash working capital items relating to discontinued 419,113 -
operations
Advance from and amounts owing to license partners 1,486,236 (247,066)
(14,025,502) (1,950,517)
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
Proceeds from private placements, net 35,662,446 -
Issuance of shares - 4,793,789
Exercise of stock options 67,406 71,388
35,729,852 4,865,177
Increase (decrease) in cash and cash equivalents 21,704,350 (5,585,318)
Foreign exchange differences (553,102) (671)
Cash and cash equivalents, beginning of period 3,438,834 11,807,309
Cash and cash equivalents, end of period 24,590,082 6,221,320
Notes to the Financial Statements
Basis of Preparation
The Condensed Interim 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.
**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 Corporate Sustainability +44(0)781 729 5070
Strand Hanson (Financial & Nominated Adviser)
+44 (0) 20 7409 3494
James Harris
James Bellman
Berenberg (Broker) +44 (0) 20 3207 7800
Matthew Armitt
Detlir Elezi
Echelon Capital (Financial Adviser N. America Markets)
Ryan Mooney +1 (403) 606 4852
Simon Akit +1 (416) 8497776
Celicourt (PR) +44 (0) 20 8434 2754
Mark Antelme
Jimmy Lea
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 (as amended).
Notes to editors:
About Eco Atlantic:
Eco Atlantic is a TSX-V and AIM-quoted Atlantic Margin-focused oil & gas
exploration company with offshore license interests in Guyana, Namibia, and
South Africa. Eco aims to deliver material value for its stakeholders through
its role in the energy transition to explore for low carbon intensity oil and
gas in stable emerging markets close to infrastructure.
Offshore Guyana in the proven Guyana-Suriname Basin, the Company holds a 15%
Working Interest in the 1,800 km(2) Orinduik Block Operated by Tullow Oil. In
Namibia, the Company holds Operatorship and an 85% Working Interest in four
offshore Petroleum Licences: PELs: 97, 98, 99, and 100, representing a
combined area of 28,593 km(2) in the Walvis Basin.
Offshore South Africa, Eco is Operator and holds a 50% working interest in
Block 2B and a 20% Working Interest (to be increased to a 26.25% Working
Interest, subject to Completion of the Acquisition announced 27 June 2022) in
Block 3B/4B operated by Africa Oil Corp., totalling some 20,643 km(2).
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