TIDMECO
RNS Number : 9764T
Eco (Atlantic) Oil and Gas Ltd.
20 November 2019
20 November 2019
ECO (ATLANTIC) OIL & GAS LTD.
("Eco," "Eco Atlantic," "Company," or together with its
subsidiaries, the "Group")
Unaudited Results for the six months ended 30 September 2019 and
Business Update
Preparations underway for 2020 drilling campaign
Eco (Atlantic) Oil & Gas Ltd. (AIM: ECO, TSX--V: EOG), the
oil and gas exploration company with licences in Guyana and
Namibia, is pleased to announce its results for the three and six
months ended 30 September 2019, alongside a corporate and
operational update.
Results Highlights:
Financials
-- As at 30 September 2019, the Company had cash and cash
equivalents of CAD $30.7 million. The Company remains well funded
and currently has CAD $27.9 million of cash and cash equivalents on
the balance sheet.
-- During the first quarter of the financial year, Eco completed
its previously announced private placement raising gross proceeds
of CAD $22.6 million.
-- As at 30 September 2019, Eco had total assets of CAD $32.3
million, total liabilities of CAD $2.5 million and total equity of
CAD $29.8 million.
Operations - Guyana
-- On 12 August 2019, the Company announced a major oil
discovery on its Orinduik offshore petroleum license in Guyana (the
"Guyana License"). Evaluation of logging data confirms that
Jethro-1 is the first discovery on the Guyana License and comprises
high-quality oil-bearing sandstone reservoir of Lower Tertiary age.
The well was cased and is awaiting further evaluation to determine
the appropriate appraisal activity.
-- On 16 September 2019, the Company announced a second oil
discovery on the Guyana License. Evaluation of MWD, wireline
logging and sampling of the oil confirms that Joe-1 is the second
discovery on the Orinduik license and comprises high quality
oil-bearing sandstone reservoir with a high porosity of Upper
Tertiary age.
-- Both wells were drilled within budget, with MWD logging tool
and conventional wireline, and the reservoirs were considered to be
high quality sands with good permeability.
-- Fluid samples were taken in both of the wells and were sent
for analysis by the Operator. The complete fluid analysis and
report for both wells have not yet been received. However, initial
results suggest that the samples recovered to date from Jethro-1
and Joe-1 are mobile heavy crudes with high sulphur content.
-- Oil tested to date appears it is not dissimilar to the
commercial heavy crudes currently in production in the North Sea,
Gulf of Mexico, the Campos Basin in Brazil, Venezuela and
Angola.
-- The Joint Venture partners on the block have engaged a third
party consultant with heavy oil development expertise to help
conduct preliminary evaluations related to production and
commercialisation. Evaluation work is ongoing and the partners are
considering alternatives for further drilling and testing and a
number of development drilling and production alternatives are now
to be considered. The Company remains optimistic in considering the
development scenarios and as the project progresses will define
further information on plans and timing.
-- The CPR published on 18 March 2019 suggested the block
potentially contains in excess of 3.9 billion Gross Prospective Oil
Equivalent Resources (P50 Best) on approximately 15 identified
prospects. Approximately 900 million barrels of oil in Tertiary
Reservoirs and approximately 3 billion barrels of oil in Cretaceous
prospects, remain to be explored. The Company is currently
preparing an updated CPR, which is expected to be published after
the Kanuku block Carapa well results, potentially in January
2020.
Outlook
-- Guyana
o Multiple prospects currently being reviewed with high graded
candidates under consideration for a 2020 drilling programme.
o Operator is preparing a budget for long lead items including
wellheads and casing.
o Once the final well fluid reports and related testing data for
the two discoveries as well as results from other regional
exploration activities, including drilling of the neighbouring
Carapa well have been analysed and evaluated, an updated CPR will
be published
o A further update will be made on the JV Partner's drilling
plans for next year in January 2020.
