TIDMECO
RNS Number : 3603U
Eco (Atlantic) Oil and Gas Ltd.
01 August 2022
01 August 2022
ECO (ATLANTIC) OIL & GAS LTD.
("Eco," "Eco Atlantic," "Company," or together with its
subsidiaries, the "Group")
Full Year Results 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 year
ended 31 March 2022.
Results Highlights:
Financials
-- As at 31 March 2022, the Company had cash and cash equivalents of US$3,403,885 and no debt.
-- As at 31 March 2022, the Company had total assets of US$45.9
million, total liabilities of US$5.6 million and total equity of
US$40.2 million.
-- In April and June 2022, post period end, Eco successfully
raised combined gross proceeds of US$37.8 million to fund its
ongoing workstreams, with the Company's cash balance as at 29 July
2022 being US$37.7 million.
Corporate
-- During the period, Eco announced a number of strategic
acquisitions and/or investments in line with the Company's strategy
to expand its high impact exploration portfolio and deliver
stakeholder value:
o The acquisition of 100% of Azinam Group Limited ("Azinam"),
including Azinam's entire offshore asset portfolio in Orange Basin
South Africa and Namibia, in return for a 16.5% equity stake in the
enlarged Group. This transaction completed on 11 March 2022 and was
formally approved by the TSXV on 11 May 2022.
o The acquisition of an additional 6.25% Participating Interest
in Block 3B/4B, Orange Basin offshore South Africa, for a
consideration of US$10 million, which would provide the Company
with a total 26.5% interest in the Block. The Company is awaiting
satisfaction of the conditions precedent to completion of this
transaction, including regulatory approval, and further
announcements will be made in due course.
o On 14 March 2022, the strategic acquisition of JHI Associates
Inc. ("JHI"), including JHI's 17.5% Working Interest ("WI") in the
Canje Block offshore Guyana, was announced, however, on 14 June
2022 this transaction was terminated,. Eco remains a significant
shareholder in JHI with a holding of 7.3% (with an option to
increase its shareholding to 11%).
Operations
-- On 21 March 2022, Eco announced an updated Competent Person's
Resource Report ("CPR") on its assets offshore Guyana, Namibia and
South Africa.
-- The report highlights Attributable Best Estimate, Prospective Resources:
o Guyana (Orinduik Block) - Net to Eco 681 mmbbls Oil and 544
BCF Gas
o South Africa (Blocks 2B & 3B/4B) - Net to Eco 864 mmbbls
Oil and 309 BCF Gas
o Namibia (4 Blocks) - Net to Eco 6,705 mmbbls Oil and 6,565 BCF
Gas
-- Further details of the CPR can be found on the Company's website.
South Africa - Block 2B
-- Block 2B Joint Venture partners have entered into a drilling
contract for the Island Innovator semi-submersible rig with Island
Drilling Company AS for the upcoming drilling of the Gazania-1
well, offshore South Africa.
-- The well will be drilled 25km offshore in 150 meters of water
to a depth of approximately 2,800 meters to target a stacked pay
section up dip of the AJ-1 discovery and in the proven oil
horizon.
-- The JV partners remain on track to drill this significant
well in Q3 2022, with the rig anticipated to mobilise on or around
8 August 2022 and spud expected during September 2022. The Company
plans to seal and plug the well after the test with no remaining
equipment left on the sea floor, and further updates on the well
spud will be made in due course.
South Africa - Block 3B/4B
-- Eco holds a 20% Participating Interest in Block 3B/4B, which
is located between 120-250kms offshore South Africa in the Orange
Basin directly south of the multibillion barrels discoveries
offshore Namibia announced earlier this year by Shell (Graff-1) and
TotalEnergies (Venus-1) and has announced the acquisition of a
further 6.25% interest, which remains subject to completion.
-- The Block Partners are currently finalising the reprocessing
of a large 3D seismic survey that will be used to high-grade leads
towards identifying drilling targets and preparing for a potential
drilling campaign next year.
-- As noted above, further announcement(s) will be issued
following receipt of government and/or regulatory approvals in
respect of the acquisition of a further 6.25% interest in the
Block.
Guyana - Orinduik Block
-- The block partners are currently further defining the
Orinduik geological modeling, prospects maturation and upgrading of
the drilling targets inventory in an ongoing process. The intent is
to provide further definition to the light oil Cretaceous targets'
selection for drilling in the next drilling campaign.
Guyana - Canje Block
-- Following termination of the proposed acquisition of JHI, Eco
retains an indirect ownership of an interest in the Canje Block
offshore Guyana though a 7.3% ownership in JHI.
-- On July 5, 2021, the Company announced that it received a
detailed update from JHI Associates Inc. The Jabillo-1 well in the
Canje Block, offshore Guyana, reached its planned target depth and
was evaluated but did not show evidence of commercial hydrocarbons.
