Results for the Three Months Ended 30 June 2021

Source Press Release
Company Eco (Atlantic) Oil & Gas Ltd.Africa Oil CorpExxonMobilJHI Associates, Inc.QatarEnergyRoyal Dutch ShellTotalEnergies SETullow Oil Plc 
Tags Exploration, Discovery, Upstream Activities, Strategy - Upstream, Capital Spending, Strategy - Corporate, Financial & Operating Data
Date August 31, 2021

Unaudited Results for the three months ended 30 June 2021

Corporate and Operational Update

Eco (Atlantic) Oil & Gas Ltd. (AIM: ECO, TSX ‐ V: EOG), the oil and gas exploration company with licences in the proven oil province of Guyana and the highly prospective basins of Namibia, is pleased to announce its results for the three months ended 30 June 2021, alongside a corporate and operational update.  

Results Highlights:


·    Cash and cash equivalents of US$4.85 million (including restricted deposits) and no debt as of 30 June 2021. 

·    Raised US$4.9m in the form of a private placement in July 2021.

·    Total assets of US$17.9 million, total liabilities of $2.7 million and total equity of US$15.2 million as of 30 June 2021.


Eco Atlantic Oil & Gas

·    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. ("JHI"), 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.

o  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.

o  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.

o  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.



·    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% working interest ("WI")), Tullow Guyana B.V. ("Tullow") (Operator, 60% WI) and TOQAP Guyana B.V. ("TOQAP") (25% WI) a company jointly owned by TotalEnergies E&P Guyana B.V. (60%) and Qatar Petroleum (40%).


·    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.


·    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."     

The Company's unaudited financial results for three months ended 30 June 2021, together with Management's Discussion and Analysis for the three months to 30 June 2021, are available to download on the Company's website at  and on Sedar at   .

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

   June 30,    March 31, 
2021  2021 
   Unaudited    Audited 
Current assets       
Cash and cash equivalents                 4,354,980              11,807,309 
Short-term investments                     52,618    1,552,640 
Government receivable                       2,083    22,697 
Amounts owing by license partners, net                    127,226    193,655 
Accounts receivable and prepaid expenses                     59,632    46,480 
                 4,596,539    13,622,781 
    Renewable energy licenses                 1,395,739               1,411,186 
    Investment in associate               10,000,000                           -    
    Right of use assets                    328,773                  332,495 
    Security deposit                    495,391                  490,455 
    Petroleum and natural gas licenses                 1,072,260    1,072,260 
Total Assets               17,888,702              16,929,177 
Current liabilities 
       Accounts payable and accrued liabilities                    384,241                  501,022 
       Advances from and amounts owing to license partners, net                     36,587                    97,153 
       Receipt on account of shares                 1,940,021                           -    
       Short-term portion of lease liability                     22,987                    22,987 
Total current liabilities                 2,383,836                  621,162 
Lease liability                    329,321                  325,917 
Total liabilities                 2,713,157                  947,079 
Share capital               59,099,725              59,099,725 
Restricted Share Units reserve                    267,669                  267,669 
Stock options                 2,681,546               2,675,724 
Foreign currency translation reserve               (1,184,848)              (1,198,097) 
Non-controlling interest                    (69,681)                   (48,674) 
Accumulated deficit              (45,618,866)            (44,814,249) 
Total Equity               15,175,545              15,982,098 
Total Liabilities and Equity               17,888,702              16,929,177 

Income Statement

    Three months ended 
June 30, 
    2021    2020 
Interest income                   4,524                   28,409 
                   4,524                   28,409 
Operating expenses:         
Compensation costs                246,178                 172,304 
Professional fees                 70,681                   32,615 
Operating costs (Note 18)                441,597                 519,677 
General and administrative costs (Note 19)                108,397                   87,003 
Share-based compensation (Note 14(i))                   5,822                   12,643 
Interest expense (Note 11)                   3,404                          -    
Foreign exchange gain (loss)                (45,931)                     9,033 
Total expenses                830,148                 833,275 
Net loss for the period              (825,624)                (804,866) 
Foreign currency translation adjustment                 13,249                   36,859 
Comprehensive loss for the period              (812,375)                (768,007) 
Net loss for the period attributed to:         
Equity holders of the parent              (804,617)                (804,866) 
Non-controlling interests                (21,007)                          -    
              (825,624)                (804,866) 
Basic and diluted net loss per share attributable to equity holders of the parent                    (0.00)                     (0.00) 
Weighted average number of ordinary shares used in computing basic and diluted net loss per share         184,697,723           184,697,723 

Cash Flow Statement

  Three months ended 
  June 30, 
2021    2020 
Cash flow from operating activities       
Net loss from operations            (825,624)             (804,866) 
Items not affecting cash:       
   Share-based compensation  5,822    12,643 
   Depreciation and amortization  19,169   
   Accrued interest  3,404   
Changes in non‑cash working capital:       
   Government receivable  20,614    4,728 
   Accounts payable and accrued liabilities  (116,781)    33,469 
   Accounts receivable and prepaid expenses  (13,152)                       -    
   Receipt on account of shares  1,940,021                       -    
   Advance from and amounts owing to license partners                 5,863               (13,280) 
  1,039,336    (767,306) 
Cash flow from investing activities       
 Investment in associate       (10,000,000)                       -    
 Short-term investments           1,500,022                       -    
Decrease in cash and cash equivalents  (7,460,642)    (767,306) 
Foreign exchange differences  8,313    18,422 
Cash and cash equivalents, beginning of period  11,807,309    18,667,016 
Cash and cash equivalents, end of period           4,354,980          17,918,132 

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.

Events After the Reporting Period

a)         Private Placement

On July 19, 2021, the Company closed a private placement financing with Africa Oil Corp. and Charlestown Energy Partners LLC issuing a total of 14,945,913 common shares and 14,945,913 share purchase warrants exercisable for 2 years at CAD$0.47.

As a result of the financing, Africa Oil Corp.'s interest in the Company is 19.99%.

Source: EvaluateEnergy® ©2021 EvaluateEnergy Ltd