-- Namibia
o Eco continues to progress its various work programmes offshore
Namibia.
o The Company plans to monitor near term drilling activity in
the region and will update the market on developments as
appropriate.
Gil Holzman, President and Chief Executive Officer of Eco
Atlantic, commented:
"We ended the first half of our financial year with a very
strong balance sheet. After drilling our first two wells in Guyana
we now have CAD $27.9 of cash and cash equivalents. These funds
will be used to continue the evaluation of our two Guyana oil
discoveries and to drill additional exploration and potentially
appraisal wells on the block in 2020.
We recognise the market reaction to our last announcement on the
oil quality discovered at Jethro and Joe and we are grateful for
the continued support of our shareholders. This continues to be an
exciting time for the Company, as the Orinduik block offers many
promising prospects and we continue to work with our partners and
third party experts to evaluate our first two discoveries and
determine the 2020 drilling targets and budget. We expect to
announce our drilling plans by the end of January 2020 and we look
forward to updating our shareholders on this as appropriate."
The Company's unaudited financial results for three and six
months ended 30 September 2019, together with Management's
Discussion and Analysis as at 30 September 2019, 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 annual
Financial Statements. All amounts are in Canadian Dollars, unless
otherwise stated.
Balance Sheet
In accordance with the Company's accounting policies, under
IFRS, all our exploratory costs to date have been charged to the
Company's statement of operations. Following the two discoveries on
our Guyana Licenses, the Company will begin to capitalize all
development related costs incurred until potential production
phase.
September March 31,
30,
----------------------------------------------------
2019 2019
---------------------------------------------------- ----------------------- -------------------------
Assets Unaudited Audited
----------------------- -------------------------
Current assets
Cash and cash equivalents 30,654,374 25,007,479
Short-term investments 74,818 74,818
Government receivable 42,613 33,104
Accounts receivable and prepaid expenses 50,338 80,926
---------------------------------------------------- ----------------------- -------------------------
30,822,143 25,196,327
Petroleum and natural gas licenses 1,489,971 1,489,971
---------------------------------------------------- ----------------------- -------------------------
Total Assets 32,312,114 26,686,298
---------------------------------------------------- ----------------------- -------------------------
Liabilities
Current liabilities
Accounts payable and accrued liabilities 147,986 423,513
Advances from and amounts owing to
license partners, net 2,328,675 1,127,675
----------------------------------------------------
Total Liabilities 2,476,661 1,551,188
Equity
Share capital 78,759,680 50,025,998
Restricted Share Units reserve 356,493 111,493
Warrants 70,280 52,775
Stock options 3,278,086 3,184,658
Accumulated deficit (52,629,086) (28,239,814)
---------------------------------------------------- ----------------------- -------------------------
Total Equity 29,835,453 25,135,110
---------------------------------------------------- ----------------------- -------------------------
Total Liabilities and Equity 32,312,114 26,686,298
---------------------------------------------------- ----------------------- -------------------------
Income Statement
Three months ended Six months ended
September 30, September 30,
--------------------------------------------- -----------------------------------------------
2019 2018 2019 2018
----------------------- -------------------- ------------------------- --------------------
Unaudited Unaudited
--------------------------------------------- -----------------------------------------------
Revenue
Interest income 134,415 88,132 304,210 96,975
----------------------- -------------------- ------------------------- --------------------
134,415 88,132 304,210 96,975
Operating expenses:
Compensation
costs 342,627 291,575 558,922 524,941
Professional
fees 289,636 77,069 313,826 102,362
Operating costs 6,851,804 1,293,895 15,109,935 1,762,395
General and
administrative
costs 473,423 340,349 1,000,588 632,068
Share-based
compensation 7,409,504 1,486 7,468,361 2,973
Foreign
