TIDMECO
RNS Number : 6844W
Eco (Atlantic) Oil and Gas Ltd.
20 August 2020
20 August 2020
ECO (ATLANTIC) OIL & GAS LTD.
("Eco," "Eco Atlantic," "Company," or together with its
subsidiaries, the "Group")
Unaudited Results for the three months ended 30 June 2020
Corporate and Operational Update
Eco (Atlantic) Oil & Gas Ltd. (AIM: ECO, TSX -- V: EOG) ,
the oil and gas exploration company with license interests in
Guyana and Namibia, is pleased to announce its results for the
three months ended 30 June 2020, alongside a corporate and
operational update.
Results Highlights:
Financials
-- As at 30 June 2020, the Company had cash and cash equivalents
of US$ 17.9 million with zero debt and remains f ully funded for
its share (15% WI net) of further appraisal and exploration
drilling at Orinduik Block offshore Guyana (the "Orinduik Block")
of up to three wells at US$120M (gross).
-- As at 30 June 2020, Eco had total assets of US$19.2 million,
total liabilities of US$ 372,138 and total equity of US$18.8
million.
-- 58% cost reduction this quarter in response to COVID-19
strict cost cutting measures taken as of April 2020.
-- The Company has changed its presentation currency from
Canadian Dollars to US Dollars to better reflect the business
activities and future operations which will be predominantly in US
Dollars, and to improve investors' ability to compare the Company's
results to its industry peers.
Operations - Guyana
-- The Orinduik JV partners (the "Partners") are further
defining the Orinduik geological modeling, previous discoveries,
prospects maturation and drilling targets selection. The Partners
are also reviewing and incorporating the latest Kanuku Block
Carapa-1 light oil discovery up dip and behind Orinduik and
additional regional exploration information into the models. The
intention is to provide further definition to the Cretaceous
interpretation and target selection for drilling.
-- On 30 June 2020, the Company and its Partners on the license
approved a budget in the amount of approximately US$5 million
through to 31 December, 2020 for 3D reprocessing based on new
regional results and target selection. The Company's share of this
budget is US$750,000.
Outlook:
Guyana
-- Alongside its JV Partners, multiple drilling prospects on the
license are currently being reviewed. High-graded candidates will
be considered for the next drilling programme.
-- Eco remains fully funded for a further drilling programme on
the Orinduik Block and, subject to JV Partner approval, anticipates
drilling at least two exploration wells into light oil cretaceous
targets in 2021. Further updates on this matter will be made as
appropriate.
The Orinduik JV partners are Eco Atlantic (15% working interest
("WI")), Tullow Guyana B.V. ("Tullow") (Operator, 60% WI) and Total
E&P Guyana B.V. ("Total") (25% WI).
Namibia
-- Eco continues to benefit from a strategically significant
acreage position in-country and is progressing its various work
programmes offshore Namibia. The company is witnessing an increased
interest from multiple IOCs in Namibia.
-- The Company continues to monitor upcoming drilling activity
in the region, which could potentially see up to five exploration
wells drilled on behalf of ExxonMobil, Total, Maurel & Prom,
Shell and ReconAfrica in the next 12 months, expected to start Q4
2020.
Corporate
-- Due to the COVID-19 pandemic and lower oil price environment,
Eco took decisive action to quickly reduce costs throughout the
business.
-- The Company has decreased its total non-exploration expenses,
including general and administration expense and compensation costs
incurred during the three months ended June 30, 2020 (Q1 2021),
when compared to the three months ended March 31, 2020 (Q4 2020),
by 58%.
-- The action generated material significant savings and has
ensured the business remains well capitalised, with no debt on the
balance sheet, for its 2021 drilling and exploration plans.
Gil Holzman, President and Chief Executive Officer of Eco
Atlantic, commented:
"The Company has made significant strides towards advancing its
asset portfolio in 2020. Due to the actions taken, Eco remains well
capitalised and fully funded for a further drilling campaign in
Guyana and additional activity elsewhere.
"In Guyana, we have made excellent progress with high grading
and further defining multiple highly prospective drilling
prospects. Alongside our JV Partners, we firmly believe in the
upside potential of the Block and we look forward to recommencing
drilling activity in 2021. We look forward to updating the market
on our plans in the coming months.
"In Namibia, we continue to see increasing interest in the
country's offshore oil potential, especially with another set of
exploration wells planned by other operators over the coming 12
months. We have an important strategic acreage position offshore
Namibia and expect any successful drilling activity in the region
to benefit us.
"Despite the challenging macro backdrop, Eco has a resilient
business model and has taken decisive action to preserve the
Company's liquidity. We continue to benefit from strategically
important acreage positions in two exploration hotspots and from a
strong partnership and cooperation with our biggest shareholder
Africa Oil Corp., and I look forward to updating the market on
developments over the coming months."