Jabillo-1 was plugged and abandoned. ExxonMobil (the Block
operator) have filed for environmental permit to drill up to an
additional 12 exploration wells on the Canje Block over the course
of 2023 and 2024
Namibia
-- The Company holds four offshore petroleum licenses in the
Republic of Namibia being petroleum exploration license number 097
(the "Cooper License"), petroleum exploration license number 098
(the "Sharon License"), petroleum exploration license number 099
(the "Guy License") and petroleum exploration license number 100
(the "Tamar License"), (together the ""Namibia Licenses").
-- Eco has a strategically significant acreage position
in-country and is progressing its various work programmes across
its four blocks offshore Namibia.
Solear Ltd. (formerly Eco Atlantic Renewables [post period
end])
-- On January 26, 2021, the Company announced the formation of a
new company to source, acquire and develop an exclusive pipeline of
potential high yield solar energy projects.
-- On January 29, 2022, the Company approved to sell the Kozani
project in Greece and discontinue the renewable energy business to
focus entirely on oil and gas exploration, subsequently announcing
on 24 February 2022 that it had entered into an agreement for the
sale of the asset. As such, all the assets and liabilities relating
to the Kozani project have been reclassified to discontinued
operations.
-- The Company is awaiting receipt of the balance of
consideration due from the acquiror in respect of this disposal,
having received to date EUR120,000, and accordingly retains
ownership of the asset. However, the acquiror has confirmed its
commitment to completing the acquisition and the Company is
considering a legal claim in the event that the consideration is
not received in the coming months.
Outlook:
Guyana
-- Guyana continues to be one of the most prolific exploration
regions in the world, with approximately 11 billion barrels of oil
discovered in the last six years. Eco and its JV partners have
already delivered two substantial oil discoveries on the Orinduik
Block and the licence continues to offer significant upside
potential. With the increase in oil prices the JV partners are
revisiting the Jethro discovery commercialisation potential.
-- As previously reported, Eco and its JV partners are committed
to further drilling on the Orinduik Block and, with its JV
partners, are assessing all opportunities available to drill at
least two exploration wells into the light oil cretaceous targets
as soon as practical. The Company is fully aligned with its JV
partners on careful target selection based on the reprocessed 3D
and the block and nearby oil discoveries for the next drilling
campaign and Eco expects to be able to update the market on further
drilling plans in due course.
-- Further updates on the Canje Block will be issued in due course.
The Orinduik JV partners are Eco Atlantic (15% working interest
("WI")), Tullow Guyana B.V. ("Tullow") (Operator, 60% WI) and TOQAP
Guyana B.V. ("TOQAP") (25% WI) a partnership between TotalEnergies
E&P Guyana B.V. and Qatar Energy.
Namibia
-- During the period, two significant hydrocarbon discoveries
were made offshore Namibia. TotalEnergies reported a significant
discovery of light oil with associated gas on the Venus prospect,
located in block 2913B in the Orange Basin. The National Petroleum
Corporation of Namibia ("Namcor") also reported on behalf of the
Block 2913A JV Partners, Shell and Qatar Energy, a play opening
light oil discovery at its Graff prospect in both the primary and
secondary targets.
-- Both discoveries, combined with further drilling plans
offshore Namibia, have had a material impact on interest in
hydrocarbon exploration in the region. Eco is witnessing
considerable interest in its licences and is currently assessing
options as to how best move forward with progressing exploration
and commercial activity on them.
Total Voting Rights
It is noted that, pursuant to a historic amalgamation with Pan
African Oil Limited ("PAO") within the Group, effected in January
2015, 841,824 outstanding common shares in the Company have now
been cancelled as a result of such shares having not been claimed
by certain vendors of PAO. Following this share cancellation, the
issued share capital and total voting rights of the Company is
344,022,014 Common Shares. The above figure may be used by
shareholders as the denominator for the calculations by which they
will determine if they are required to notify their interest in, or
a change to their interest in, the share capital of the
Company.
Gil Holzman, President and Chief Executive Officer of Eco
Atlantic, commented:
"The past 12 months have seen us make considerable progress as a
business, increasing our geographic footprint and overall acreage
considerably, growing the company in some of the most active and
exciting oil and gas exploration regions on the globe. This,
combined with the improved commodity price conditions, means that
interest in exploration activity in the areas where Eco has
strategically important acreage has increased significantly.
"Our acquisition of Azinam has paved the way for our exciting
near-term drilling campaign at Block 2B, offshore South Africa. The
Gazania-1 well, in which we hold a 50% WI, is targeting a 300
million barrel light oil resource, which, if successful, would be
transformational for Eco and the partners on the Block. We remain
on track to spud the well in September with the rig mobilising from
Norway in the next two weeks and we will provide updates as
appropriate. At 3B/4B, we chose to increase our acreage position,
as we believe that the licence holds significant potential, and we
look forward to disclosing further progress on this licence in the
medium term. Namibia has witnessed some of the largest hydrocarbon
discoveries made in the world this year, making our strategic
acreage in country highly valuable. As one of the largest licence
holders in the region, we believe that we will be able to progress
our operations in a swift manner.
