RNS Number : 8494H
Eco (Atlantic) Oil and Gas Ltd.
29 November 2022
 

29 November 2022

 

ECO (ATLANTIC) OIL & GAS LTD.

("Eco," "Eco Atlantic," "Company," or together with its subsidiaries, the "Group")

 

Unaudited Results for the six months ended 30 September 2022

Corporate 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 six months ended 30 September 2022 and to provide a corporate and operational update. 

 

Highlights:

 

Financials (as at 30 September 2022)

 

·    The Company had cash and cash equivalents of US$24.6 million and no debt (after paying US$11.3 million, being Eco's cash share of the Block 2B well) as of September 30, 2022.

·    The Company had total assets of US$67.3 million, total liabilities of US$5.7 million and total equity of US$61.6 million.

·    As of November 27, 2022, the Company is expected to have approximately US$17.5 million cash and cash equivalents at the end of November 2022, following receipt of the initial proceeds from the sale of the Kozani project in the coming days referred to below.

 

Corporate:

 

·    On November 28, 2022, the Company closed the sale of its 100% interest in the Kozani Photovoltaic Development Project for total cash proceeds of €2.3 million (US$2.4 million).  US$2 million is to be received by the Company by close of business on November 30, 2022, and the outstanding balance is expected to be received by year end 2022.

·    After 12 years with the Company, Eco's Non-executive Chairman, Moshe 'Peter' Peterburg has informed the Board of his plans to retire, as such, he will not stand for re-election at the upcoming Annual General Meeting on December 29, 2022, and will step down from the Company with immediate effect. The Company has commenced the process to find a replacement and, in the interim, Peter Nicol, currently a Non-executive Director, will assume the role of interim Non-executive Chairman. Further announcements will be made as appropriate.

·    With regard to the closing of the acquisition of Azinam Group Limited ("Azinam"), and in accordance with the previously announced Share Purchase Agreement, the Company will shortly issue the balance of 1,625,000 Common Shares ("Azinam Shares") to the previous shareholders of Azinam representing the full and final number of Common Shares to be issued in respect of this transaction.  These Common Shares are subject to a restrictive hold period of four months and one day (beginning on the date of issuance).  The issuance of Common Shares is subject to approval from the TSX Venture Exchange and a further announcement will be made once such approval has been received and the Common Shares issued.

 

Operations:

 

South Africa

 

Block 2B (post period end)

 

·    In early October 2022, the Island Innovator Semi-Submersible Drilling Rig arrived on Block 2B, offshore South Africa, and operations on the Gazania-1 Exploration Well commenced.

·    The well was spudded on October 10, 2022, and reached target depth of 2,360m. However, evidence of commercial hydrocarbons was not found, and the well has been plugged and abandoned.

·    The JV Partners submitted a Production Right Application to the Petroleum Agency of South Africa ("PASA") on November 15, 2022, for Block 2B, based on the existing oil discovery of AJ-1 and potential future operations.  Well logging has been completed and the JV Partners now have time to conduct further analysis and integrate the well data to allow them to determine the next steps on the Block.  

 

Block 3B/4B

 

·    The Company and its JV partners are progressing plans to conduct a two-well campaign on Block 3B/4B offshore South Africa.

·    As previously announced by the Operator of Block 3B/4B, a collaborative farm-out process (up to 55% gross WI), has been ongoing, and is now in a farm-out agreement negotiation stage. The JV partners will update the market as appropriate and should a farm-out agreement be concluded.

 

Namibia

 

·    Following recent significant hydrocarbon discoveries offshore Namibia, Eco continues to assess options for progressing exploration and commercial activity on its acreage.

·    Eco is witnessing considerable interest in its licences in Namibia and is currently assessing options, including a potential farm-out.

 

Guyana

 

·    As previously announced, Eco and its JV partners on the Orinduik Block, offshore Guyana, are currently drawing up plans to drill at least one well into light oil Cretaceous targets in the next Petroleum Agreement exploration phase which begins in 2023. Further updates will be made on this matter in due course.

