REG - Eco (Atlantic) O&G - Results for the three months ended 30 June 2023

Eco (Atlantic) Oil & GasAnnouncement

30/08/2023 07:00

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RNS Number : 7232K  Eco (Atlantic) Oil and Gas Ltd.  30 August 2023

 

30 August 2023

 

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 2023

 

 

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 three months ended 30 June 2023.

 

Highlights:

 

Financials (as at 30 June 2023)

 

·    The Company had cash and cash equivalents of US$2.4 million and no
debt.

·    Eco has cash and cash equivalents of US$4.7 million as at 30 August
2023.

·    The Company had total assets of US$53.31 million, total liabilities
of US$3.56 million and total equity of US$49.75 million.

 

Operations:

 

Guyana

 

·    Post Period end, on 10 August 2023, the Company signed a Sale
Purchase Agreement for its wholly owned subsidiary, Eco Guyana Oil and Gas
(Barbados) Limited to acquire a 60% Operated Interest in Orinduik Block,
offshore Guyana, through the acquisition of Tullow Guyana B.V., a wholly owned
subsidiary of Tullow Oil Plc. in exchange for a combination of upfront cash
and contingent consideration.

·    Eco, via its wholly owned subsidiary Eco (Atlantic) Guyana Inc,
currently holds a 15% working interest in the Orinduik Block. On completion of
the Transaction, which is subject to certain market-standard conditions
precedent, including customary Government and JV partner approvals, Eco, as
operator and majority interest holder in the Orinduik Block, intends to drive
the exploration process and focus on its strategy to attract new partners to
join the license and proactively engage in drilling.

 

South Africa

 

Block 3B/4B

 

·    Post period end, on 17 July 2023, the Company issued 1,200,000 shares
to the Lunn Family Trust in place of the US$500,000 cash consideration due in
respect of the acquisition of the 6.25% interest in Block3B/4B from the Lunn
Family Trust as previously announced on 27 June 2022.

·    On 11 July 2023, the Company signed a legally binding Letter of
Intent with Africa Oil to farm out a 6.25% Participating Interest in Block
3B/4B, offshore South Africa for up to US$10.5 million in cash. On 14 August
2023, the parties signed the final Assignment and Transfer agreement.
Additional US$2.5m cash consideration is expected to be received upon
Government of SA approval of the transfer, with the initial consideration of
US$2.5m already having been received.

·    In March 2023, Africa Oil released a New Competent Person's Resource
Report confirming that the Block contains an estimated P50 Prospective
Resources of approximately four billion barrels of oil equivalent ("BOE"), one
Billion BOE net to Eco Atlantic prior to the sale of the aforementioned
Participating Interest which is expected to complete shortly.

·    The JV partners continue to progress plans to conduct a two-well
campaign on the Block in conjunction with progressing the collaborative farm
out process, up to 55% gross working interest, with various potential parties.

 

Block 2B

·    On 15 November 2022, a Production Right Application to the Petroleum
Agency of South Africa, for Block 2B, based on the existing oil discovery of
AJ-1 and potential future operations was submitted by the JV Partners.

·    Eco continues to believe that Block 2B contains considerable
hydrocarbon resources and looks forward to providing further updates as the
Company looks to deliver value from the licence for all stakeholders.

 

Namibia

 

·    Following the significant drilling success in the area, Eco continues
to receive third party interest in its strategic acreage position offshore
Namibia.

·    The Company continues to assess farm out opportunities with its four
licences in the region as it considers options for progressing exploration and
commercial activity on its acreage.

 

 

Gil Holzman, President and Chief Executive Officer of Eco Atlantic,
commented:

 

"Our Q1 results serve as an important opportunity to remind investors of the
strategic work which is happening across all areas of the portfolio.
Recently announced deals in both South Africa and Guyana are examples of the
team's efforts to position the portfolio to continue creating high-impact
catalysts for investors.  I am excited for the future and look forward to
progressing our work programmes across our entire Atlantic Margin portfolio.

 

 

The Company's unaudited financial results and Management's Discussion and
Analysis for the three months ended 30 June 2023 are available for 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

                                                            June 30,                                                   March 31,
                                                           2023                                                  2023
 Assets
 Current Assets
 Cash and cash equivalents                                            2,445,863                                               4,110,734
 Short-term investments                                                    13,107                                                  13,107
 Government receivable                                                     25,971                                                  22,494
 Amounts owing by license partners, net                                            -                                             477,578
 Accounts receivable and prepaid expenses                             1,530,734                                               1,529,451
 Total Current Assets                                                 4,015,675                                               6,153,364

 Non- Current Assets
 Investment in associate                                              8,446,043                                               8,612,267
 Petroleum and natural gas licenses                                 40,852,020                                              40,852,020
 Total Non-Current Assets                                           49,298,063                                              49,464,287
 Total Assets                                                       53,313,738                                              55,617,651

 Liabilities
 Current Liabilities
 Accounts payable and accrued liabilities                             3,371,460                                               4,416,789
 Advances from and amounts owing to license partners, net                191,252                                                 286,553
 Warrant liability                                                                 -                                             261,720
 Total Current Liabilities                                            3,562,712                                               4,965,062

 Total Liabilities                                                    3,562,712                                               4,965,062

