TIDMECO
RNS Number : 7871C
Eco (Atlantic) Oil and Gas Ltd.
25 February 2022
25 February 2022
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 2021
Corporate and Operational Update
Eco (Atlantic) Oil & Gas Ltd. (AIM: ECO, TSX -- V: EOG) ,
the oil and gas exploration company with licences in the proven oil
provinces of Guyana and Namibia, is pleased to announce its results
for the three and nine months ended 31 December 2021, alongside a
corporate and operational update.
Results Highlights:
Financials:
-- Cash and cash equivalents of US$5.8 million and no debt as of 31 December 2021.
-- Total assets of US$19million, current liabilities of US$2
million and total equity of US$17 million as of 31 December
2021.
Operations during and post-period end:
Guyana
-- The Company purchased an additional 800,000 common shares in
JHI Associates Inc. ("JHI") in return for 1,200,000 new common
shares in Eco ("Consideration Shares"). The purchase of the 800,000
common shares in JHI completed on 19 January 2022, increasing the
total number of shares held by Eco in JHI to 5,800,000 shares
representing c.7.35% of JHI.
-- On the Canje Block, Guyana, Eco received a detailed update
from JHI Associates Inc. on 30 October 2021 that ExxonMobil had
successfully and safely drilled the Sapote-1 well. The well
recorded hydrocarbon shows while drilling and in the logging
sequence, in a deeper interval than anticipated, but had no shows
in the upper primary objective horizon. With sidewall coring and
wireline logging complete, ExxonMobil will now work to define the
reservoir properties, including porosity and permeability, and the
cored samples will be analysed for hydrocarbons.
-- On the Orinduik Block, the JV Partners (Eco Atlantic (15%
working interest ("WI")), Tullow Guyana B.V. ("Tullow") (Operator,
60% WI) and TOQAP Guyana B.V. ("TOQAP") (25% WI)) are advancing
towards finalisation of the target selection process and updating
the drilling targets inventory. The partnership aims to establish
firm targets in the near-term and advance towards drilling.
Namibia and South Africa
-- On 10 January 2022, Eco announced this signing of a binding
Memorandum of Understanding ("MOU") to acquire 100% of Azinam Group
Limited ("Azinam") (the "Acquisition"), including Azinam's entire
offshore asset portfolio, in return for a 16.5% equity stake in Eco
(as enlarged by the associated share issuance). Subsequent to this,
Eco reported the signing of a definitive Share Purchase Agreement
("SPA") with Azinam on 8 February 2022, which, pending TSX-V
approval, is anticipated to lead to the Closing of the transaction
imminently.
-- Eco is now planning and preparing the drilling of an
exploration well on Block 2B in H2 2022, a highly prospective Block
with past oil discovery (AJ-1) in the Orange Basin, offshore South
Africa, close to the recent Graff-1 discovery by Shell and Qatar
Energy.
-- In October 2021, Eco completed drafting the four new Joint
Operating Agreements ("JOAs") for its new 2021 Petroleum Licenses
in the Walvis Basin, offshore Namibia. The Company has received all
paying partner approvals on the JOAs and Namibia's Ministry of
Mines and Energy has approved Eco Atlantic to be the Operator of
all four blocks, which total some 7,065,484 acres (28,593 km(2)
).
-- The Company continues to monitor and assess opportunities,
both technical and corporate, particularly with the recent Shell
Namibia's Graff-1 and TotalEnergies Venus-1 discoveries in the
Orange Basin.
Solear Ltd.
-- On 24 February 2021, Eco was pleased to announce the
successful sale of the Kozani project in Greece by Solear Ltd.
("Solear") at 25% margin and for US$2 million to Nepcoe Capital
Partners Ltd ("Nepcoe") and the re-payment of this consideration to
Eco Atlantic will be received by the end of February 2022.
Outlook:
Guyana
-- Eco continues to work closely with its JV Partners on the
Orinduik Block with regard to carrying out further drilling
activity on the licence as soon as practically possible. The
Partners will likely look to drill at least one of the light oil
cretaceous stacked targets after the target selection process is
finalised.
-- Guyana continues to be one of the most prolific exploration
regions in the world, with over ten billion barrels of oil
discovered in the last six years.
-- Eco are encouraged by recent neighbouring discoveries -
ExxonMobil operated Stabroek block Fangtooth-1 discovery in deeper
intervals and Santonian sands similar to the shows seen in Sapote-1
well Canje block and by CGX Energy operated Corentyne block,
confirming a discovery at the Kawa-1 wildcat, a shelf discovery
which is on trend geologically with the Orinduik block.
