Eco Atlantic Provides Operational Update

(Eco Atlantic, 31.Aug.2021) — Eco (Atlantic) Oil & Gas Ltd. (AIM: ECO, TSX‐V: EOG) announced its results for the three months ended 30 June 2021, alongside a corporate and operational update. 

Results Highlights:

Financials:

— Cash and cash equivalents of $4.85mn (including restricted deposits) and no debt as of 30 June 2021. 

— Raised $4.9mn in the form of a private placement in July 2021.

— Total assets of $17.9mn, total liabilities of $2.7mn and total equity of $15.2mn as of 30 June 2021 (click here for link to associated financial tables).

Operations:

— Orinduik Block offshore Guyana – all seismic data reprocessing completed and multiple light sweet oil drilling prospects are being reviewed by Eco and its licence partners (the “JV Partners”), with high-graded candidates being considered for the 2022 drilling programme. The intention is to provide further definition to the upper and lower Cretaceous interpretation and target selection for drilling. Target selection is expected in Q3 2021.

— Continuing to evaluate additional asset opportunities in both West Africa and South America with its strategic partner and substantial shareholder Africa Oil Corp – focus on near-term high-impact exploration opportunities.

—  Closed transaction (28 June 2021) with JHI Associates Inc., a private company and holder of 17.5% working interest (WI) in the Canje Block offshore Guyana, to acquire up to a 10% interest in JHI on a fully diluted basis (the “JHI Transaction”) and appointment of Keith Hill, a non-executive Director of the Company, to the board of directors of JHI.

– The JHI Transaction increases Eco Atlantic’s presence in the Guyana-Suriname basin, increasing its Guyana acreage exposure from 1,800 km2 to 6,600 km2 and providing exposure to near-term drilling, with one well drilled subsequent to the JHI Transaction on the Canje Block, Jabillo-1, and further well, Sapote-1, now drilling, and at least one planned on the Orinduik Block in 2022, subject to partner approval.

– Received a detailed update from JHI regarding the Jabillo-1 well in the Canje Block, offshore Guyana on 5 July 2021, which reached its planned target depth and was evaluated, but did not show evidence of commercial hydrocarbons.

ExxonMobil spud the Sapote-1 well on the Canje block, offshore Guyana, on 29 August 2021, which is expected to reach target depth within 60 days. The Sapote-1 well is the second well in the drilling programme, following the Jabillo-1 well.

Outlook:

Guyana

— Guyana continues to be one of the most prolific exploration regions in the world, with over nine billion barrels of oil discovered in the last five years. Eco and the JV Partners* have already delivered two substantial oil discoveries on the Orinduik Block and the Block continues to offer significant upside potential. With the recent increase in oil prices, the JV Partners will revisit the Jethro discovery commercialisation potential.

— As previously reported, Eco is fully funded for further planned / near term drilling on the Orinduik Block and, with its JV Partners, is assessing all opportunities available to drill at least one exploration well into the light oil cretaceous stacked targets as soon as practical. The Company is fully aligned with its JV Partners on careful target selection for the next drilling campaign, based on the reprocessed 3D seismic data on the block and nearby oil discoveries. Eco expects to be able to update the market on further drilling plans later in Q3 2021.

— Posted by the Environmental Protection Agency (EPA) Guyana on 8 August 2021, ExxonMobil applied for environmental authorisation for a 12-well Exploration and Appraisal Drilling Programme in the Canje Block, offshore Guyana in 2022.  

— The JHI Transaction provides the company with immediate exposure to an active drilling programme in the Canje Block offshore Guyana. JHI updated Eco on 29 August 2021 that the Block Operator ExxonMobil confirmed the spud of a second exploration well, Sapote-1. The well operations is planned to take up to 60 days.

*The Orinduik Block JV partners are Eco Atlantic (15% WI), Tullow Guyana B.V. (Operator, 60% WI) and TOQAP Guyana B.V. (25% WI) a company jointly owned by TotalEnergies E&P Guyana B.V. (60%) and Qatar Petroleum (40%).

Namibia

— The company’s licences in Namibia cover approximately 28,593 km2, with over 2.362 BBOE of prospective P50 resources.

— Eco has a strategically significant acreage position in-country and is progressing its various work programmes across its four blocks offshore Namibia. The company has witnessed considerable interest from multiple international oil companies in Namibia.

— The company continues to monitor upcoming drilling activity in the region, two high impact deepwater wells in southern Namibia, operated by TotalEnergies and Shell respectively have been confirmed to commence in Q4 2021. 

— TotalEnergies Venus-1 well using the Maersk Venturer was pushed back in 2020 and now expected to spud in Q4 2021.  It was reported on 17 August 2021, Shell Namibia have awarded the Valaris DS-10 the contract to drill Graff-1 well, expected to start in Q4 2021 with an estimated duration of 60 days.       

Solear Ltd. 

Solear, a majority owned subsidiary of Eco, is an independent renewable energy company focused on grid-scale solar development projects in southern Europe.

— Solear’s near-term objective is to develop its pipeline of solar assets with competitive rates of return through acquisition, development, and construction of solar assets, led by an experienced renewable energy team.

Corporate:

— Throughout the ongoing COVID-19 pandemic, Eco has prioritised the welfare of its employees and partners.

— The company continues to keep 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:  

“It has been a busy period for Eco as we endeavour to realise significant value for shareholders from our world-class asset base. The JHI transaction ensured we have a near-term catalyst for potential drilling success and demonstrated our commitment to expanding our presence in Guyana, a proven and prolific hydrocarbon basin. We look forward to updating the market in due course on results from the Sapote-1 well and on timing of further drilling on the Orinduik Block, as we increase our presence and collaboration in the Guyana-Suriname Basin.

With regard to the rest of our portfolio, we are excited about the outlook for the company’s significant acreage in Namibia, as we continue to make progress across our four licences and await the two high-impact wells to be drilled by TotalEnergies and Shell in Q4 this year. We remain committed to delivering exploration success in Namibia and will update stakeholders in due course.

We are upbeat about the company’s prospects for the rest of 2021 and are well placed to deliver long-term success into next year. We look forward to updating all stakeholders as we move forward.”   

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