REG - Eco (Atlantic) O&G - Unaudited Results and Corporate Update
27/02/2023 07:00
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RNS Number : 0633R Eco (Atlantic) Oil and Gas Ltd. 27 February 2023
27 February 2023
ECO (ATLANTIC) OIL & GAS LTD.
("Eco," "Eco Atlantic," "Company," or together with its subsidiaries, the
"Group")
Unaudited Results for the three and nine months ended 31 December 2023
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 three and nine months ended 31 December 2022,
and to provide a corporate and operational update.
Highlights:
Financials (as at 31 December 2022)
· The Company had cash and cash equivalents of US$14.5 million and no debt
as at 31 December 2022.
· The Company had total assets of US$68.0 million, total liabilities of
US$17.8 million and total equity of US$50.1 million as at 31 December 2022.
Operations:
South Africa
Block 2B
· In November 2022, the JV Partners submitted a Production Right
Application to the Petroleum Agency of SouthAfrica ("PASA"), based on the
existing oil discovery of AJ-1 and potential future operations.
· Following the drilling of the Gazania-1 well in November 2022,
further analysis of the well data is being undertaken to determine next steps
on the Block.
· Eco and its JV partners continue to believe that Block 2B contains
considerable hydrocarbon resources and further updates will be made in due
course on how the JV partners will look to deliver value from the licence for
the benefit of all stakeholders.
Block 3B/4B
· In December 2022, Eco received regulatory approval from the Department
of Mineral Resources and Energy ("DMRE") of South Africa and Petroleum Agency
South Africa ("PASA") in respect of its acquisition of an additional 6.25%
participating interest in the Block (the "Acquisition"), giving Eco an overall
interest of 26.25%.
· As the final instalment of the share consideration due in respect of
the Acquisition, Eco is issuing an additional 1,666,666 common shares to the
Lunn Family Trust, the Vendor (the "Final Consideration Shares").
· The Company and its JV partners are progressing plans to conduct a
two-well campaign on Block 3B/4B and in addition continue to progress the
collaborative farm-out process, up to 55% gross working interest in the Block,
with various potential parties.
· The JV Partners have selected a leading South African environmental
consulting firm to conduct a comprehensive Environmental and Social Impact
Assessment (ESIA) process commencing in March 2023 in preparation for
permitting and drilling activity on the Block.
· Africa Oil Corp. the Operator of the Block is preparing a new 51-101
Competent Person's Report following the completion of the 3D data reprocessing
and targets and leads identification.
Namibia
· Namibia witnessed some of the largest oil exploration discoveries in
the world in 2022 and with significant exploration activity set to continue
this year, the Company believes that its highly strategic acreage in-country
will remain of considerable interest to operators looking to enter the region.
· Eco continues to explore possible farm out opportunities with its
four licences in the region and will update investors on developments
accordingly.
Guyana
· Eco and its JV partners on the Orinduik Block, offshore Guyana,
continue to work towards identifying the optimal drilling target and Eco plans
to drill at least one well into a light oil Cretaceous target in the next
12-18 months.
· With an excess of 11 billion barrels of oil discovered in Guyana to
date, the region has become one of the most prolific hydrocarbon basins in the
world. Eco continues to work towards unlocking the potential of the Orinduik
Block as fast as practically possible.
Gil Holzman, President and Chief Executive Officer of Eco Atlantic,
commented:
"We have had a busy start to the year, and I am pleased to report substantial
progress across a number of fronts in our exciting exploration portfolio.
Following our drilling campaign on Block 2B, offshore South Africa, in Q4
2022, we continue to analyse the well data obtained from the Gazania-1 well.
We remain of the view that considerable untapped potential remains in the
asset and we are working with our partners on the Block to plan our next
steps, in order to deliver value for all stakeholders.
Significant progress continues to be made on Block 3B/4B, offshore South
Africa, with a number of workstreams progressing well. As we have said
previously, we are conducting a farm out process on the licence and we are
looking ahead to commencing a two well drilling program once ESIA is completed
and permits obtained.
Both Guyana and Namibia continue to yield sizeable discoveries, and we are
seeing unprecedented levels of interest for exploration assets in these
regions. As such, we continue to progress our highly strategic acreage
positions in both Guyana and Namibia and we look forward to updating the
market on our farm out program in Namibia and our plans for a drilling
campaign in Guyana as soon as practically possible.
We remain excited about the potential for 2023 and we look forward to keeping
all stakeholders updated throughout the course of the year."
Admission of the Common Shares
Application has been made for admission of the Final Consideration Shares,
which will rank pari passu with existing Common Shares, to trading on AIM
("Admission"). It is expected that Admission will become effective, and
trading will commence on or around 8.00 a.m. on 3 March 2023.
Following Admission of the Consideration Shares, the enlarged issued share
capital of the Company will be 367,348,680 Common Shares. 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.
