RNS Number : 2260F
Eco (Atlantic) Oil and Gas Ltd.
01 March 2024
 

1st March 2024

 

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 2023

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 three and nine months ended 31 December 2023.

 

Highlights:

 

Financials (as at 31 December 2023)

 

·    The Company had cash and cash equivalents of US$2.2 million and no debt as at 31 December 2023.

·    The Company had total assets of US$49.9 million, total liabilities of US$1.6 million and total equity of US$48.3 million as at 31 December 2023.

 

Operations:

 

South Africa

 

Block 2B

 

·    Eco has applied for a Production Right Application to the Petroleum Agency of South Africa, for Block 2B, and continues to assess opportunities available to deliver value from this licence for the benefit of stakeholders.

 

Block 3B/4B

 

·    The JV partners continue to actively progress a farm out in conjunction with preparations for a two well drilling campaign on the Block. Further updates will be made as appropriate.

 

Post-period end

 

·    On January 22, 2024, Eco's wholly owned subsidiary, Azinam Limited, received final government approval for the farm out of its 6.25% Participating Interest in Block 3B/4B to Africa Oil Corp. announced on 11 July 2023. As per the teams of the Assignment and Transfer Agreement, Eco received further payment of $2.5m from Africa Oil.

 

Namibia

 

·    Following continued drilling success in the area, Eco continues to receive significant interest in its strategic acreage position in Namibia.

·    The Company continues to assess farm out opportunities with its four licences in the region and will update the market further as appropriate.

 

Guyana

 

·    As previously announced, on November 15, 2023, the Company received approval for the transfer of 60% Working Interest and Operatorship in the Orinduik Block, offshore Guyana, from the government.

·    Within the period, Eco became Operator of the Orinduik Block, holding, in aggregate, a 75% Participating Interest via Eco Orinduik (60%) and Eco (Atlantic) Guyana Inc (15%), following the closing of the acquisition of Tullow Guyana B.V.

·    A formal farm-out process for the Orinduik Block is underway and the Company will provide further updates as appropriate.

·    Guyana remains one of the most prolific hydrocarbon basins in the world, continuing to yield sizable discoveries and attracting high levels of interest for exploration assets.

 

Post-period end

 

·    On January 22, 2024, Eco Orinduik gave notice to the Minister of Natural Resources of the Cooperative Republic of Guyana to enter the Second Phase of the Second Renewable Period of the Orinduik License effective as of January 2024 and TOQAP's decision to relinquish its 25% WI. As a result, Eco currently holds 100% WI in the Block.

 

 

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

 

"Each asset within our exploration portfolio yields exciting opportunities and I am pleased to report continued progress across all fronts. Notably, government approval of our farm-out agreement of our 6.25% Participating Interest in Block 3B/4B to Africa Oil has strengthened our cash position as we continue preparations for a two well drilling campaign on the Block and progress farm out discussions.

 

"Guyana remains one of the most important hydrocarbon provinces in the world and Eco's position has been strengthened by its increased Working Interest in the Orinduik Block. We have seen a great deal of interest from a number of oil and gas players as we progress a formal farm out process.

 

"Eco continues to benefit from its position in Namibia, which sits close to some of the largest oil discoveries in 2023, an area that we expect will see further excitement and activity over the course of this year, which will aid our farm out process.

 

"The end of the period was marked by dynamic activity across our portfolio and we remain excited about the potential for the remainder of 2024."

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 31,

 

March 31,

2023

2023

Assets

 



Current Assets

 



Cash and cash equivalents

             2,190,363

 

         4,110,734

Short-term investments

                  13,107

 

              13,107

Government receivable

                  18,328

 

              22,494

Amounts owing by license partners, net

                  31,830

 

            477,578

Accounts receivable and prepaid expenses

                  79,520

 

         1,529,451

Total Current Assets

             2,333,148

 

         6,153,364





Non- Current Assets

 



Investment in associate

             8,113,596

 

         8,612,267

Petroleum and natural gas licenses

           39,450,544

 

       40,852,020

Total Non-Current Assets

           47,564,140

 

       49,464,287

Total Assets

           49,897,288

 

       55,617,651





Liabilities

 



Current Liabilities

Accounts payable and accrued liabilities

             1,400,511

 

         4,416,789

Advances from and amounts owing to license partners, net

                198,254

 

            286,553

Warrant liability

                          -  

 

            261,720

Total Current Liabilities

             1,598,765

 

         4,965,062

 

 



Total Liabilities

             1,598,765

 

         4,965,062





Equity

 



Share capital

         122,088,498

 

     121,570,983

Restricted Share Units reserve

                920,653

 

            920,653

Warrants

           14,778,272

 

       14,778,272

Stock options

             2,900,501

 

         2,804,806

Foreign currency translation reserve

            (1,642,705)

 

       (1,458,709)

Accumulated deficit

          (90,746,696)

 

     (87,963,416)





