Eco (Atlantic) Oil & Gas Ltd., the oil and gas exploration company with licences in the proven oil provinces of Guyana and Namibia, is pleased to announce its results for the three and nine months ended 31 December 2021, alongside a corporate and operational update.
· Cash and cash equivalents of US$5.8 million and no debt as of 31 December 2021.
· Total assets of US$19million, current liabilities of US$2 million and total equity of US$17 million as of 31 December 2021.
Operations during and post-period end:
· The Company purchased an additional 800,000 common shares in JHI Associates Inc. ("JHI") in return for 1,200,000 new common shares in Eco ("Consideration Shares"). The purchase of the 800,000 common shares in JHI completed on 19 January 2022, increasing the total number of shares held by Eco in JHI to 5,800,000 shares representing c.7.35% of JHI.
· On the Canje Block, Guyana, Eco received a detailed update from JHI Associates Inc. on 30 October 2021 that ExxonMobil had successfully and safely drilled the Sapote-1 well. The well recorded hydrocarbon shows while drilling and in the logging sequence, in a deeper interval than anticipated, but had no shows in the upper primary objective horizon. With sidewall coring and wireline logging complete, ExxonMobil will now work to define the reservoir properties, including porosity and permeability, and the cored samples will be analysed for hydrocarbons.
· On the Orinduik Block, the JV Partners (Eco Atlantic (15% working interest ("WI")), Tullow Guyana B.V. ("Tullow") (Operator, 60% WI) and TOQAP Guyana B.V. ("TOQAP") (25% WI)) are advancing towards finalisation of the target selection process and updating the drilling targets inventory. The partnership aims to establish firm targets in the near-term and advance towards drilling.
Namibia and South Africa
· On 10 January 2022, Eco announced this signing of a binding Memorandum of Understanding ("MOU") to acquire 100% of Azinam Group Limited ("Azinam") (the "Acquisition"), including Azinam's entire offshore asset portfolio, in return for a 16.5% equity stake in Eco (as enlarged by the associated share issuance). Subsequent to this, Eco reported the signing of a definitive Share Purchase Agreement ("SPA") with Azinam on 8 February 2022, which, pending TSX-V approval, is anticipated to lead to the Closing of the transaction imminently.
· Eco is now planning and preparing the drilling of an exploration well on Block 2B in H2 2022, a highly prospective Block with past oil discovery (AJ-1) in the Orange Basin, offshore South Africa, close to the recent Graff-1 discovery by Shell and Qatar Energy.
· In October 2021, Eco completed drafting the four new Joint Operating Agreements ("JOAs") for its new 2021 Petroleum Licenses in the Walvis Basin, offshore Namibia. The Company has received all paying partner approvals on the JOAs and Namibia's Ministry of Mines and Energy has approved Eco Atlantic to be the Operator of all four blocks, which total some 7,065,484 acres (28,593 km2).
· The Company continues to monitor and assess opportunities, both technical and corporate, particularly with the recent Shell Namibia's Graff-1 and TotalEnergies Venus-1 discoveries in the Orange Basin.
· On 24 February 2021, Eco was pleased to announce the successful sale of the Kozani project in Greece by Solear Ltd. ("Solear") at 25% margin and for US$2 million to Nepcoe Capital Partners Ltd ("Nepcoe") and the re-payment of this consideration to Eco Atlantic will be received by the end of February 2022.
· Eco continues to work closely with its JV Partners on the Orinduik Block with regard to carrying out further drilling activity on the licence as soon as practically possible. The Partners will likely look to drill at least one of the light oil cretaceous stacked targets after the target selection process is finalised.
· Guyana continues to be one of the most prolific exploration regions in the world, with over ten billion barrels of oil discovered in the last six years.
· Eco are encouraged by recent neighbouring discoveries - ExxonMobil operated Stabroek block Fangtooth-1 discovery in deeper intervals and Santonian sands similar to the shows seen in Sapote-1 well Canje block and by CGX Energy operated Corentyne block, confirming a discovery at the Kawa-1 wildcat, a shelf discovery which is on trend geologically with the Orinduik block.
Namibia and South Africa
· The Company's licences in Namibia cover approximately 28,593 km2, with over 2.362 BBOE of prospective P50 resources.
· With the addition of Azinam's offshore portfolio, Eco has expanded upon its strategically significant acreage position in-country and is progressing its various work programmes across its Namibian licences. With the recently announced discoveries at the Graff-1 and Venus-1 the Company continues to witness considerable interest in Namibia from multiple international oil companies.
· Eco is now planning and preparing the drilling of an exploration well on Block 2B in H2 2022, subject to available funding, a highly prospective Block with past oil discovery (AJ-1) in the Orange Basin, rig contract execution expected in the next month along with commencing orders of long lead items. Once the Azinam deal has closed, Eco will become the official operator of the Block.
· Eco continues to evaluate additional asset and corporate opportunities in and around its current areas of operation, with an overarching aim of building Eco into an exploration business of material scale.
· Eco also maintains 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:
"I am excited about the positive and busy start to the year we have made. We announced a transformational deal with the purchase of Azinam's offshore acreage, which will add to our highly strategic acreage position in Namibia and allow us entry into Orange Basin, South Africa. Two important large discoveries offshore Namibia has already been announced this year on trend with our new Orange basin blocks, and our team is working hard on the upcoming drilling campaign on Block 2B in H2 2022 and furthering their technical understanding on Block 3B4B which is geologically on same pathway with Graff-1 and Venus-1.
"We also increased our interest in JHI, via an additional share swap, reinforcing our view that Guyana remains one of the most attractive hydrocarbon provinces in the world. We look forward to announcing our future drilling plans in due course, as we work with our JV Partners on finalising the target selection and drilling plans.
"We were also pleased to play a role in the sale of Solear's Kozani project in Greece for c.US$2 million, which generated a 25% return for Eco shareholders and will now be returned to Eco's treasury.
"Eco continues to assess both asset and corporate opportunities, as well as a number of meaningful catalysts that have the potential to deliver value for all stakeholders, and we look forward to updating the market further in due course."