TIDMECO
RNS Number : 2080R
Eco (Atlantic) Oil and Gas Ltd.
27 February 2019
27 February 2019
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 2018 and Business Update
Eco (Atlantic) Oil & Gas Ltd (AIM: ECO, TSX-V: EOG), the oil
and gas exploration company with licences in highly prospective
regions in Guyana and Namibia, is pleased to announce its results
for the three and nine months ended 31 December 2018 and to provide
a corporate and operational update.
Highlights:
-- Financials
o The Company ended the third financial quarter (and calendar
year end) with cash and cash equivalents of CAD 25.7 million, total
assets of CAD 28.1 million, total liabilities of CAD 0.8 million
and total equity of CAD 27.3 million.
o As a result of the Total E&P Activités Pétrolières
("Total") farm-in deal income, which amounted to CAD 16.8 million
(USD 12.5 million), the Company completed the three and nine months
period ended 31 December 2018 with a net profit of CAD 14.4 million
and CAD 11.3 million, respectively.
-- Operations - Guyana
o Eco announced the filing of a National Instrument 51-101
compliant resource report on the Orinduik Block, offshore Guyana,
with 2.9 Billion Barrels of Oil (Equivalent) prospective resource
P50 Best Estimate. The report does not take into account certain
recent developments, including ExxonMobil's Hammerhead-1 Tertiary
discovery and additional Tertiary prospects.
o On 27 November 2018, Eco completed the Total farm-in deal and
received the USD 12.5 million and all necessary approvals and
documentation to effect the 25% interest transfer in the Orinduik
Block to Total. Accordingly, the working interests in the Orinduik
Block are now Tullow (Operator) 60%, Total 25% and Eco 15%.
o On 5 December 2018, Eco announced its first planned well out
of two in the 2019 drilling program for the Orinduik Block. The net
cost of the first well, named the Jethro-Lobe prospect, is
currently expected to be approximately USD 7.6 million. The
prospect, which will be drilled from a conventional drillship, is
an Upper Tertiary stratigraphically trapped canyon turbidite in
about 1,350 meters of water. The prospect is estimated to hold
250mmbbl of gross prospective resources with the 'Chance Of
Success' estimated by Eco to be 44%.
o -On 20 February 2019, Eco announced that, along with its
partners, Total and Tullow, it has contracted a rig, the Stena
Forth, a sixth-generation drillship from Stena Carron Drilling
Limited ("Stena"), to drill the Jethro-Lobe prospect on the
Orinduik Block offshore Guyana. The Stena Forth, which is currently
drilling off West Africa, is fully crewed and is operating.
The contract with Stena secures the rig for transport at the end
of May, targeting an early June 2019 spud date. Further, the
agreement also defines a window for a second well on the Orinduik
Block, which would be drilled after the Jethro-Lobe well. Long lead
items, including the well heads and casings for two wells, have
been secured and ordered.
o The Orinduik Joint Venture partners are currently reviewing
plans and prospects for a second well and anticipate formalizing
those plans in the coming weeks. The anticipated cost of a second
well is expected to be less than the first, as the costs for the
mobilization, demobilization, well heads and casings are already
included in the budget for the first well.
-- Namibia
o Eco was granted a one-year extension to the First Renewal
Exploration Period on all of its Namibia Licenses to March 2019 by
the Namibian Ministry of Mines and Energy (the "Ministry"). Each
license will then automatically enter the Second Renewal Period,
which in turn has a two-year exploration phase which can be
extended by a third year at the discretion of the Ministry.
o -The Company acquired the remaining 10% of the shares of Pan
Africa Oil Namibia Ltd ("PAO Namibia") as announced on 20 September
2018. Following completion of the acquisition, PAO Namibia became a
wholly owned subsidiary of the Company. As a result, Eco's working
interest in the Tamar License (PEL 50) increased to 80% from
72%.
o On 26 October 2018, Eco received a formal notice from Tullow
Namibia informing that it had elected not to enter into the Second
Renewal Period for the PEL 30 License ("Cooper Block"). As a
result, the Company automatically received back Tullow Namibia's
25% working interest and the Company now holds a 57.5% working
interest in PEL 30.
o -Eco continues to monitor developments in Namibia,
specifically the recent entries by Exxon Mobil and Kosmos Energy,
and the planned 2019 wells by Total S.A. and Royal Dutch Shell
plc.