The Company's unaudited financial results for three months ended
30 June 2020, together with Management's Discussion and Analysis
for the three months to 30 June 2020, 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
June 30, March 31, 2020 April 1,
2020 2019
----------------------- ------------------------- --------------------------- ---------------------------------
Unaudited Audited Audited
------------------------- --------------------------- ---------------------------------
Assets
Current assets
Cash and
cash
equivalents 17,918,133 18,667,016 18,750,453
Short-term
investments 54,900 52,737 56,098
Government
receivable 15,260 19,276 24,821
Amounts
owing by
license
partners,
net 60,966 45,596 -
Accounts
receivable
and
prepaid
expenses 48,160 46,262 60,678
----------------------- ------------------------- --------------------------- ---------------------------------
18,097,419 18,830,887 18,892,050
Petroleum and
natural
gas licenses 1,117,171 1,117,171 1,117,171
----------------------- ------------------------- --------------------------- ---------------------------------
Total Assets 19,214,590 19,948,058 20,009,221
----------------------- ------------------------- --------------------------- ---------------------------------
Liabilities
Current liabilities
Accounts
payable and
accrued
liabilities 372,138 350,242 317,548
Amounts
owing to
license
partners,
net - - 845,524
-----------------------
Total Liabilities 372,138 350,242 1,163,072
Equity
Share
capital 59,099,725 59,099,725 37,509,183
Restricted
share units
reserve 267,669 267,669 83,597
Warrants 53,026 53,026 39,570
Stock
options 2,555,467 2,542,824 2,387,837
Foreign
currency
translation
reserve (1,081,000) (1,117,859) -
Accumulated
deficit (42,052,435) (41,247,569) (21,174,038)
----------------------- ------------------------- --------------------------- ---------------------------------
Total Equity 18,842,452 19,597,816 18,846,149
----------------------- ------------------------- --------------------------- ---------------------------------
Total Liabilities
and Equity 19,214,590 19,948,058 20,009,221
----------------------- ------------------------- --------------------------- ---------------------------------
Income Statement
Three months ended
June 30,
--------------------------------------------------
2020 2019
-------------------------- ----------------------
Unaudited
--------------------------------------------------
Revenue
Interest income 28,409 126,931
-------------------------- ----------------------
28,409 126,931
Operating expenses :
Compensation costs 172,304 161,692
Professional fees 32,615 18,083
Operating costs 519,677 6,173,380
General and administrative costs 87,003 394,083
Share-based compensation 12,643 43,999
Foreign exchange (gain) loss 9,033 (36,888)
Total expenses 833,275 6,754,349
Net loss and comprehensive loss (804,866) (6,627,418)
========================== ======================
Basic and diluted net loss per share
attributable to equity holders of the
parent (0.00) (0.04)
========================== ======================
Weighted average number of ordinary
shares used in computing basic and
diluted net loss per share 184,697,723 180,184,880
========================== ======================
Cash Flow Statement
Three months ended
June 30,
----------------------------------------------------
2020 2019
------------------------------- -------------------
Unaudited
----------------------------------------------------
Cash flow from operating activities
Net loss from operations (804,866) (6,627,418)
Items not affecting cash:
Share-based compensation 12,643 43,999
Changes in non--cash working capital:
Government receivable 4,728 8,526
Accounts payable and accrued liabilities 33,469 (215,378)
Accounts receivable and prepaid
expenses - 22,866
Advance from and amounts owing to
license partners (13,280) 3,294,645
-------------------------------------------- ------------------------------- -------------------
(767,306) (3,472,760)
-------------------------------------------- ------------------------------- -------------------
Cash flow from financing activities
Net proceeds from private placement - 16,198,976
Proceeds from the exercise of stock
options - 54,104
Proceeds from the exercise of warrants - 120,388
-------------------------------------------- ------------------------------- -------------------
- 16,373,468
-------------------------------------------- ------------------------------- -------------------
Increase (decrease) in cash and cash
equivalents (767,306) 12,900,708
Foreign exchange differences 18,422 581,492
Cash and cash equivalents, beginning
of year 18,667,016 18,750,453
-------------------------------------------- ------------------------------- -------------------
Cash and cash equivalents, end of
period 17,918,133 32,232,653
-------------------------------------------- ------------------------------- -------------------
Notes to the Financial Statements
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.
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.
Change in functional currency assessment
The functional currency of the Company and its subsidiaries
represent the currency of the primary economic environment in which
each entity operates. Through to March 31, 2020, all entities were
considered to have a functional currency of Canadian Dollars. On
March 31, 2020, the Company determined the United States Dollar
("USD") to be the functional currency for Eco Guyana based on the
increased expenditures incurred in USD which is expected to
continue in the foreseeable future. On April 1, 2020, the Company
determined the USD to be the functional currency for Eco (Atlantic)
Oil and Gas Ltd, based on the increase in USD denominated spending
as of April 1, 2020. On April 1, 2020, the Company also determined
the USD to be the functional currency of Eco Guyana Oil & Gas
(Barbados) Ltd, since this entity is 100% owned by Eco Atlantic,
and is the 100% owner of Eco Guyana, both of which have functional
currencies denominated in USD. The change in estimate has been
applied on a prospective basis effective April 1, 2020.
Effective April 1, 2020, the Company also changed its
presentation currency from Canadian Dollars to USD. The change in
presentation currency is to better reflect the Company's business
activities and to improve investors' ability to compare the
Company's results to its peers. This change has been applied
retroactively as if the Company's new presentation currency has
always been the Company's presentation currency.
**S**
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 Marketing and +44(0)781 729 5070 | +1 (416)
IR 318 8272
Strand Hanson Limited (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 8434 2754
Mark Antelme
Jimmy Lea
Hannam & Partners (Research Advisor)
Neil Passmore +44 (0) 20 7905 8500
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 sixteen discoveries have
been announced and over 9 Billion BOE of oil equivalent recoverable
resources are estimated. First oil production commenced in December
2019 from the deep-water Liza Field, less than three years from
FID.
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 licenses totalling approximately 25,000km(2) with over
2.3bboe of prospective P50 resources in the Walvis Basin. These
four licenses, 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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