Total Equity

           48,298,523

 

       50,652,589





Total Liabilities and Equity

           49,897,288

 

       55,617,651

 

Income Statement

 


Three months ended

 

Nine months ended

December 31,

 

December 31,

 

 

2022

 

2023

 

2022

Revenue

 







Interest income

                        17

 

                 36,731


                       1,703

 

                    93,183


                        17

 

                 36,731


                       1,703

 

                    93,183

Operating expenses:

 


  




  

Compensation costs

               208,201

 

               217,192


                   629,199

 

                  697,106

Professional fees

                 89,877

 

               131,188


                   388,437

 

                  591,767

Operating costs, net

               567,682

 

          19,880,507


                1,329,063

 

             32,921,918

General and administrative costs

               180,744

 

               120,692


                   453,786

 

                  728,846

Share-based compensation

                         -  

 

               484,125


                     95,695

 

               2,236,011

Foreign exchange loss

             (111,839)

 

             (333,104)


                   (12,094)

 

                  642,117

Total operating expenses

               934,665

 

          20,500,600


                2,884,086

 

             37,817,765









Operating loss

             (934,648)

 

        (20,463,869)


              (2,882,383)

 

           (37,724,582)









Gain on settlement of liability (Note 8(a))

                         -  

 

                         -  


                 (200,640)

 

                           -  

Fair value change in warrant liability

                         -  

 

               556,277


                   261,720

 

               2,402,973

Share of losses of company accounted for at equity

             (166,224)

 

               (92,303)


                 (498,671)

 

                (276,908)

Net loss for the period from continuing operations, before taxes

          (1,100,872)

 

        (19,999,895)


              (3,319,974)

 

           (35,598,517)

Tax recovery

                         -  

 

                         -  


                   536,694

 

                           -  

Net loss for the period from continuing operations, after taxes

          (1,100,872)

 

        (19,999,895)


              (2,783,280)

 

           (35,598,517)

Gain (loss) from discontinued operations, after-tax

                         -  

 

               546,343


                            -  

 

                (351,980)

Net loss for the period

          (1,100,872)


        (19,453,552)


              (2,783,280)


           (35,950,497)









Foreign currency translation adjustment

               101,779

 

                 16,803


                 (183,996)

 

                (536,299)

Comprehensive loss for the period

             (999,093)

 

        (19,436,749)


              (2,967,276)

 

           (36,486,796)









Basic and diluted net loss per share:








from continuing operations

               (0.0030)

 

               (0.0547)


                   (0.0090)

 

                  (0.1034)

     from discontinued operations

               (0.0003)

 

                 0.0015


                   (0.0003)

 

                  (0.0010)

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

        370,173,680

 

        365,355,650


            368,987,135

 

           344,158,567

 

 

Cash Flow Statement

 


Nine months ended

 

December 31,

2023

 

2022

Cash flow from operating activities - continued operations

 



Net loss from continuing operations

 $   (2,783,280)

 

 $      (35,598,517)

Items not affecting cash:




   Share-based compensation

95,695

 

             2,236,011

   Revaluation of warrant liability

         (261,720)

 

           (2,402,973)

   Share of losses of companies accounted for at equity

498,671

 

                276,908

Changes in non?cash working capital:




   Government receivable

               4,166

 

                (14,981)

   Accounts payable and accrued liabilities

(2,897,287)

 

15,243,249

   Accounts receivable and prepaid expenses

1,449,931

 

             7,969,314

   Reallocation to discontinued operations cashflows

                     -  

 

              (171,294)

   Advance from and amounts owing to license partners

           357,449


         (12,878,306)

Cash flow from operating activities - continued operations

(3,536,375)


(25,340,589)





Cash flow from operating activities - discontinued operations

                     -  

 

              (810,822)





Cash flow from investing activities

 



    Short-term investments

                     -  

 

(2,648)

    Acquisition of Orinduik BV

         (700,000)

 

-

    Proceeds from Block 3B/4B farmout

        2,500,000


                         -  

Cash flow from investing activities - continued operations

1,800,000


(2,648)





Cash flow from investing activities - discontinued operations

                     -  

 

             2,047,322





Cash flow from financing activities

 



 Proceeds from private placements, net

                     -  

 

           35,666,089

Cash flow from financing activities

                     -  


35,666,089





Increase (decrease) in cash and cash equivalents

(1,736,375)

 

11,559,352

Foreign exchange differences

(183,996)

 

(536,298)

Cash and cash equivalents, beginning of period

4,110,734


3,438,834





Cash and cash equivalents, end of period

 $     2,190,363


 $        14,461,888

 

 

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, Executive Director

 

 

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


 

Celicourt (PR)

 

+44 (0) 20 7770 6424

Mark Antelme

Jimmy Lea


 

 

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 operates a 100% Working Interest in the 1,354 km2 Orinduik Block. 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 in Block 3B/4B, in the Orange Basin, totalling some 20,643km2

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