Eco (Atlantic) Oil & Gas Ltd. (AIM: ECO, TSX‐V: EOG), the oil and gas exploration company with licences in Guyana and Namibia, is pleased to announce its results for the three and six months ended 30 September 2019, alongside a corporate and operational update.
Results Highlights:
Financials
· As at 30 September 2019, the Company had cash and cash equivalents of CAD $30.7 million. The Company remains well funded and currently has CAD $27.9 million of cash and cash equivalents on the balance sheet.
· During the first quarter of the financial year, Eco completed its previously announced private placement raising gross proceeds of CAD $22.6 million.
· As at 30 September 2019, Eco had total assets of CAD $32.3 million, total liabilities of CAD $2.5 million and total equity of CAD $29.8 million.
Operations - Guyana
· On 12 August 2019, the Company announced a major oil discovery on its Orinduik offshore petroleum license in Guyana (the "Guyana License"). Evaluation of logging data confirms that Jethro-1 is the first discovery on the Guyana License and comprises high-quality oil-bearing sandstone reservoir of Lower Tertiary age. The well was cased and is awaiting further evaluation to determine the appropriate appraisal activity.
· On 16 September 2019, the Company announced a second oil discovery on the Guyana License. Evaluation of MWD, wireline logging and sampling of the oil confirms that Joe-1 is the second discovery on the Orinduik license and comprises high quality oil-bearing sandstone reservoir with a high porosity of Upper Tertiary age.
· Both wells were drilled within budget, with MWD logging tool and conventional wireline, and the reservoirs were considered to be high quality sands with good permeability.
· Fluid samples were taken in both of the wells and were sent for analysis by the Operator. The complete fluid analysis and report for both wells have not yet been received. However, initial results suggest that the samples recovered to date from Jethro-1 and Joe-1 are mobile heavy crudes with high sulphur content.
· Oil tested to date appears it is not dissimilar to the commercial heavy crudes currently in production in the North Sea, Gulf of Mexico, the Campos Basin in Brazil, Venezuela and Angola.
· The Joint Venture partners on the block have engaged a third party consultant with heavy oil development expertise to help conduct preliminary evaluations related to production and commercialisation. Evaluation work is ongoing and the partners are considering alternatives for further drilling and testing and a number of development drilling and production alternatives are now to be considered. The Company remains optimistic in considering the development scenarios and as the project progresses will define further information on plans and timing.
· The CPR published on 18 March 2019 suggested the block potentially contains in excess of 3.9 billion Gross Prospective Oil Equivalent Resources (P50 Best) on approximately 15 identified prospects. Approximately 900 million barrels of oil in Tertiary Reservoirs and approximately 3 billion barrels of oil in Cretaceous prospects, remain to be explored. The Company is currently preparing an updated CPR, which is expected to be published after the Kanuku block Carapa well results, potentially in January 2020.
Outlook
· Guyana
o Multiple prospects currently being reviewed with high graded candidates under consideration for a 2020 drilling programme.
o Operator is preparing a budget for long lead items including wellheads and casing.
o Once the final well fluid reports and related testing data for the two discoveries as well as results from other regional exploration activities, including drilling of the neighbouring Carapa well have been analysed and evaluated, an updated CPR will be published
o A further update will be made on the JV Partner's drilling plans for next year in January 2020.
· Namibia
o Eco continues to progress its various work programmes offshore Namibia.
o The Company plans to monitor near term drilling activity in the region and will update the market on developments as appropriate.
Gil Holzman, President and Chief Executive Officer of Eco Atlantic, commented:
"We ended the first half of our financial year with a very strong balance sheet. After drilling our first two wells in Guyana we now have CAD $27.9 of cash and cash equivalents. These funds will be used to continue the evaluation of our two Guyana oil discoveries and to drill additional exploration and potentially appraisal wells on the block in 2020.
We recognise the market reaction to our last announcement on the oil quality discovered at Jethro and Joe and we are grateful for the continued support of our shareholders. This continues to be an exciting time for the Company, as the Orinduik block offers many promising prospects and we continue to work with our partners and third party experts to evaluate our first two discoveries and determine the 2020 drilling targets and budget. We expect to announce our drilling plans by the end of January 2020 and we look forward to updating our shareholders on this as appropriate."