Namibia and South Africa
-- The Company's licences in Namibia cover approximately 28,593
km(2) , with over 2.362 BBOE of prospective P50 resources.
-- With the addition of Azinam's offshore portfolio, Eco has
expanded upon its strategically significant acreage position
in-country and is progressing its various work programmes across
its Namibian licences. With the recently announced discoveries at
the Graff-1 and Venus-1 the Company continues to witness
considerable interest in Namibia from multiple international oil
companies.
-- Eco is now planning and preparing the drilling of an
exploration well on Block 2B in H2 2022, subject to available
funding, a highly prospective Block with past oil discovery (AJ-1)
in the Orange Basin, rig contract execution expected in the next
month along with commencing orders of long lead items. Once the
Azinam deal has closed, Eco will become the official operator of
the Block.
Corporate:
-- Eco continues to evaluate additional asset and corporate
opportunities in and around its current areas of operation, with an
overarching aim of building Eco into an exploration business of
material scale.
-- Eco also maintains a strict control over costs throughout the
business, which continues to generate material savings, ensuring
that Eco remains well capitalised with a strong balance sheet.
Gil Holzman, President and Chief Executive Officer of Eco
Atlantic, commented:
"I am excited about the positive and busy start to the year we
have made. We announced a transformational deal with the purchase
of Azinam's offshore acreage, which will add to our highly
strategic acreage position in Namibia and allow us entry into
Orange Basin, South Africa. Two important large discoveries
offshore Namibia has already been announced this year on trend with
our new Orange basin blocks, and our team is working hard on the
upcoming drilling campaign on Block 2B in H2 2022 and furthering
their technical understanding on Block 3B4B which is geologically
on same pathway with Graff-1 and Venus-1.
"We also increased our interest in JHI, via an additional share
swap, reinforcing our view that Guyana remains one of the most
attractive hydrocarbon provinces in the world. We look forward to
announcing our future drilling plans in due course, as we work with
our JV Partners on finalising the target selection and drilling
plans.
"We were also pleased to play a role in the sale of Solear's
Kozani project in Greece for c.US$2 million, which generated a 25%
return for Eco shareholders and will now be returned to Eco's
treasury.
"Eco continues to assess both asset and corporate opportunities,
as well as a number of meaningful catalysts that have the potential
to deliver value for all stakeholders, and we look forward to
updating the market further in due course."
The Company's unaudited financial results for the three and nine
months ended 31 December 2021, together with Management's
Discussion and Analysis, 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 US Dollars, unless
otherwise stated.
Balance Sheet
December March 31,
31,
----------------------------------------------------
2021 2021
---------------------------------------------------- ------------------------- --------------------
Unaudited Audited
------------------------- --------------------
Assets
Current assets
Cash and cash equivalents 5,234,103 11,807,309
Short-term investments 52,618 1,552,640
Government receivable 10,253 22,697
Amounts owing by license partners, net 394,839 193,655
Accounts receivable and prepaid expenses 106,261 46,480
---------------------------------------------------- ------------------------- --------------------
5,798,074 13,622,781
Investment in associate 10,000,000 -
Petroleum and natural gas licenses 1,072,260 1,072,260
Renewable energy licenses 1,364,841 1,411,186
Right of use assets 321,653 332,495
Security deposit 471,380 490,455
---------------------------------------------------- ------------------------- --------------------
Total Assets 19,028,208 16,929,177
---------------------------------------------------- ------------------------- --------------------
Liabilities
Current liabilities
Accounts payable and accrued liabilities 646,719 501,022
Advances from and amounts owing to license
partners, net - 97,153
Short-term portion of lease liability 22,987 22,987
----------------------------------------------------
Total current liabilities 669,706 621,162
Warrant liability 1,047,512 -
Lease liability 334,452 325,917
----------------------------------------------------
Total liabilities 2,051,670 947,079
---------------------------------------------------- ------------------------- --------------------
Equity
Share capital 61,070,124 59,099,725
Restricted Share Units reserve 267,669 267,669
Stock options 2,663,057 2,675,724
Foreign currency translation reserve (1,171,172) (1,198,097)
Non-controlling interest - (48,674)
Accumulated deficit (45,853,140) (44,814,249)
---------------------------------------------------- ------------------------- --------------------
Total Equity 16,976,538 15,982,098
---------------------------------------------------- ------------------------- --------------------
