REG - Eco (Atlantic) O&G - Unaudited Results and Corporate Update
01/03/2024 07:00
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RNS Number : 2260F Eco (Atlantic) Oil and Gas Ltd. 01 March 2024
1st March 2024
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 2023.
Highlights:
Financials (as at 31 December 2023)
· The Company had cash and cash equivalents of US$2.2 million and no
debt as at 31 December 2023.
· The Company had total assets of US$49.9 million, total liabilities of
US$1.6 million and total equity of US$48.3 million as at 31 December 2023.
Operations:
South Africa
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.
Block 3B/4B
· The JV partners continue to actively progress a farm out in
conjunction with preparations for a two well drilling campaign on the Block.
Further updates will be made as appropriate.
Post-period end
· On January 22, 2024, Eco's wholly owned subsidiary, Azinam Limited,
received final government approval for the farm out of its 6.25% Participating
Interest in Block 3B/4B to Africa Oil Corp. announced on 11 July 2023. As per
the teams of the Assignment and Transfer Agreement, Eco received further
payment of $2.5m from Africa Oil.
Namibia
· Following continued drilling success in the area, Eco continues to
receive significant interest in its strategic acreage position in Namibia.
· The Company continues to assess farm out opportunities with its four
licences in the region and will update the market further as appropriate.
Guyana
· As previously announced, on November 15, 2023, the Company received
approval for the transfer of 60% Working Interest and Operatorship in the
Orinduik Block, offshore Guyana, from the government.
· Within the period, Eco became Operator of the Orinduik Block,
holding, in aggregate, a 75% Participating Interest via Eco Orinduik (60%) and
Eco (Atlantic) Guyana Inc (15%), following the closing of the acquisition of
Tullow Guyana B.V.
· A formal farm-out process for the Orinduik Block is underway and the
Company will provide further updates as appropriate.
· Guyana remains one of the most prolific hydrocarbon basins in the
world, continuing to yield sizable discoveries and attracting high levels of
interest for exploration assets.
Post-period end
· On January 22, 2024, Eco Orinduik gave notice to the Minister of
Natural Resources of the Cooperative Republic of Guyana to enter the Second
Phase of the Second Renewable Period of the Orinduik License effective as of
January 2024 and TOQAP's decision to relinquish its 25% WI. As a result, Eco
currently holds 100% WI in the Block.
Gil Holzman, President and Chief Executive Officer of Eco Atlantic,
commented:
"Each asset within our exploration portfolio yields exciting opportunities and
I am pleased to report continued progress across all fronts. Notably,
government approval of our farm-out agreement of our 6.25% Participating
Interest in Block 3B/4B to Africa Oil has strengthened our cash position as we
continue preparations for a two well drilling campaign on the Block and
progress farm out discussions.
"Guyana remains one of the most important hydrocarbon provinces in the world
and Eco's position has been strengthened by its increased Working Interest in
the Orinduik Block. We have seen a great deal of interest from a number of oil
and gas players as we progress a formal farm out process.
"Eco continues to benefit from its position in Namibia, which sits close to
some of the largest oil discoveries in 2023, an area that we expect will see
further excitement and activity over the course of this year, which will aid
our farm out process.
"The end of the period was marked by dynamic activity across our portfolio and
we remain excited about the potential for the remainder of 2024."
