Eco (Atlantic) Oil & Gas Ltd., the oil and gas exploration company with license interests in Guyana and Namibia, is pleased to announce its results for the three months ended 30 June 2020, alongside a corporate and operational update.
- As at 30 June 2020, the Company had cash and cash equivalents of US$ 17.9 million with zero debt and remains fully funded for its share (15% WI net) of further appraisal and exploration drilling at Orinduik Block offshore Guyana (the “Orinduik Block”) of up to three wells at US$120M (gross).
- As at 30 June 2020, Eco had total assets of US$19.2 million, total liabilities of US$ 372,138 and total equity of US$18.8 million.
- 58% cost reduction this quarter in response to COVID-19 strict cost cutting measures taken as of April 2020.
- The Company has changed its presentation currency from Canadian Dollars to US Dollars to better reflect the business activities and future operations which will be predominantly in US Dollars, and to improve investors’ ability to compare the Company’s results to its industry peers.
Operations – Guyana
- The Orinduik JV partners (the “Partners”) are further defining the Orinduik geological modeling, previous discoveries, prospects maturation and drilling targets selection. The Partners are also reviewing and incorporating the latest Kanuku Block Carapa-1 light oil discovery up dip and behind Orinduik and additional regional exploration information into the models. The intention is to provide further definition to the Cretaceous interpretation and target selection for drilling.
- On 30 June 2020, the Company and its Partners on the license approved a budget in the amount of approximately US$5 million through to 31 December, 2020 for 3D reprocessing based on new regional results and target selection. The Company’s share of this budget is US$750,000.
- Alongside its JV Partners, multiple drilling prospects on the license are currently being reviewed. High-graded candidates will be considered for the next drilling programme.
- Eco remains fully funded for a further drilling programme on the Orinduik Block and, subject to JV Partner approval, anticipates drilling at least two exploration wells into light oil cretaceous targets in 2021. Further updates on this matter will be made as appropriate.
The Orinduik JV partners are Eco Atlantic (15% working interest (“WI“)), Tullow Guyana B.V. (“Tullow“) (Operator, 60% WI) and Total E&P Guyana B.V. (“Total“) (25% WI).
- Eco continues to benefit from a strategically significant acreage position in-country and is progressing its various work programmes offshore Namibia. The company is witnessing an increased interest from multiple IOCs in Namibia.
- The Company continues to monitor upcoming drilling activity in the region, which could potentially see up to five exploration wells drilled on behalf of ExxonMobil, Total, Maurel & Prom, Shell and ReconAfrica in the next 12 months, expected to start Q4 2020.
- Due to the COVID-19 pandemic and lower oil price environment, Eco took decisive action to quickly reduce costs throughout the business.
- The Company has decreased its total non-exploration expenses, including general and administration expense and compensation costs incurred during the three months ended June 30, 2020 (Q1 2021), when compared to the three months ended March 31, 2020 (Q4 2020), by 58%.
- The action generated material significant savings and has ensured the business remains well capitalised, with no debt on the balance sheet, for its 2021 drilling and exploration plans.
Gil Holzman, President and Chief Executive Officer of Eco Atlantic, commented:
“The Company has made significant strides towards advancing its asset portfolio in 2020. Due to the actions taken, Eco remains well capitalised and fully funded for a further drilling campaign in Guyana and additional activity elsewhere.
“In Guyana, we have made excellent progress with high grading and further defining multiple highly prospective drilling prospects. Alongside our JV Partners, we firmly believe in the upside potential of the Block and we look forward to recommencing drilling activity in 2021. We look forward to updating the market on our plans in the coming months.
“In Namibia, we continue to see increasing interest in the country’s offshore oil potential, especially with another set of exploration wells planned by other operators over the coming 12 months. We have an important strategic acreage position offshore Namibia and expect any successful drilling activity in the region to benefit us.
“Despite the challenging macro backdrop, Eco has a resilient business model and has taken decisive action to preserve the Company’s liquidity. We continue to benefit from strategically important acreage positions in two exploration hotspots and from a strong partnership and cooperation with our biggest shareholder Africa Oil Corp., and I look forward to updating the market on developments over the coming months.”