The Company's unaudited financial results for the three and nine months ended
31 December 2022, together with Management's Discussion and Analysis as at 31
December 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
December 31, March 31,
2022 2022
(Unaudited) (Audited)
Assets
Current Assets
Cash and cash equivalents 14,461,888 3,438,834
Short-term investments 55,266 52,618
Government receivable 42,468 27,487
Amounts owing by license partners, net 4,279,350 -
Accounts receivable and prepaid expenses 788,597 257,911
Assets held for sale - 2,061,734
Total Current Assets 19,627,569 5,838,584
Non- Current Assets
Investment in associate 9,000,254 9,277,162
Petroleum and natural gas licenses 39,351,990 30,753,034
Total Non-Current Assets 48,352,244 40,030,196
Total Assets 67,979,813 45,868,780
Liabilities
Current Liabilities
Accounts payable and accrued liabilities 17,003,778 1,931,823
Current liabilities related to assets held for sale - 473,254
Warrant liability 838,789 3,241,762
Total Current Liabilities 17,842,567 5,646,839
Total Liabilities 17,842,567 5,646,839
Equity
63,141,609
Share capital 121,570,983
20,766,996
Shares to be issued -
267,669
Restricted Share Units reserve 433,153
7,806,000
Warrants 14,778,272
958,056
Stock options 2,560,023
(1,309,727)
Foreign currency translation reserve (1,846,026)
(51,408,662)
Accumulated deficit (87,359,159)
Total Equity 50,137,246 40,221,941
Total Liabilities and Equity 67,979,813 45,868,780
Income Statement
Three months ended Nine months ended
December 31, December 31,
2022 2021 2022 2021
Unaudited Unaudited
Revenue
36,731 - 93,183 8,435
Interest income
36,731 - 93,183 8,435
Operating expenses:
116,651 697,106 526,738
Compensation costs 217,192
131,188 79,763 591,767 261,262
Professional fees
Operating costs, net 19,880,507 179,885 32,921,918 597,703
General and administrative costs 120,692 121,569 728,846 430,926
Share-based compensation 484,125 2,373 2,236,011 14,083
Foreign exchange loss (333,104) (12,235) 642,117 40,987
Total operating expenses 20,500,600 488,006 37,817,765 1,871,699
(20,463,869) (488,006) (37,724,582) (1,863,264)
Operating loss
Fair value change in warrant liability 556,277 1,236,827 2,402,973 1,874,016
Share of losses of company accounted for at equity (92,303) - (276,908) -
Net profit (loss) for the period from continuing operations (19,999,895) 748,821 (35,598,517) 10,752
Gain (loss) from discontinued operations, after-tax 546,343 (512,778) (351,980) (1,000,969)
Net profit (loss) for the period (19,453,552) 236,043 (35,950,497) (990,217)
Foreign currency translation adjustment 16,803 35,160 (536,299) 26,925
Comprehensive profit (loss) for the period (19,436,749) 271,203 (36,486,796) (963,292)
Basic and diluted net loss per share attributable to equity holders of the (0.055) (0.002) (0.104) (0.005)
parent
365,355,650 199,893,636 344,158,567 194,041,560
Weighted average number of ordinary shares used in computing basic and diluted
net loss per share
Cash Flow Statement
Nine months ended
December 31,
2022 2021
(Unaudited) (Unaudited)
Cash flow from operating activities
Net loss from continuing operations (35,598,517) 10,752
Net loss from discontinued operations (351,980) (1,000,969)
Items not affecting cash:
Share-based compensation 2,236,012 14,083
Depreciation and amortization - 57,187
Accrued interest - 8,535
Revaluation of warrant liability (2,402,973) (1,874,016)
Share of losses of companies accounted for at equity 276,908 -
Changes in non‑cash working capital:
Government receivable (14,981) 12,444
Accounts payable and accrued liabilities 15,243,249 145,697
Accounts receivable and prepaid expenses 7,969,314 (59,781)
Reallocation to discontinued operations cashflows (171,294) -
Advance from and amounts owing to license partners (12,878,306) (298,337)
(25,692,568) (2,984,405)
Net change in non-cash working capital items relating to discontinued (458,842) -
operations
Cash flow from investing activities
Investment in associate - (10,000,000)
(2,648) 1,500,022
Short-term investments
(2,648) (8,499,978)
Cash flow from investing activities - discontinued operations 2,047,322 -
Cash flow from financing activities
Proceeds from private placements, net 35,666,089 -
Issuance of shares - 4,793,789
Exercise of stock options - 71,388
35,666,089 4,865,177
Increase (decrease) in cash and cash equivalents 11,559,353 (6,619,206)
Foreign exchange differences (536,299) 46,000
Cash and cash equivalents, beginning of period 3,438,834 11,807,309
Cash and cash equivalents, end of period 14,461,888 5,234,103
Supplementary disclosure of cash flow information:
Significant non-cash transactions
Issuance of shares in respect of farm out agreement 8,500,000 -
8,500,000 -
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 26.25% Working Interest in Block 3B/4B operated by Africa Oil
Corp., totalling some 20,643km(2).
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