REG - Eco (Atlantic) O&G - Results for Three & Six Months Ended 30 Sept 2024
27/11/2024 07:00
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RNS Number : 8333N Eco (Atlantic) Oil and Gas Ltd. 27 November 2024
27 November 2024
ECO (ATLANTIC) OIL & GAS LTD.
("Eco," "Eco Atlantic," "Company," or together with its subsidiaries, the
"Group")
Results for the Three and Six Month Periods Ended 30 September 2024
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 unaudited results for the three and six month periods ended 30
September 2024.
Highlights:
Financials
· The Company had cash and cash equivalents of US$7.95 million and no
debt as at 30 September 2024.
· The Company had total assets of US$28.74 million, total liabilities
of US$1.44 million and total equity of US$27.3 million as at 30 September
2024.
· Following completion of the farm down of Block 3B/4B offshore
the Republic of South Africa, as announced on 28 August 2024, Eco has
received the first payment of US$8.3 million from the JV partners as part of
the milestone payments agreed in the 3B/4B Transaction. An additional $11.5
million is expected to be received by the Company during 2025 when the next
milestones are reached.
Operations:
South Africa
Block 1
· On 5 June 2024, Eco announced the acquisition of Block 1 Offshore
South Africa Orange Basin. Through its 100% owned subsidiary Azinam South
Africa Limited ("Azinam South Africa"), the Company will farm-in and acquire
a 75% Working Interest ("WI") from Tosaco Energy (Proprietary)
Limited ("Tosaco") and will become Operator of a new Exploration Right (the
"Block 1 Acquisition").
Block 3B/4B
· On 29 July 2024, the Company announced the signing of an agreement to
sell a 1% interest in Block 3B/4B South Africa in exchange for cancellation of
all of Africa Oil's shares and warrants in Eco (worth C$11.5 million). Upon
Completion, Eco, which currently holds a 6.25% interest in Block 3B/4B, will
hold a fully carried 5.25% interest in Block 3B/4B Offshore South Africa.
Accordingly, the number of shares of the company will be reduced from
370,173,680 to only 315,231,936 shares.
· On 28 August 2024, the Company announced the completion of a farm
down of the previously announced 13.75% Participating Interest in Block 3B/4B
offshore the Republic of South Africa and the Transfer of Operatorship of the
Block after receipt of the requisite regulatory approvals (Section 11) from
the government of South Africa.
Block 2B
· The Company is relinquishing its 50% WI Operated offshore Block 2B
in South Africa where it drilled its 2022 Gazania-1 well offsetting the AJ-1
oil discovery. The Company has completed all necessary documentation, and
environmental audits, and has informed the Petroleum Agency of South
Africa ("PASA"), being the regulator for the Government of South Africa.
Eco's board considers Block 2B a non-core asset in the portfolio given the
Company's interests in Namibia, Block 3B/4B and Block 1 in SA and the 2
blocks in Guyana. Following acceptance by the PASA of this relinquishment,
the Company will have no further liability in respect of Block 2B.
Namibia
· The previously announced multi-block farm out process for all or part
of Eco's four offshore Petroleum Exploration Licences ("PEL"): 97, 98, 99, and
100 has continued. Eco holds Operatorship and an 85% WI in each PEL
representing a combined area of 28,593 km(2) in the Walvis Basin.
· Eco Atlantic is witnessing considerable interest in its licenses in
Namibia and is currently assessing options to progress its exploration work
programmes including a potential farm-out. Eco looks forward to providing more
updates on the progress of this process in due course.
Guyana
· Eco has continued to engage in discussions with industry players
regarding the farm out initiative for the offshore Orinduik Block. Guyana
continues to be an exciting jurisdiction for hydrocarbon exploration and
production and Eco is pleased to have exposure to this ever-growing frontier.
Gil Holzman, President and Chief Executive Officer of Eco Atlantic,
commented:
"We are pleased with the continued operational and financial progress achieved
in recent months. Following completion of the farm-down of Block 3B/4B, we
received a payment of US$8.3 million from our JV partners, with the potential
for Eco to receive a further US$11.5 million in 2025, subject to certain
milestones being achieved on Block 3B/4B. This demonstrated our commitment to
unlocking value from our South African portfolio while maintaining exposure to
the highly prospective Orange Basin.
"Eco also increased its exposure to South Africa's Orange Basin growing
offshore energy acreage through the acquisition of a 75% working interest in
Block 1, while taking the strategic decision to relinquish Block 2B. Both of
these developments further indicate Eco's ability to take strategically
prudent decisions to maximise the Company's exposure to exciting
jurisdictions.