Total Liabilities and Equity 19,028,208 16,929,177
---------------------------------------------------- ------------------------- --------------------
Income Statement
Three months ended Nine months ended
December 31, December 31,
-------------------------------------------- --------------------------------------------
2021 2020 2021 2020
--------------------- --------------------- --------------------- ---------------------
Unaudited Unaudited
-------------------------------------------- --------------------------------------------
Revenue
Interest income - 6,123 8,435 41,779
--------------------- --------------------- --------------------- ---------------------
- 6,123 8,435 41,779
Operating expenses :
Compensation
costs 128,724 173,373 712,991 486,999
Professional
fees 91,355 80,280 514,378 200,694
Operating costs 660,170 255,477 1,139,962 1,105,892
General and
administrative
costs 121,569 138,472 430,926 367,742
Share-based
compensation 2,373 33,457 14,083 88,277
Interest expense 8,828 - 19,341 -
Foreign exchange
gain
(loss) (12,235) (32,561) 40,987 (68,826)
--------------------- ---------------------
Total operating expenses 1,000,784 648,498 2,872,668 2,180,778
--------------------- --------------------- --------------------- ---------------------
Fair value
change in
warrant
liability (1,236,827) - (1,874,016) -
Net profit (loss) for
the period 236,043 (642,375) (990,217) (2,138,999)
Foreign currency
translation
adjustment 35,160 - 26,925 (87,942)
Comprehensive profir
(loss) for the period 271,203 (642,375) (963,292) (2,226,941)
--------------------- --------------------- --------------------- ---------------------
Basic and diluted net
loss per share
attributable
to equity holders of
the parent 0.00 (0.00) (0.01) (0.01)
===================== ===================== ===================== =====================
Weighted average number
of ordinary shares used
in computing basic and
diluted net loss per
share 199,893,636 184,697,723 194,041,560 184,697,723
===================== ===================== ===================== =====================
Cash Flow Statement
Nine months ended
December 31,
-----------------------------------------
2021 2020
Unaudited
-----------------------------------------
Cash flow from operating activities
Net loss from operations (990,217) (2,138,999)
Items not affecting cash:
Share-based compensation 14,083 88,277
Depreciation and amortization 57,187 -
Accrued interest 8,535 -
Revaluation of warrant liability (1,874,016) -
Changes in non--cash working capital:
Government receivable 12,444 (20,007)
Accounts payable and accrued liabilities 145,697 (130,818)
Accounts receivable and prepaid expenses (59,781) (26,726)
Advance from and amounts owing to license
partners (298,337) (135,313)
------------------------------------------------ ------------------- --------------------
(2,984,405) (2,363,586)
------------------------------------------------ ------------------- --------------------
Cash flow from investing activities
Investment in associate (10,000,000) -
Short-term investments 1,500,022 -
------------------------------------------------ --------------------
(8,499,978) -
------------------------------------------------ ------------------- --------------------
Cash flow from financing activities
Issuance of shares 4,793,789 -
Exercise of stock options 71,388 -
4,865,177 -
------------------------------------------------ ------------------- --------------------
Decrease in cash and cash equivalents (6,619,206) (2,363,586)
Foreign exchange differences 46,000 46,660
Cash and cash equivalents, beginning of period 11,807,309 18,667,016
------------------------------------------------ ------------------- --------------------
Cash and cash equivalents, end of period 5,234,103 16,350,090
------------------------------------------------ ------------------- --------------------
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, 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
Rory Murphy
James Bellman
Berenberg (Broker) +44 (0) 20 3207 7800
Emily Morris
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 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 consuming oil and gas in
stable emerging markets near to infrastructure.
Offshore Guyana in the proven Suriname-Guyana Basin, the Company
holds a 15% Working Interest in the 1,800 km (2) Orinduik Block
Operated by Tullow Oil, and also indirectly through a 6.4%
shareholding in JHI Associates Inc. a private company which holds a
17.5% WI in the 4,800km (2) Canje Block Operated by ExxonMobil. In
Namibia, the Company holds Operatorship and 85% Working Interests
in four offshore Petroleum Licences: PEL's:
97, 98, 99 and 100 totalling 28,593 km (2) in the Walvis Basin.
Offshore South Africa, Eco holds Operatorship and 50% WI of
Block 2B, and 20% Working Interest of Blocks 3B/4B and Nearshore
3B/4B, totalling some 21,603 km (2) .
Eco Atlantic is also a 100% shareholder in Solear Ltd., Solear
is an independent private clean energy investment company focused
on low cost, high yield solar development projects in southern
Europe.
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END
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