REG - Eco (Atlantic) O&G - Results for three & six months ended 30 Sept 2023
30/11/2023 07:15
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RNS Number : 1964V Eco (Atlantic) Oil and Gas Ltd. 30 November 2023
30 November 2023
ECO (ATLANTIC) OIL & GAS LTD.
("Eco," "Eco Atlantic," "Company," or together with its subsidiaries, the
"Group")
Unaudited Results for the three and six month periods ended 30 September 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 and six month periods ended 30 September
2023.
Highlights:
Financials (as at 30 September 2023)
· The Company had cash and cash equivalents of US$3.85 million and no
debt.
· The Company had total assets of US$51.0 million, total liabilities of
US$1.71 million and total equity of US$49.30 million.
Operations:
Guyana
· 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 (the "Transaction").
Post-period end:
· On 15 November 2023, Eco announced that the Company had received
Government approval for the transfer of 60% Working Interest and Operatorship
in the offshore Orinduik Block in Guyana from the Minister of Natural
Resources, Cooperative Republic of Guyana.
· On 21 November 2023, the Company announced completion of the
Transaction, upon which Eco became the designated Operator of the Orinduik
Block and increase its aggregate Participating Interest to 75%, held via Eco
Orinduik B.V. (60%) and Eco (Atlantic) Guyana Inc (15%). TOQAP Guyana B.V
continues to hold a Participating Interest of 25%.
· A formal farm-out process for the Orinduik Block has commenced and
the Company expects to provide further updates in due course.
South Africa
Block 3B/4B
· 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.
· Government of SA approval and therefore the $2.5m cash payment from
Africa Oil are expected to be received by year end 2023.
· The JV partners continue to progress a farm-out, in conjunction with
preparations for a two well drilling campaign on the Block. Further updates
will be made as appropriate.
Block 2B
· Eco has applied for a Production Right Application to the Petroleum
Agency of South Africa, for Block 2B, and continues to assess opportunities
available to deliver value from this licence for the benefit of stakeholders.
Namibia
· Following media reports that significant multi-well drilling
campaigns are about to be undertaken offshore Namibia, 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.
Board Changes:
· Post period end, on October 9, 2023, the Company announced the
appointment of Miss Alice Carroll and Miss Selma Usiku as executive and
non-executive directors respectively of the Company with immediate effect,
with Helmut Angula retiring from the Board.
Gil Holzman, President and Chief Executive Officer of Eco Atlantic,
commented:
"We have made progress on all fronts across our exploration portfolio in 2023.
The most notable development was the acquisition of a 60% Working Interest in
the Orinduik Block, offshore Guyana, from a subsidiary of Tullow Oil Plc. This
transaction made Eco the Operator of the licence and brings our total stake in
the Block to 75%. We have already commenced with a farm-out process and opened
a data room, receiving early interest from a number of multi-national oil and
gas companies.
"Also, offshore South Africa, we continue to progress plans for a two-well
campaign on Block 3B/4B in parallel to continuing farm-out discussions with
various large industry partners. In Namibia, we continue to receive incoming
interest with regard to our highly strategic acreage position, which has
increased following recent media reports of multi-well drilling campaigns
being lined up.
"In closing, the last two quarters of 2023 have been a highly active period
for us, and we look forward to sharing further updates on the ongoing farm out
workstreams and drilling plans with our stakeholders as and when we are in a
position to do so."