 

 

Gil Holzman, President and Chief Executive Officer of Eco Atlantic, commented: 

 

"Our main focus during the period, and through to recent weeks, was to execute a safe and environmentally friendly drilling campaign on the Gazania-1 exploration well, offshore South Africa. Although it was disappointing to not announce a commercial discovery, we can be proud of how we conducted our operations, which led to the well being drilled safely and on-time. We are now working with our JV partners on the licence to analyse the well data found and plan our next steps on the Block, which we believe contains significant untapped potential.

 

On Block 3B/4B, offshore South Africa, we are making steady progress towards conducting a two well drilling campaign on the licence. The drilling preparations and program are expected to commence in 2023 and, as previously announced, a potential farm-out process is also underway on the licence. We look forward to updating the market on both of these workstreams as appropriate.

 

In Guyana, we remain highly optimistic about the potential contained within the Orinduik Block, and we are working with our JV partners to drill another well as quickly as possible. Guyana remains one of the most exciting exploration hotspots, alongside Orange Basin SA and Namibia, where we also hold a highly strategic acreage position, and we are working hard to deliver value for all our stakeholders across our asset portfolio in the near to medium term.

 

Finally, on behalf of the Board I would like to thank Moshe Peterburg for his tireless efforts during his tenure as Eco's Chairman for the past 12 years and since inception of the Company. He played a pivotal role in the development and success of the Company to date and we wish him all the best for a happy retirement and are pleased he will remain an important shareholder of Eco."

 

 

The Company's unaudited financial results for the three months ended 30 September 2022, together with Management's Discussion and Analysis as at 30 September 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.

 

 

 

Balance Sheet

 

 

          

September 30,

 

March 31,

2022

2022

 

 (Unaudited)

 

 (Audited)

Assets

 



Current Assets

 



       Cash and cash equivalents

         24,590,082

 

           3,438,834

       Short-term investments

                52,618

 

                52,618

       Government receivable

                32,656

 

                27,487

       Amounts owing by license partners, net

                13,764

 

                        -  

       Accounts receivable and prepaid expenses

           2,206,208

 

              257,911

       Assets held for sale

           2,052,326

 

           2,061,734

Total Current Assets

         28,947,654

 

           5,838,584

 




Non- Current Assets

 



    Investment in associate

           9,092,557

 

           9,277,162

    Petroleum and natural gas licenses

         29,253,034

 

         30,753,034

Total Non-Current Assets

         38,345,591

 

         40,030,196

Total Assets

 

         45,868,780

 




Liabilities

 



Current Liabilities

       Accounts payable and accrued liabilities

           3,361,588

 

           1,931,823

       Advances from and amounts owing to license partners, net

                67,406

 

                        -  

       Current liabilities related to assets held for sale

              882,959

 

              473,254

    Warrant liability

           1,395,066

 

           3,241,762

Total Current Liabilities

           5,707,019

 

           5,646,839

 

 



Total Liabilities

           5,707,019

 

           5,646,839

 




Equity

 



       Share capital

       113,930,574

 

         63,141,609

       Shares to be issued

                        -  

 

         20,766,996

       Restricted Share Units reserve

              569,919

 

              267,669

       Warrants

         14,778,272

 

           7,806,000

       Stock options

           2,075,897

 

              958,056

       Foreign currency translation reserve

         (1,862,829)

 

          (1,309,727)

       Accumulated deficit

       (67,905,607)

 

        (51,408,662)

 




Total Equity

         61,586,226

 

         40,221,941

 




Total Liabilities and Equity

         67,293,245

 

         45,868,780

 

 

Income Statement


Three months ended

 

Six months ended

September 30,

September 30,

 

2022

 

2021

 

2022

 

2021

 

Unaudited

 

Unaudited

Revenue

 







Interest income

               36,325

 

            3,911


               56,452

 

                8,435


               36,325

 

            3,911


               56,452

 

                8,435

Operating expenses:

 






  

Compensation costs

             210,605

 

        206,327


             479,914

 

            410,087

Professional fees

             240,894

 

        142,540


             460,579

 

            181,499

Operating costs

        11,097,960

 

          34,953


        13,041,411

 

            417,818

General and administrative costs

             350,864

 

        200,960


             608,154

 

            309,357

Share-based compensation

             750,667

 

            5,888


          1,751,886

 