-- Corporate
o -On 20 February 2019, Eco announced the appointment of Stifel
Nicolaus Europe Limited and Joh. Berenberg, Gossler & Co. KG as
the Company's joint corporate brokers with immediate effect.
o Eco has been ranked second in the Energy Sector on the 2019
TSX Venture 50(TM), up from fifth in 2018. This marks the second
consecutive year the Company has been included in the TSX Venture
50(TM), an annual ranking of the top-performing companies on the
TSX Venture Exchange.
Gil Holzman, President and Chief Executive Officer of Eco
Atlantic, commented:
"We are pleased to report that we started calendar year 2019
with the same intensity with which we ended 2018. During the first
two months of 2019, following the announcement of our initial
drilling program on our Orinduik Block offshore Guyana, we,
together with our partners on the block, have signed a drilling
contract and confirmed our intention to spud the first well during
the second quarter of 2019. The completion of Total's farm-in to
our block and the receipt of USD 12.5 million, together with our
existing cash resources, means that we are fully funded for at
least two wells on our high impact 2019 drilling program in Guyana.
With our strong balance sheet we remain in a robust financial
position.
"On the corporate side, we appointed two of the leading UK and
international investment banks, Stifel Nicolaus Europe Limited and
Joh. Berenberg, Gossler & Co. KG as our joint corporate
brokers. Berenberg and Stifel will work alongside our existing
corporate broker Pareto Securities Limited and Strand Hanson, the
Company's nominated adviser. These additions will broaden and
strengthen our brokerage and market making performance.
"As a reward for the significant milestones that we have
achieved over the last 12 months, we ranked second in the Energy
Sector on the 2019 TSX Venture 50(TM), up from fifth in 2018. This
marks the second consecutive year that we have been included in the
TSX Venture 50(TM), an annual ranking of the top-performing
companies on the TSX Venture Exchange.
"We look forward to updating the market on the selection of the
second target well to be drilled on the Orinduik Block, immediately
after the Jethro-Lobe well, and we are very excited by this
opportunity to hopefully discover very significant oil resources in
the coming months."
The Company's unaudited financial results for three months and
nine months ended 31 December 2018, together with Management's
Discussion and Analysis as at 31 December 2018, are available to
download on the Company's website at www.ecooilandgas.com and on
Sedar at www.sedar.com.
The following are the Company's Balance Sheet, Income
Statements, Cash Flow Statement and selected notes from the
Condensed Consolidated Interim Financial Statements (Unaudited).
All amounts are in Canadian Dollars, unless otherwise stated.