"With active farm-out discussions ongoing in Namibia and Guyana, we are
well-positioned to capitalise on high levels of interest from potential
partners in these exciting exploration regions. We remain committed to
delivering value for our shareholders and look forward to sharing further
updates in the months ahead."
The Company's unaudited financial results and Management's Discussion and
Analysis for the three and six months ended 30 September 2024 are available
for download on the Company's website at 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,
2024 2024
Assets
Current Assets
Cash and cash equivalents 7,946,212 2,967,005
Short-term investments 75,000 13,107
Government receivable 21,938 26,970
Amounts owing by license partners - 49,578
Accounts receivable and prepaid expenses 1,276 38,539
Total Current Assets 8,044,426 3,095,199
Non- Current Assets
Petroleum and natural gas licenses 20,695,406 28,168,439
Total Non-Current Assets 20,695,406 28,168,439
Total Assets 28,739,832 31,263,638
Liabilities
Current Liabilities
Accounts payable and accrued liabilities 970,881 1,163,546
Advances from and amounts owing to license partners 466,376 81,952
Total Current Liabilities 1,437,257 1,245,498
Total Liabilities 1,437,257 1,245,498
Equity
Share capital 122,088,498 122,088,498
Restricted Share Units reserve 920,653 920,653
Warrants 14,778,272 14,778,272
Stock options 2,900,501 2,900,501
Foreign currency translation reserve (1,524,581) (1,568,469)
Accumulated deficit (111,860,768) (109,101,315)
Total Equity 27,302,575 30,018,140
Total Liabilities and Equity 28,739,832 31,263,638
Income Statement
Three months ended Six months ended
September 30, Sep
tem
ber
30,
2024 2023 2024 2023
Revenue
Interest income 4,300 21 7,511 1,686
4,300 21 7,511 1,686
Operating expenses:
Compensation costs 271,845 236,556 471,312 420,998
Professional fees 214,519 202,557 356,488 298,560
Operating costs, net 1,005,555 411,201 1,547,241 761,381
General and administrative costs 156,588 160,569 314,613 273,042
Share-based compensation - (15,817) - 95,695
Foreign exchange loss (gain) (11,813) 139,795 77,310 99,745
Total operating expenses 1,636,694 1,134,861 2,766,964 1,949,421
Operating loss (1,632,394) (1,134,840) (2,759,453) (1,947,735)
Other Non-Operating Charges and Write-downs
Gain on settlement of liability - (200,640) - (200,640)
Fair value change in warrant liability - - - 261,720
Share of losses of associate - (166,223) - (332,447)
Tax recovery - 536,694 - 536,694
Net loss for the period (1,632,394) (965,009) (2,759,453) (1,682,408)
Foreign currency translation adjustment 75,627 9,901 43,888 (285,775)
Comprehensive loss for the period (1,556,767) (955,108) (2,715,565) (1,968,183)
Basic and diluted net loss per share: (0.004) (0.004) (0.007) (0.006)
Weighted average number of ordinary shares used in computing basic and diluted 370,173,680 369,421,234 370,173,680 368,390,620
net loss per share
Cash Flow Statement
Six months ended
September 30,
2024 2023
Cash flow from operating activities
Net loss from continuing operations (2,759,453) (1,682,408)
Items not affecting cash:
Share-based compensation - 95,695
Fair value change in warrant liability - (261,720)
Share of losses of companies accounted for at equity - 332,447
Changes in non‑cash working capital:
Government receivable 5,032 (8,056)
Accounts payable and accrued liabilities (192,665) (2,805,578)
Accounts receivable and prepaid expenses 37,263 1,365,309
Advance from and amounts owing to license partners 41,715 489,800
Cash flow from operating activities (2,868,108) (2,474,511)
Cash flow from investing activities
Short-term investments (61,893) -
Acquisition of interest in property (150,000) -
Proceeds from Block 3B/4B farm-out 8,015,320 2,500,000
Cash flow from investing activities 7,803,427 2,500,000
Cash flow from financing activities - -
Increase in cash and cash equivalents 4,935,319 25,489
Foreign exchange differences 43,888 (285,775)
Cash and cash equivalents, beginning of period 2,967,005 4,110,734
Cash and cash equivalents, end of period 7,946,212 3,850,448
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
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
Celicourt (PR) +44 (0) 20 7770 6424
Mark Antelme
Jimmy Lea
Charles Denley-Myerson
About Eco Atlantic:
Eco Atlantic is a TSX-V and AIM-quoted Atlantic Margin-focused oil and 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 operates a
100% Working Interest in the 1,354 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 km(2) in the Walvis Basin. Offshore South Africa, Eco holds a 6.25%
Working Interest in Block 3B/4B and pending government approval a 75% Operated
Interest in Block 1, in the Orange Basin, totalling some 37,510km(2).
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