              11,710

Foreign exchange loss

             690,794

 

          99,153


             975,221

 

              53,222

Total operating expenses

        13,341,784

 

        689,821


        17,317,165

 

         1,383,693









Operating loss

      (13,305,459)

 

      (685,910)


      (17,260,713)

 

        (1,375,258)









Fair value change in warrant liability

             415,712

 

        637,189


          1,846,696

 

            637,189

Share of losses of company accounted for at equity

             (92,302)

 

                  -  


           (184,605)

 

                      -  

Net loss for the period from continuing operations

      (12,982,049)

 

        (48,721)


      (15,598,622)

 

           (738,069)

Loss from discontinued operations, after-tax

           (800,210)

 

      (351,915)


           (898,323)

 

           (488,191)

Net loss for the period

      (13,782,259)


      (400,636)


      (16,496,945)


        (1,226,260)









Foreign currency translation adjustment

           (441,472)

 

        (21,484)


           (553,102)

 

               (8,235)

Comprehensive loss for the period

      (14,223,731)

 

      (422,120)


      (17,050,047)

 

        (1,234,495)









Net loss for the period attributed to:








Equity holders of the parent

      (12,982,049)

 

      (421,643)


      (16,496,945)

 

        (1,226,260)

Non-controlling interests

                       -  

 

          21,007


                       -  

 

                      -  


      (12,982,049)

 

      (400,636)


      (16,496,945)

 

        (1,226,260)









Basic and diluted net loss per share attributable to equity holders of the parent

               (0.038)

 

          (0.002)


               (0.052)

 

               (0.006)

Weighted average number of ordinary shares used in computing basic and diluted net loss per share

      343,966,022

 

 198,403,885


      319,575,745

 

     191,550,804

 

Cash Flow Statement

 

 


Six months ended

 

September 30,

2022

 

2021

 

 (Unaudited)

 

 (Unaudited)

Cash flow from operating activities

 



Net loss from continuing operations

   (15,598,622)

 

        (738,069)

Net loss from discontinued operations

(898,323)

 

        (488,191)

Items not affecting cash:




   Share-based compensation

1,751,886

 

           11,710

   Depreciation and amortization

                   -  

 

           38,124

   Accrued interest

                   -  

 

             6,770

   Revaluation of warrant liability

     (1,846,696)

 

        (637,189)

   Share of losses of companies accounted for at equity

184,605

 

                   -  

Changes in non‑cash working capital:




   Government receivable

            (5,169)

 

             8,752

   Accounts payable and accrued liabilities

1,601,059

 

102,372

   Accounts receivable and prepaid expenses

(948,297)

 

            (7,730)

   Reallocation to discontinued operations cashflows

(171,294)

 

                   -  

   Net change in non-cash working capital items relating to discontinued operations

419,113

 

                   -  

   Advance from and amounts owing to license partners

      1,486,236


        (247,066)


(14,025,502)


(1,950,517)





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

 



 Proceeds from private placements, net

    35,662,446

 

                   -  

Issuance of shares

                   -  

 

      4,793,789

Exercise of stock options

           67,406

 

           71,388


35,729,852


4,865,177





Increase (decrease) in cash and cash equivalents

21,704,350

 

(5,585,318)

Foreign exchange differences

(553,102)

 

(671)

Cash and cash equivalents, beginning of period

3,438,834


11,807,309





Cash and cash equivalents, end of period

    24,590,082


      6,221,320

 

 

Notes to the Financial Statements

 

Basis of Preparation

 

The Condensed Interim 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.

 

 

 

**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 Corporate Sustainability

 

 

+44(0)781 729 5070

Strand Hanson (Financial & Nominated Adviser)

 

+44 (0) 20 7409 3494

James Harris

James Bellman


 

Berenberg (Broker)

 

+44 (0) 20 3207 7800

Matthew Armitt

Detlir Elezi


Echelon Capital (Financial Adviser N. America Markets)

 

 

Ryan Mooney 

Simon Akit

+1 (403) 606 4852

+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 km2 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 km2 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 Block 3B/4B operated by Africa Oil Corp., totalling some 20,643 km2

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.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
IR PPGPPGUPPPGR