The Company's unaudited financial results and Management's Discussion and
Analysis for the three and six months ended 30 September 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
September 30, March 31,
2023 2023
Assets
Current Assets
Cash and cash equivalents 3,850,448 4,110,734
Short-term investments 13,107 13,107
Government receivable 30,550 22,494
Amounts owing by license partners, net - 477,578
Accounts receivable and prepaid expenses 164,142 1,529,451
Total Current Assets 4,058,247 6,153,364
Non- Current Assets
Investment in associate 8,279,820 8,612,267
Petroleum and natural gas licenses 38,668,895 40,852,020
Total Non-Current Assets 46,948,715 49,464,287
Total Assets 51,006,962 55,617,651
Liabilities
Current Liabilities
Accounts payable and accrued liabilities 1,410,571 4,416,789
Advances from and amounts owing to license partners, net 298,775 286,553
Warrant liability - 261,720
Total Current Liabilities 1,709,346 4,965,062
Total Liabilities 1,709,346 4,965,062
Equity
Share capital 122,088,498 121,570,983
Restricted Share Units reserve 920,653 920,653
Warrants 14,778,272 14,778,272
Stock options 2,900,501 2,804,806
Foreign currency translation reserve (1,744,484) (1,458,709)
Accumulated deficit (89,645,824) (87,963,416)
Total Equity 49,297,616 50,652,589
Total Liabilities and Equity 51,006,962 55,617,651
Income Statement
Three months ended Six months ended
September 30, Sep
tem
ber
30,
2023 2022 2023 2022
Revenue
Interest income 21 36,325 1,686 56,452
21 36,325 1,686 56,452
Operating expenses:
Compensation costs 236,556 210,605 420,998 479,914
Professional fees 202,557 240,894 298,560 460,579
Operating costs, net 411,201 11,097,960 761,381 13,041,411
General and administrative costs 160,569 350,864 273,042 608,154
Share-based compensation (15,817) 750,667 95,695 1,751,886
Foreign exchange loss 139,795 690,794 99,745 975,221
Total operating expenses 1,134,861 13,341,784 1,949,421 17,317,165
Operating loss (1,134,840) (13,305,459) (1,947,735) (17,260,713)
Gain on settlement of liability (200,640) - (200,640) -
Fair value change in warrant liability - 415,712 261,720 1,846,696
Share of losses of company accounted for at equity (166,223) (92,302) (332,447) (184,605)
Net loss for the period from continuing operations, before taxes (1,501,703) (12,982,049) (2,219,102) (15,598,622)
Tax recovery 536,694 - 536,694 -
Net loss for the period from continuing operations. After taxes (965,009) (12,982,049) (1,682,408) (15,598,622)
Loss from discontinued operations, after-tax - (800,210) - (898,323)
Net loss for the period (965,009) (13,782,259) (1,682,408) (16,496,945)
Foreign currency translation adjustment 9,901 (441,472) (285,775) (553,102)
Comprehensive loss for the period (955,108) (14,223,731) (1,968,183) (17,050,047)
Basic and diluted net loss per share:
from continuing operations (0.004) (0.038) (0.006) (0.049)
from discontinued operations (0.000) (0.002) (0.000) (0.003)
Weighted average number of ordinary shares used in computing basic and diluted 369,421,234 343,966,022 368,390,620 319,575,745
net loss per share
Cash Flow Statement
Six months ended
September 30,
2023 2022
Cash flow from operating activities - continued operations
Net loss from continuing operations (1,682,408) (15,598,622)
Items not affecting cash:
Share-based compensation 95,695 1,751,886
Revaluation of warrant liability (261,720) (1,846,696)
Share of losses of companies accounted for at equity 332,447 184,605
Changes in non‑cash working capital:
Government receivable (8,056) (5,169)
Accounts payable and accrued liabilities (2,805,578) 1,601,059
Accounts receivable and prepaid expenses 1,365,309 (948,297)
Reallocation to discontinued operations cashflows - 419,113
Advance from and amounts owing to license partners 489,800 1,486,236
Cash flow from operating activities - continued operations (2,474,511) (12,955,885)
Cash flow from operating activities - discontinued operations - (1,069,617)
Cash flow from investing activities
Proceeds from Block 3B/4B farmout 2,500,000 -
Cash flow from investing activities - continued operations 2,500,000 -
Cash flow from financing activities
Proceeds from private placements, net - 35,662,446
Exercise of stock options - 67,406
Cash flow from financing activities - 35,729,852
Increase in cash and cash equivalents 25,489 21,704,350
Foreign exchange differences (285,775) (553,102)
Cash and cash equivalents, beginning of period 4,110,734 3,438,834
Cash and cash equivalents, end of period 3,850,448 24,590,082
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, Executive Director +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
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 is Operator
and holds a 75% Working Interest in the 1,800 km(2) Orinduik Block. 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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