Balance Sheet
December 31, March 31,
----------------------------------------------------
2018 2018
---------------------------------------------------- -------------- -------------
Unaudited Audited
-------------- -------------
Assets
Current assets
Cash and cash equivalents 25,745,351 14,316,042
Short-term investments 74,818 74,818
Government receivable 19,722 23,626
Accounts receivable and prepaid
expenses 783,992 832,322
---------------------------------------------------- -------------- -------------
26,623,883 15,246,808
Petroleum and natural gas licenses 1,489,971 1,489,971
Total Assets 28,113,854 16,736,779
---------------------------------------------------- -------------- -------------
Liabilities
Current liabilities
Accounts payable and accrued liabilities 567,590 521,537
Advances from and amounts owing
to license partners, net 201,444 209,487
769,034 731,024
Equity
Share capital 44,952,511 43,813,254
Shares to be issued 249,000 1,139,257
Restricted Share Units reserve 70,393 70,393
Warrants 167,931 167,931
Stock options 2,983,827 2,979,367
Non-controlling interest - (55,065)
Accumulated deficit (21,078,842) (32,109,382)
---------------------------------------------------- -------------- -------------
Total Equity 27,344,820 16,005,755
---------------------------------------------------- -------------- -------------
Total Liabilities and Equity 28,113,854 16,736,779
---------------------------------------------------- -------------- -------------
Income Statement
Three months ended Nine months ended
December 31, December 31,
------------------------------------------------------------------- -------------------------------------------------------------------------
2018 2017 2018 2017
-------------------------------- --------------------------------- -------------------------------------- ---------------------------------
Unaudited Unaudited
------------------------------------------------------------------- -------------------------------------------------------------------------
Revenue
Income from
option
agreement 16,759,307 - 16,759,307 1,248,000
Interest income 47,877 5,997 144,852 39,554
-------------------------------- --------------------------------- -------------------------------------- ---------------------------------
16,807,184 5,997 16,904,159 1,287,554
Operating expenses
Compensation
costs 247,330 256,811 771,953 660,524
Professional
fees 72,295 196,812 172,591 351,653
Operating costs 1,891,595 1,217,364 3,656,989 4,226,274
General and
administrative
costs 337,005 155,972 968,458 618,398
Share-based
compensation 1,487 1,438,224 4,460 2,536,628
Foreign
exchange
(gain)
loss (96,049) 213,426 (4,897) 325,948
Total expenses 2,453,663 3,478,609 5,569,554 8,719,425
Net profit (loss) and
comprehensive
profit (loss) 14,353,521 (3,472,612) 11,334,605 (7,431,871)
================================ ================================= ====================================== =================================
Basic and diluted net
profit
(loss) per share
attributable
to equity holders of
the
parent 0.09 (0.03) 0.07 (0.06)
================================ ================================= ====================================== =================================
Weighted average number
of ordinary shares
used
in computing basic and
diluted
net profit (loss) per
share 159,785,217 135,918,317 158,998,512 124,395,401
================================ ================================= ====================================== =================================
Cash Flow Statement
Nine months ended
December 31,
---------------------------------------------------------------
2018 2017
------------------------------- ------------------------------
Unaudited
---------------------------------------------------------------
Cash flow from operating activities
Net loss from continued operations 11,334,605 (7,431,873)
Items not affecting cash:
Share-based compensation 4,460 2,536,628
Changes in non--cash working capital:
Government receivable 3,904 2,612
Accounts payable and accrued liabilities 46,053 (218,949)
Accounts receivable and prepaid expenses 48,330 261,788
Advance from and amounts owing to license
partners (8,043) (130,146)
---------------------------------------------- ------------------------------- ------------------------------
11,429,309 (4,979,940)
---------------------------------------------- ------------------------------- ------------------------------
Cash flow from investing activities
Short-term investments - (25,000)
---------------------------------------------- ------------------------------- ------------------------------
- (25,000)
---------------------------------------------- ------------------------------- ------------------------------
Cash flow from financing activities
Proceeds from Brokered Private Placement - 14,016,000
Costs incurred on Brokered Private Placement - (721,792)
---------------------------------------------- ------------------------------- ------------------------------
Net proceeds from AIM listing - -
- 13,294,208
---------------------------------------------- ------------------------------- ------------------------------
Increase in cash and cash equivalents 11,429,309 8,289,268
Cash and cash equivalents, beginning of
period 14,316,042 6,088,567
---------------------------------------------- ------------------------------- ------------------------------
Cash and cash equivalents, end of period 25,745,351 14,377,835
---------------------------------------------- ------------------------------- ------------------------------
Selected Notes to the Condensed Consolidated Interim Financial
Statements (Unaudited)
The Company's business is to identify, acquire, explore and
develop petroleum, natural gas, and shale gas properties. The
Company primarily operates in the Co-Operative Republic of Guyana
("Guyana") and the Republic of Namibia ("Namibia"). The head office
of the Company is located at 7 Coulson Street, Toronto, ON, Canada,
M4V 1Y3.