 Equity
 Share capital                                                    121,570,983                                             121,570,983
 Restricted Share Units reserve                                          920,653                                                 920,653
 Warrants                                                           14,778,272                                              14,778,272
 Stock options                                                        2,916,318                                               2,804,806
 Foreign currency translation reserve                               (1,754,385)                                             (1,458,709)
 Accumulated deficit                                              (88,680,815)                                            (87,963,416)

 Total Equity                                                       49,751,026                                              50,652,589

 Total Liabilities and Equity                                       53,313,738                                              55,617,651

 

 

 

Income Statement

 

 

                                                                                 Three months ended
                                                                                                                                                    Jun
                                                                                                                                                    e
                                                                                                                                                    30,
                                                                                 2023                                                               2022
 Revenue
 Interest income                                                                                     1,665                                                           20,127
                                                                                                     1,665                                                           20,127
 Operating expenses:
 Compensation costs                                                                              184,442                                                           269,309
 Professional fees                                                                                 96,003                                                          219,685
 Operating costs, net                                                                            350,180                                                        1,943,451
 General and administrative costs                                                                112,473                                                           257,290
 Share-based compensation                                                                        111,512                                                        1,001,219
 Foreign exchange loss (gain)                                                                     (40,050)                                                         284,427
 Total operating expenses                                                                        814,560                                                        3,975,381

 Operating loss                                                                                 (812,895)                                                      (3,955,254)

 Fair value change in warrant liability                                                          261,720                                                        1,430,984
 Share of losses of company accounted for at equity                                             (166,224)                                                           (92,303)
 Net loss for the period from continuing operations                                             (717,399)                                                      (2,616,573)
 Loss from discontinued operations, after-tax                                                              -                                                        (98,113)
 Net loss for the period                                                                        (717,399)                                                  (2,714,686)

 Foreign currency translation adjustment                                                        (295,676)                                                      (111,630)
                                                                                             (1,013,075)                                                    (2,826,316)

 Comprehensive loss for the period

 Basic and diluted net loss per share:
 from continuing operations                                                                         (0.002)                                                           (0.009)
 from discontinued operations                                                                       (0.000)                                                           (0.000)
 Weighted average number of ordinary shares used in computing basic and diluted           367,348,680                                                       293,654,835
 net loss per share

 

 

 

Cash Flow Statement

 

                                                                Three months ended
                                                                June 30,
                                                                2023                                                 2022
 Cash flow from operating activities - continued operations
 Net loss from continuing operations                             $   (717,399)                                        $    (2,616,573)
 Items not affecting cash:
 Share-based compensation                                       111,512                                                        1,001,219
 Revaluation of warrant liability                                       (261,720)                                             (1,430,984)
 Share of losses of companies accounted for at equity           166,224                                                             92,303
 Changes in non‑cash working capital:
 Government receivable                                                      (3,477)                                                (25,774)
 Accounts payable and accrued liabilities                       (1,045,329)                                          1,681,064
 Accounts receivable and prepaid expenses                       (1,283)                                                             28,162
 Reallocation to discontinued operations cashflows                                 -                                             (171,294)
 Advance from and amounts owing to license partners                      382,277                                               1,175,612
 Cash flow from operating activities - continued operations     (1,369,195)                                          (266,265)

 Cash flow from operating activities - discontinued operations                     -                                              104,919

 Cash flow from financing activities
  Proceeds from private placements, net                                            -                                         35,587,837
 Cash flow from financing activities                            -                                                    35,587,837

 Increase (decrease) in cash and cash equivalents               (1,369,195)                                          35,426,491
 Foreign exchange differences                                   (295,676)                                            (111,630)
 Cash and cash equivalents, beginning of period                 4,110,734                                            3,438,834

 Cash and cash equivalents, end of period                        $   2,445,863                                        $     38,753,695

 

 

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 Corporate Sustainability             +44(0)781 729 5070

 Strand Hanson Limited (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 7770 6424
 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 km2 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 km2 in the Walvis Basin.

 

Offshore South Africa, Eco is Operator and holds a 50% working interest in
Block 2B and a 26.25% Working Interest in Block 3B/4B operated by Africa Oil
Corp., totalling some 20,643km2.

 

Cautionary Notes:

 

This news release contains certain "forward-looking statements", including,
without limitation, statements containing the words "will", "may", "expects",
"intends", "anticipates" and other similar expressions which constitute
"forward-looking information" within the meaning of applicable securities
laws. Forward-looking statements reflect the Company's current expectations,
assumptions, and beliefs, and are subject to a number of risks and
uncertainties that could cause actual results to differ materially from those
anticipated. These forward-looking statements are qualified in their entirety
by the inherent risks and uncertainties surrounding future expectations.

 

Important factors that could cause actual results to differ materially from
expectations include, but are not limited to, general economic and market
factors, competition, the effect of the global pandemic and consequent
economic disruption, and the factors detailed in the Company's ongoing filings
with the securities regulatory authorities, available at www.sedar.com
(http://www.sedar.com) . Although forward-looking statements contained herein
are based on what management considers to be reasonable assumptions based on
currently available information, there can be no assurance that actual events,
performance or results will be consistent with these forward-looking
statements, and our assumptions may prove to be incorrect. Readers are
cautioned not to place undue reliance on these forward-looking statements. The
Company undertakes no obligation to publicly update or revise any
forward-looking statements either as a result of new information, future
events or otherwise, except as required by applicable laws.

 

 

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