"In Guyana, we continue to benefit from our interest in the
Canje Block, via Eco's ca.7.3% holding in JHI. The licence remains
highly prospective and following the drilling of two wells in 2021,
ExxonMobil and the licence partners are currently evaluating next
steps. At Orinduik, alongside our partners on the block, we are
further defining the geological modeling, prospects maturation and
upgrading of the light oil drilling targets inventory, ahead of
final target selection for drilling in the next campaign. We look
forward to updating our stakeholders on the campaign in the near to
medium term while we are making preparations to enter into the next
exploration phase under the Orinduik Petroleum Agreement.
"Following the targeted completion of the sale of the Kozani
Photovoltaic Park for a total of EUR1.8 million in the coming
months, the Company will be exclusively focused on high impact oil
and gas exploration projects and on progressing its near-term
drilling opportunities offshore South Africa, Namibia and
Guyana.
"Given the significant corporate activity over the last 12-18
months, as a Company we remain very positive about what the future
holds and our ability to generate returns for all our stakeholders.
The Company possesses highly strategic acreage in exploration hot
spots, a robust balance sheet with over US$37m in cash, an
entrepreneurial and ambitious management team, and the potential
for considerable operational catalysts that can create material and
sustainable value for shareholders. As ever, we are excited about
what the coming months will bring and look forward to updating the
market on our progress over the coming months."
The Company's audited financial results for the year ended 31
March 2022, together with Management's Discussion and Analysis as
at 31 March 2022, 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.
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
March 31, March 31,
--------------------------------------------------
2022 2021
-------------------------------------------------- ------------------------- --------------------
Assets
Current assets
Cash and cash equivalents 3,438,834 11,807,309
Short-term investments (Note 6) 52,618 1,552,640
Government receivable 27,487 22,697
Amounts owing by license partners, net - 193,655
Accounts receivable and prepaid expenses
(Note 7) 257,911 46,480
Assets held for sale (Note 11) 2,061,734 -
-------------------------------------------------- ------------------------- --------------------
5,838,584 13,622,781
Investment in associate (Note 8) 9,277,162 -
Petroleum and natural gas licenses (Note
10) 30,753,034 1,072,260
Renewable energy licenses (Note 11) - 1,411,186
Right of use assets (Note 9) - 332,495
-------------------------------------------------- ------------------------- --------------------
Total Assets 45,868,780 16,929,177
-------------------------------------------------- ------------------------- --------------------
Liabilities
Current liabilities
Accounts payable and accrued liabilities 1,931,823 501,022
Advances from and amounts owing to license
partners, net - 97,153
Short-term portion of lease liability - 22,987
Current liabilities related to assets held 473,254 -
for sale
Warrant liability 3,241,762 -
--------------------------------------------------
Total current liabilities 5,646,839 621,162
Lease liability - 325,917
--------------------------------------------------
Total liabilities 5,646,839 947,079
-------------------------------------------------- ------------------------- --------------------
Equity
Share capital 63,141,609 59,099,725
Shares to be issued 20,766,996 -
Restricted Share Units reserve 267,669 267,669
Warrants 7,806,000 -
Stock options 958,056 2,675,724
Foreign currency translation reserve (1,309,727) (1,198,097)
Non-controlling interest - (48,674)
Accumulated deficit (51,408,662) (44,814,249)
-------------------------------------------------- ------------------------- --------------------
Total Equity 40,221,941 15,982,098
-------------------------------------------------- ------------------------- --------------------
Total Liabilities and Equity 45,868,780 16,929,177
-------------------------------------------------- ------------------------- --------------------
Income Statement
Year ended
March 31,
------------------------------------------------
2022 2021
------------------------- ---------------------
Revenue
Interest income 3,556 47,097
------------------------- ---------------------
3,556 47,097
Operating expenses :
Compensation costs 852,383 712,667
Professional fees 551,751 501,349
Operating costs 1,932,826 1,659,029
General and administrative costs 603,145 500,720
Share-based compensation 14,495 144,327
Interest expense - 2,275
Foreign exchange gain (116,631) 11,015
------------------------- ---------------------
Total operating expenses 3,837,969 3,531,382
------------------------- ---------------------
Operating loss (3,834,413) (3,484,285)
Fair value change in warrant liability (263,136) -
Share of losses of company accounted for (1,154,838) -
at equity
------------------------- ---------------------
Net loss for the year from continuing
operations (5,252,387) (3,484,285)
Loss from discontinued operations, after-tax (1,304,937) (195,522)
Net loss for the year (6,557,324) (3,679,807)
Foreign currency translation adjustment (111,630) (80,238)
Comprehensive loss for the year (6,668,954) (3,760,045)
------------------------- ---------------------
