Eco (Atlantic) Oil & Gas
Eco has 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.”
Well there is not much in this announcement that wasn’t already in the market, historic figures are just that and as for the portfolio it is all about partnering. In South Africa, having already farmed-out 6.25% of Block 3B/4B to Africa Oil and benefited the cash flow they are looking to find another buyer as well as preparing for a two well drilling campaign.
In Namibia the company report ‘significant interest’ in their strategic acreage position, here too Eco are looking to farm-out of its four licences in the area. I have heard so many stories about other wells drilled in the country with varying degrees of success that the proof of this particular pudding will undoubtedly be in the eating.
Finally, one way or another Eco has its now 75% stake in the Orinduik Block in Guyana as well as operatorship to play with. The formal farm-out procedure is underway and whilst Guyana remains a very hot post code since the huge success of Exxon amongst others, there are plenty of hurdles before that long awaited drilling programme reappears.
Eco is standing on the verge of a most exciting time, I would suggest that unlike in the old days it is Africa which is hottest of properties and South Africa within that, either way any prospect of seeing the signature on a farm-out document would result in the much needed increase in the share price, at below 10p a share Eco is ludicrously good value and with news flow surely imminent?