As used herein, the term "Company" means individually and
collectively, as the context may require, Eco (Atlantic) Oil and
Gas Ltd. and its subsidiaries.
These consolidated financial statements were approved by the
Board of Directors of the Company on 26 February 2019.
1. Basis of Preparation
These condensed consolidated interim financial statements have
been prepared in accordance with International Financial Reporting
Standards ("IFRS") on a going concern basis, which assumes the
realization of assets and liquidation of liabilities in the normal
course of business. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for
a fair statement of results in accordance with IFRS have been
included.
2. Subsequent Events
a) On 25 January 2019, the Company announced that it had issued
1,090,313 new common shares in the Company pursuant to an exercise
of warrants, previously issued in connection with the AIM
admission, at an exercise price of CAD 0.33 (19.2p) per common
share for total proceeds of CAD 364,420 (GBP209,340).
b) --On 25 January 2019, the Company announced that it had
issued 50,000 new common shares in the Company pursuant to an
exercise of share options at a price of CAD 0.30 per common share
for total proceeds of CAD 15,000.
c) On 8 February 2019, the Company announced that it had issued
150,000 new common shares in the Company pursuant to an exercise of
share options at a price of CAD 0.30 per common share for total
proceeds of CAD 45,000.
**ENDS**
For more information, please visit www.ecooilandgas.com or
contact the following:
Eco Atlantic Oil and Gas +1 (416) 250 1955
Gil Holzman, CEO
Colin Kinley, COO
Strand Hanson Limited (Financial & Nominated
Adviser) +44 (0) 20 7409 3494
James Harris
Rory Murphy
James Bellman
Stifel Nicolaus Europe Limited (Joint
Broker)
Callum Stewart
Nicholas Rhodes
Ashton Clanfield +44 (0)20 7710 7600
Berenberg (Joint Broker) +44 (0) 20 3207 7800
Matthew Armitt
Detlir Elezi
Pareto Securities Limited (Joint Broker) +44 (0) 20 7786 4370
Søren Clausen +44 (0) 20 7786 4382
Davide Finelli +44 (0) 20 7786 4398
Matilda Mäkitalo +44 (0) 20 7786 4375
Blytheweigh (PR) +44 (0) 20 7138 3204
Tim Blythe
Julia Tilley
Jane Lenton
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014.
Notes to editors
Eco Atlantic is a TSX-V and AIM listed Oil & Gas exploration
and production Company with interests in Guyana and Namibia where
significant oil discoveries have been made.
The Group aims to deliver material value for its stakeholders
through oil exploration, appraisal and development activities in
stable emerging markets, in partnership with major oil companies,
including Tullow, Total and Azinam.
In Guyana, Eco Guyana holds a 15% working interest alongside
Total (25%) and Tullow Oil (60%) in the 1,800 km(2) Orinduik Block
in the shallow water of the prospective Suriname-Guyana basin. The
Orinduik Block is adjacent and updip to the deep-water Liza Field
and Snoek, Payara, Pacora, Turbot, Longtail and Hammerhead
discoveries, recently made by ExxonMobil and Hess Corporation. The
more recent discovery by ExxonMobil and Hess Corporation, Pluma-1,
increased the estimate of recoverable resources for the Stabroek
Block to more than 5 billion barrels of oil equivalent, and the
latest discoveries at Tilapia-1 and Haimara-1 will further add to
that estimate.
In Namibia, the Company holds interests in four offshore
petroleum licences totalling approximately 25,000km(2) with over
2.3 billion barrels of prospective P50 resources in the Walvis and
Lüderitz Basins. These four licences, Cooper, Guy, Sharon and Tamar
are being developed alongside partners Azinam and NAMCOR. Eco has
been granted a drilling permit on its Cooper Block (Operator).
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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