Net loss for the year attributed to:
Equity holders of the parent (6,557,324) (3,631,133)
Non-controlling interests - (48,674)
------------------------- ---------------------
(6,557,324) (3,679,807)
========================= =====================
Basic and diluted net loss per share attributable
to equity holders of the parent (0.03) (0.02)
========================= =====================
Weighted average number of ordinary shares
used in computing basic and diluted net
loss per share 195,869,114 184,697,723
========================= =====================
Cash Flow Statement
Year ended
March 31,
------------------------------------------
2022 2021
Cash flow from operating activities
Net loss from continuing operations (5,252,387) (3,484,285)
Net loss from discontinued operations (1,304,937) (195,522)
Items not affecting cash:
Share-based compensation 14,495 144,327
Depreciation and amortization - 24,204
Accrued interest - 2,672
Revaluation of warrant liability 263,136 -
Share of losses of companies accounted 1,154,838 -
for at equity
Changes in non--cash working capital:
Government receivable (4,790) 13,518
Accounts payable and accrued liabilities (7,279) 41,583
Accounts receivable and prepaid expenses 530,121 (218)
Reallocation to discontinued operations (317,340) -
cashflows
Net change in non-cash working capital 296,755 -
items relating to discontinued operations
Advance from and amounts owing to license
partners - (50,906)
---------------------------------------------- -------------------- --------------------
(4,627,388) (3,504,627)
---------------------------------------------- -------------------- --------------------
Cash flow from investing activities
Investment in associate (10,000,000) -
Security deposit - (490,455)
Acquisition of Liversol and Ponsol - (1,318,931)
Short-term investments 1,500,022 (1,499,903)
---------------------------------------------- --------------------
(8,499,978) (3,309,289)
---------------------------------------------- -------------------- --------------------
Cash flow from financing activities
Proceeds from private placement, net 4,793,814 -
Acquisition of Azinam 2,590 -
Exercise of stock options 74,212 -
4,870,616 -
---------------------------------------------- -------------------- --------------------
Decrease in cash and cash equivalents (8,256,750) (6,813,916)
Foreign exchange differences (111,725) (45,791)
Cash and cash equivalents, beginning of
year 11,807,309 18,667,016
---------------------------------------------- -------------------- --------------------
Cash and cash equivalents, end of year 3,438,834 11,807,309
---------------------------------------------- -------------------- --------------------
**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 Corporate Sustainability +44(0)781 729 5070
Strand Hanson Limited (Financial &
Nominated Adviser) +44 (0) 20 7409 3494
James Harris
James Bellman
Berenberg (Broker) +44 (0) 20 3207 7800
Emily Morris
Detlir Elezi
Echelon Capital (Financial Adviser
N. America Markets)
Ryan Mooney +1 (403) 606 4852
Simon Akit +1 (416) 8497776
Celicourt (PR) +44 (0) 20 8434 2754
Mark Antelme
Jimmy Lea
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 intensity oil and gas in
stable emerging markets close to infrastructure.
Offshore Guyana in the proven Guyana-Suriname Basin, the Company
holds a 15% Working Interest in the 1,800 km(2) Orinduik Block
Operated by Tullow Oil. 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 (to be increased to
a 26.25% Working Interest, subject to Completion of the Acquisition
announced 27 June 2022) in Blocks 3B/4B operated by Africa Oil
Corp., totalling some 20,643 km (2) .
Cautionary Notes:
This news release contains certain "forward-looking statements",
including, without limitation, statements containing the words
"will", "may", "expects", "intends", "anticipates" and other
similar expressions which constitute "forward-looking information"
within the meaning of applicable securities laws. Forward-looking
statements reflect the Company's current expectations, assumptions,
and beliefs, and are subject to a number of risks and uncertainties
that could cause actual results to differ materially from those
anticipated. These forward-looking statements are qualified in
their entirety by the inherent risks and uncertainties surrounding
future expectations.
Important factors that could cause actual results to differ
materially from expectations include, but are not limited to,
general economic and market factors, competition, the effect of the
global pandemic and consequent economic disruption, and the factors
detailed in the Company's ongoing filings with the securities
regulatory authorities, available at www.sedar.com . Although
forward-looking statements contained herein are based on what
management considers to be reasonable assumptions based on
currently available information, there can be no assurance that
actual events, performance or results will be consistent with these
forward-looking statements, and our assumptions may prove to be
incorrect. Readers are cautioned not to place undue reliance on
these forward-looking statements. The Company undertakes no
obligation to publicly update or revise any forward-looking
statements either as a result of new information, future events or
otherwise, except as required by applicable laws.
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END
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