exchange gain 291,195 233,848 241,850 91,152
Total expenses 15,658,189 2,238,222 24,693,482 3,115,891
Net loss and
comprehensive
loss (15,523,774) (2,150,090) (24,389,272) (3,018,916)
======================= ==================== ========================= ====================
Basic and diluted
net loss per share
attributable to equity
holders of the parent (0.09) (0.01) (0.13) (0.02)
======================= ==================== ========================= ====================
Weighted average number
of ordinary shares
used in computing
basic and diluted
net loss per share 182,038,204 159,195,217 181,112,949 158,619,131
======================= ==================== ========================= ====================
Cash Flow Statement
Six months ended
September 30,
-------------------------------------------------
2019 2018
---------------------- -------------------------
Unaudited
-------------------------------------------------
Cash flow from operating activities
Net loss from operations (24,389,272) (3,018,916)
Items not affecting cash:
Share-based compensation 7,468,361 2,973
Warrants issued for services 70,280 -
Changes in non--cash working capital:
Government receivable (9,509) (4,505)
Accounts payable and accrued liabilities (275,527) (291,294)
Accounts receivable and prepaid expenses 30,588 40,413
Advance from and amounts owing to
license partners 1,201,000 284,515
--------------------------------------------- ---------------------- -------------------------
(15,904,079) (2,986,814)
--------------------------------------------- ---------------------- -------------------------
Cash flow from financing activities
Net proceeds from Private Placement 21,338,853 -
Proceeds from the exercise of stock 50,345 -
options
Proceeds from the exercise of warrants 161,776 -
--------------------------------------------- ---------------------- -------------------------
21,550,974 -
--------------------------------------------- ---------------------- -------------------------
Increase (decrease) in cash and cash
equivalents 5,646,895 (2,986,814)
Cash and cash equivalents, beginning
of year 25,007,479 14,316,042
--------------------------------------------- ---------------------- -------------------------
Cash and cash equivalents, end of
period 30,654,374 11,329,228
--------------------------------------------- ---------------------- -------------------------
Basis of Preparation
The condensed consolidated interim 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.
Subsequent Events
On October 24, 2019, the Company issued 178,750 common shares,
in respect of 178,750 options that were exercised at $0.30 per
option. Gross consideration received amounted to $53,625.
**S**
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
Alice Carroll, Head of Marketing and IR +44(0)781 729 5070
Strand Hanson Limited (Financial & Nominated
Adviser) +44 (0) 20 7409 3494
James Harris
James Bellman
Stifel Nicolaus Europe Limited (Joint
Broker)
Callum Stewart
Ashton Clanfield +44 (0)20 7710 7600
Berenberg (Joint Broker) +44 (0) 20 3207 7800
Matthew Armitt
Detlir Elezi
Celicourt (PR) +44 (0) 20 8434 2754
Mark Antelme
Jimmy Lea
Hannam & Partners (Research Advisor)
Neil Passmore +44 (0) 20 7905 8500
Hamish Clegg
Canaccord Genuity (North American Advisor)
Simon Akit +1 416 869 3820
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
About Eco Atlantic:
Eco Atlantic is a TSX-V and AIM quoted 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 ExxonMobil and Hess
Corporation's Stabroek Block, on which thirteen discoveries have
been announced and over 6 Billion BOE of oil equivalent recoverable
resources are estimated. First oil production is expected from the
deep-water Liza Field in 2020.
Jethro-1 was the first major oil discovery on Orinduik Block.
The Jethro-1 encountered 180.5 feet (55 meters) of net high-quality
oil pay in excellent Lower Tertiary sandstone reservoirs which
further proves recoverable oil resources. Joe-1 is the second
discovery on the Orinduik Block and comprises high quality
oil-bearing sandstone reservoir with a high porosity of Upper
Tertiary age. The Joe-1 well encountered 52 feet (16 meters) of
continuous thick sandstone which further proves the presence of
recoverable oil resources.
In Namibia, the Company holds interests in four offshore
petroleum licences totalling approximately 25,000km(2) with over
2.3bboe 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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