Saturday, March 25, 2023

Eco Atlantic closes financial year with strong balance sheet amid Guyana prospects

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Eco (Atlantic) Oil & Gas Ltd (AIM: ECO, TSX-V: EOG) announced Tuesday that it has ended the financial year with cash and cash equivalents of CAD 25.0 million. As of 31 March 2019, Eco had total assets of CAD 26.7 million, total liabilities of CAD 1.6 million and total equity of CAD 25.1 million.

The Company completed the financial year with a net profit of CAD 4.2 million. This resulted primarily from the Total E&P Activités Pétrolières farm-in on the Orinduik Block completed in November 2018 pursuant to which Eco received CAD 16.6 million (USD 12.5 million).

On February 20, Eco announced that, along with its partners, Total and Tullow, it contracted the Stena Forth, a sixth-generation drillship from Stena Carron Drilling Limited, to drill the Jethro-Lobe prospect on the Orinduik Block. Then on March 29, the Company announced that it had approved the drilling budget for the second well on the Orinduik Block. The net cost of the second well, named the Joe prospect, is expected to be approximately USD 3 million. The Joe prospect will be drilled using the Stena Forth and is estimated to hold 150mmbbl of gross prospective resources with the ‘chance of success’ estimated to be 43.2%.

“We completed our financial year with a strong balance sheet and very positive results for the period. Combined with the recent private placement, we now have CAD 39.7 million in cash and cash equivalents, which allows us to drill our first two wells on the Orinduik Block offshore Guyana in 2019 plus up to an additional six wells,” commented Gil Holzman, President and Chief Executive Officer of Eco Atlantic.

Qatar Petroleum Farm-in

Qatar Petroleum said on Monday that it had entered into an agreement with Total for a share of exploration and production rights in two blocks offshore Guyana. Under the agreement, which is subject to customary regulatory approvals by the government of Guyana, Qatar Petroleum will hold 40% of Total’s existing 25% participating interest in the Orinduik block.

“We are very pleased to welcome yet another very strong partner such as Qatar Petroleum into the block,” Holzman said.

Director of Guyana’s Department of Energy, Dr. Mark Bynoe had told reporters on Monday that the farm-in deal remains ‘substantially unclear’ and authorities were still studying the transaction.

Holzman said Eco looks forward to updating the market with the results from Jethro Lobe in the coming weeks, the spudding of Joe and the results from its second well thereafter. “There is no doubt that a success on either of the two wells would be a transformational event for the Company and would put Eco in an exceptionally strong position to maximise shareholder value,” he stated.

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