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,
2023 2023
Assets
Current Assets
Cash and cash equivalents 2,190,363 4,110,734
Short-term investments 13,107 13,107
Government receivable 18,328 22,494
Amounts owing by license partners, net 31,830 477,578
Accounts receivable and prepaid expenses 79,520 1,529,451
Total Current Assets 2,333,148 6,153,364
Non- Current Assets
Investment in associate 8,113,596 8,612,267
Petroleum and natural gas licenses 39,450,544 40,852,020
Total Non-Current Assets 47,564,140 49,464,287
Total Assets 49,897,288 55,617,651
Liabilities
Current Liabilities
Accounts payable and accrued liabilities 1,400,511 4,416,789
Advances from and amounts owing to license partners, net 198,254 286,553
Warrant liability - 261,720
Total Current Liabilities 1,598,765 4,965,062
Total Liabilities 1,598,765 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 (1,642,705) (1,458,709)
Accumulated deficit (90,746,696) (87,963,416)
Total Equity 48,298,523 50,652,589
Total Liabilities and Equity 49,897,288 55,617,651
Income Statement
Three months ended Nine months ended
December 31, Dec
emb
er
31,
2023 2022 2023 2022
Revenue
Interest income 17 36,731 1,703 93,183
17 36,731 1,703 93,183
Operating expenses:
Compensation costs 208,201 217,192 629,199 697,106
Professional fees 89,877 131,188 388,437 591,767
Operating costs, net 567,682 19,880,507 1,329,063 32,921,918
General and administrative costs 180,744 120,692 453,786 728,846
Share-based compensation - 484,125 95,695 2,236,011
Foreign exchange loss (111,839) (333,104) (12,094) 642,117
Total operating expenses 934,665 20,500,600 2,884,086 37,817,765
Operating loss (934,648) (20,463,869) (2,882,383) (37,724,582)
Gain on settlement of liability (Note 8(a)) - - (200,640) -
Fair value change in warrant liability - 556,277 261,720 2,402,973
Share of losses of company accounted for at equity (166,224) (92,303) (498,671) (276,908)
Net loss for the period from continuing operations, before taxes (1,100,872) (19,999,895) (3,319,974) (35,598,517)
Tax recovery - - 536,694 -
Net loss for the period from continuing operations, after taxes (1,100,872) (19,999,895) (2,783,280) (35,598,517)
Gain (loss) from discontinued operations, after-tax - 546,343 - (351,980)
Net loss for the period (1,100,872) (19,453,552) (2,783,280) (35,950,497)
Foreign currency translation adjustment 101,779 16,803 (183,996) (536,299)
Comprehensive loss for the period (999,093) (19,436,749) (2,967,276) (36,486,796)
Basic and diluted net loss per share:
from continuing operations (0.0030) (0.0547) (0.0090) (0.1034)
from discontinued operations (0.0003) 0.0015 (0.0003) (0.0010)
Weighted average number of ordinary shares used in computing basic and diluted 370,173,680 365,355,650 368,987,135 344,158,567
net loss per share
Cash Flow Statement
Nine months ended
December 31,
2023 2022
Cash flow from operating activities - continued operations
Net loss from continuing operations $ (2,783,280) $ (35,598,517)
Items not affecting cash:
Share-based compensation 95,695 2,236,011
Revaluation of warrant liability (261,720) (2,402,973)
Share of losses of companies accounted for at equity 498,671 276,908
Changes in non‑cash working capital:
Government receivable 4,166 (14,981)
Accounts payable and accrued liabilities (2,897,287) 15,243,249
Accounts receivable and prepaid expenses 1,449,931 7,969,314
Reallocation to discontinued operations cashflows - (171,294)
Advance from and amounts owing to license partners 357,449 (12,878,306)
Cash flow from operating activities - continued operations (3,536,375) (25,340,589)
Cash flow from operating activities - discontinued operations - (810,822)
Cash flow from investing activities
Short-term investments - (2,648)
Acquisition of Orinduik BV (700,000) -
Proceeds from Block 3B/4B farmout 2,500,000 -
Cash flow from investing activities - continued operations 1,800,000 (2,648)
Cash flow from investing activities - discontinued operations - 2,047,322
Cash flow from financing activities
Proceeds from private placements, net - 35,666,089
Cash flow from financing activities - 35,666,089
Increase (decrease) in cash and cash equivalents (1,736,375) 11,559,352
Foreign exchange differences (183,996) (536,298)
Cash and cash equivalents, beginning of period 4,110,734 3,438,834
Cash and cash equivalents, end of period $ 2,190,363 $ 14,461,888
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
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 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 is Operator and holds a 50% working interest in
Block 2B and a 20% Working Interest in Block 3B/4B, in the Orange Basin,
totalling some 20,643km(2).
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