REG - Eco (Atlantic) O&G - Successful US$12.3 million Equity Fundraise

Eco (Atlantic) Oil & GasAnnouncement

27/06/2022 07:16

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RNS Number : 2574Q  Eco (Atlantic) Oil and Gas Ltd.  27 June 2022

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, JAPAN OR THE
REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE,
PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE THE UK
VERSION OF THE MARKET ABUSE REGULATION (EU NO. 596/2014) AS IT FORMS PART OF
UK LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (AS AMENDED FROM
TIME TO TIME) ("UK MAR"). UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A
REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS NOW CONSIDERED TO
BE IN THE PUBLIC DOMAIN.

 

27 June 2022

ECO (ATLANTIC) OIL & GAS LTD.

("Eco Atlantic", "Company", "Eco" or, together with its subsidiaries, the
"Group")

 

Successful US$12.3 million Equity Fundraise

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 the successful completion of an equity fundraise of US$12.3 million
(subject to TSX Venture Exchange approval) (the "Equity Fundraise").

 

A total of 33,406,531 new common shares in the capital of the Company ("Common
Shares") and 33,406,531 warrants to subscribe for Common Shares have been
conditionally placed with, or subscribed for by new and existing institutional
investors (including from South African focused investors), at a price of 30p
(CAD0.48) per Placing Unit or Subscription Unit (as applicable and defined
below) (the "Issue Price"). Each 30p unit comprises one new Common Share and
one warrant to purchase one new Common Share at a price of US$0.40625 (33p;
CAD0.5215) for a period of three years. On settlement, the Equity Fundraise
will raise gross proceeds of US$12.3 million for the Company, consisting of:

·    a placing of 27,500,000 new Common Shares (the "Placing Shares") and
warrants to subscribe for new Common Shares (on the basis of one warrant for
every one Placing Share (the "Placing Warrants" and, together with the Placing
Shares, the "Placing Units")), at the Issue Price, raising gross proceeds of
£8.25 million (US$10.1 million) (the "Placing"); and

·    a subscription of 5,906,531 new Common Shares (the "Subscription
Shares") and warrants to subscribe for new Common Shares (on the basis of one
warrant for every one Subscription Share (the "Subscription Warrants" and,
together with the Placing Shares, the "Subscription Units")), at the Issue
Price, raising gross proceeds of approximately US$2.2 million (£1.8 million)
(the "Subscription").

In aggregate, the Placing Shares and Subscription Shares represent 10.8% of
the currently issued share capital of the Company and 9.8% of the Company's
issued share capital as enlarged by the Equity Fundraise (both percentages
stated prior to the issue of new Common Shares pursuant to the acquisition
announced earlier today).

In connection with this Placing, Fox-Davies Capital Limited and Fox-Davies
Capital (DIFC) Limited (together "Fox Davies") acted as the sole placement
agent.

The Placing Shares and Subscription Shares will, when issued, be credited as
fully paid and will rank pari passu in all respects with the existing Common
Shares of the Company, including, without limitation, the right to receive all
dividends and other distributions declared, made or paid after the date of
issue.

Gil Holzman, Co-Founder and CEO of Eco Atlantic, commented:

"We are pleased to be able to close this successful private placing. We are
fortunate to be able to include some of the leading South African focussed
funds in this financing, thus supporting the regional efforts to become energy
independent and to promote the local partners and oil and gas exploration
efforts in South Africa. The funds we are raising will be applied to our
ongoing operations and will enable us to settle the cash consideration for the
increased interest in Block 3B/4B announced earlier today, allowing us to
retain our current cash resources to drill Gazania-1 well in Block 2B in South
Africa in September. In addition, the proceeds will also be used to expedite
exploration activities on Block 3B/4B and prepare for potential wells next
year in Guyana and South Africa. The proceeds of this fund raise strengthen
the Group's cash resources following termination of the transaction with JHI
and its cash component.

 

As always, we are thankful to Africa Oil, which is participating in this round
with an investment of US$1.8m. With over U$38m now in treasury, we are in a
very strong financial position to fund all our current planned exploration
needs in both South Africa, Namibia and Guyana including the drilling of the
Gazania-1 well in September and additional near-term wells on Guyana Orinduik
Block and in Block 3B/4B."

 

Details of the Placing

The Placing and Subscription are conditional upon, inter alia, the placing
agreement and subscription agreement, respectively, not being terminated in
accordance with its terms.

Fox-Davies and the Company have today entered into an agreement with the
Company in relation to the Placing (the "Placing Agreement").

The Placing is conditional on certain customary conditions taking place prior
to certain dates including Admission by 30 June 2022 or such later date as is
agreed but in any event not later than 8.00 a.m. in London, United
Kingdom on 14 July 2022.

The Placing Agreement includes customary warranties and indemnities given by
the Company in favour of Fox Davies. Fox-Davies are entitled at any time
before Admission, to terminate the Placing Agreement in accordance with its
terms in certain customary circumstances, including (without limitation) if
any of the warranties have been breached, there has been a material and
adverse effect on the market position or prospects of the Company or certain
market disruption or force majeure events.

 

 

Africa Oil Corp participation in the Subscription

Africa Oil Corp ("Africa Oil") subscribed for 4,864,865 Subscription Units at
the Issue Price, raising gross proceeds for the Company of approximately
US$1.8 million (the "Africa Oil Subscription").

 

Details of the Warrants

The Placing Warrants and Subscription Warrants (together, the "Warrants") will
be issued on the basis of one Warrant for every one Placing Share or
Subscription Share purchased.

No fractional part of a Warrant will be issued and fractional entitlements
will be rounded down to the nearest whole number. Each Warrant is subject to
terms and gives the holder the right, for the period of three years following
the date of Admission (as defined below), to subscribe for one new Common
Share at an exercise price of US$0.40625 (33p; CAD0.5215). The Warrants will
be unlisted, non-transferable and be issued in certificated form.

 

In the event that an amendment to the exercise of the Warrants is required by
the TSXV, there will be a consequent amendment to the number of Warrants to be
issued.

Related Party Transaction

As Africa Oil is a Substantial Shareholder of the Company, as defined by the
AIM Rules for Companies, the Africa Oil Subscription is a related party
transaction pursuant to Rule 13 of the AIM Rules for Companies. The
independent Directors, for the purposes of the Africa Oil Subscription, being
the Directors, other than Keith Hill, having consulted with the Company's
Nominated Adviser, Strand Hanson Limited, consider that the terms of the
Africa Oil Subscription are fair and reasonable insofar as Eco's shareholders
are concerned.

The Africa Oil Subscription is also a "Related Party Transaction" (as such
term is defined in Canada in the "Multilateral Instrument 61-101 Protection of
Minority Security Holders in Special Transactions") as it relates to the
issuance of shares to Africa Oil, an "Insider" of Eco by virtue of its
shareholdings. The Company will comply with the Instrument and will rely on
the exemptions available in Sections 5.5 and 5.7 of the Instrument as they
relate to the Subscription.

Use of Proceeds

Further to the Company's announcement published today, the net proceeds from
the Equity Fundraise are intended to be used to finance the cash consideration
of US$1.5 million for the Company's acquisition of a further 6.25%
Participating Interest in Block 3B/4B (the "Acquisition") and the remaining
US$10.8 million will be used to reprocess 3D seismic data and commence
potential well exploration operations at Block 3B/4B and Guyana Orinduik
Block.

 

The Equity Fundraise and the Acquisition are not inter-conditional. If for any
reason completion of the Acquisition did not occur, the proceeds of the Equity
Fundraise that have been provisionally allocated to be used on that
transaction would be applied to other general corporate purposes of the
Company.

 

Issue of Fee Shares

The Company has agreed to issue 180,000 new Common Shares to certain advisers
in lieu of cash fees ("Fee Shares").

 

Admission and Total Voting Rights

Application is being made to the London Stock Exchange plc for admission of
the Placing Shares, Subscription Shares and Fee Shares to trading on AIM,
which is expected to take place at 8.00 a.m. (BST) on or around 30 June 2022
and dealings on AIM will commence at the same time ("Admission"). The issuance
of the Placing Shares and Subscription Shares is subject to approval by the
TSX Venture Exchange.

Following Admission, the issued share capital of the Company will be
344,863,838 Common Shares (including the 2,702,702 new Common Shares, as
announced by the Company this morning). The above figure may be used by
shareholders as the denominator for the calculations by which they will
determine if they are required to notify their interest in, or a change to
their interest in, the share capital of the Company under the FCA's Disclosure
Guidance and Transparency Rules.

 

Neither TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.

 

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 | +1 (416) 318 8272
 Strand Hanson Limited (Financial & Nominated Adviser)

                                                            +44 (0) 20 7409 3494
 James Harris

 James Bellman
 Berenberg (Broker)                                         +44 (0) 20 3207 7800
 Emily Morris

 Detlir Elezi
 Fox-Davies Capital Limited (Placing Agent)                 +44 (0) 20 3884 8450
 Daniel Fox-Davies
 Celicourt (PR)                                             +44 (0) 20 8434 2754
 Mark Antelme

 Jimmy Lea

 

 

For the purposes of MAR and Article 2 of Commission Implementing Regulation
(EU) 2016/1055 (as transposed into the laws of the United Kingdom), the
person responsible for arranging for the release of this announcement on
behalf of the Company is Gil Holzman, Co-Founder and CEO of Eco Atlantic.

 

Notes to editors

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 Group holds a 15%
Working Interest in the 1,800 km(2) Orinduik Block Operated by Tullow Oil. In
Namibia, the Group holds Operatorship and an 85% Working Interests in four
offshore Petroleum Licences: PEL's: 97, 98, 99 and 100 representing a
combined area of 28,593 km(2) in the Walvis Basin.

 

Offshore South Africa, Eco (through its subsidiary) is designated 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) in Blocks 3B/4B operated by Africa Oil Corp., totalling some
20,643 km(2).

 

 

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