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Final Results for the year ended 31 March 2017

 

Eco (Atlantic) Oil & Gas Ltd. (AIM: ECO, TSX-V:EOG), the oil and gas exploration company with licences in highly prospective regions in South America and Africa, is pleased to announce its preliminary results for the year ended 31 March 2017.

  • Operational Highlights: Together with its Operating Partner, Tullow Oil plc (“Tullow”), the Company is commencing a circa 2,550 km2 3D seismic survey on the 1,800 km2 Orinduik Block, offshore Guyana, almost two years ahead of schedule, thereby seeking to de-risk the existing defined targets located up dip and in close proximity to Exxon Mobil Corporation’s (“Exxon”) recent Liza, Snoek, and Payara discoveries on the Stabroek block estimated to contain oil recoverable resources of between 2.25 and 2.75 billion oil-equivalent barrels
  • Extension of the Cooper, Sharon and Guy Licenses into the first renewal period, until March 2018 -  the second renewal phase under the petroleum agreement for each license is until March 2020
  • Advancement of the 3D interpretation on Cooper and Guy blocks offshore Namibia and application for drilling permits and pre and post drilling EIA surveys underway
  • Sale of the Company's Ghana subsidiary in order to significantly reduce potential financial liabilities
  • Strengthened the Board following the appointment of Mr. Derek Linfield as Non-Executive Director and Mr. Gadi Levin as Chief Financial Officer

Financial Highlights:

  • Successful admission to AIM in February 2017, following an oversubscribed placing and financing of £5.09 million (c.C$8.4m)
  • Healthy balance sheet end of the period with over C$6m in cash
  • Continued reduction in general and administration costs, compensation costs, and professional fees
      • General and administrative expenses down 22% to C$385,568 (2016: C$497,009)
      • Compensation down 25% to C$483,458 (2016: C$642,035)
      • Professional fees down 12% to C$286,717 (2016: C$325,338)
      • Travel expenses down 26% to C$132,348 (2016: 178,802)
      • Occupancy and office expenses down 72% to C$82,332 (2016: 295,438)
      • Operating costs up 5% to C$2,169,940 (2016: C$2,508,497)

Gil Holzman, President and Chief Executive Officer of Eco Atlantic, commented:

“We are pleased to present yet another successful and extremely busy financial year-end report. The highlights speak for themselves, where on one hand we made progress on all of our licenses, and on the other managed to significantly reduce non-operational expenses. The concurrent AIM listing and financing coupled with the significant developments on our core assets in Guyana and Namibia are compelling.  Our strong balance sheet now enables us to execute on our critical short-term milestones, which we believe we will be able to achieve in the coming year, in preparation for hopefully high impact drilling campaigns in both Namibia and Guyana towards the fiscal year 2018.”

The Company’s financial results for the year ended 31 March 2017, together with Management’s Discussion and Analysis as at 31 March 2017, are available to download on the Company’s website at www.ecooilandgas.com and on Sedar at www.sedar.com.

CEO’s Statement

2017 was a transformational year for Eco Atlantic, which saw the business successfully list on AIM in February having raised £5.09 million (C$8.4 million) in an oversubscribed placing. Our dual TSX-V and AIM listing means that we now have access to two key capital markets, providing wider access to capital to accelerate work programmes on our licence blocks located offshore Guyana and Namibia, both of which are prospective regions where significant oil discoveries have been made.

In Guyana, we note with interest the continuous flow of discoveries in the Guyana-Suriname basin that have been announced over the last few months by oil and gas majors in the region.  Following the world-class Liza oil discovery in 2015, where Exxon reported that recoverable resources could hold as much as 1.4 Billion barrels; a second significant discovery was made in January 2017. Exxon reported this second oil discovery, from the Payara-1 well, indicated 95 feet of high quality oil bearing sandstone reservoirs. Later on, in March 2017, ExxonMobil announced a further new oil discovery on its Snoek Oil Prospect, which consists of 82 feet of high quality oil-bearing sandstone reservoir on the Stabroek Block, just five miles southeast of the Liza 1 discovery and in very close proximity to our 1,800 km2 Orinduik Block.  Exxon and its partners recently reported over 2.5 billion barrels of recoverable oil on the Stabroek Block and announced that first production is expected at the beginning of 2020, at a rate of 100,000 BOD.

On the heels of these close-proximity discoveries, we, together with the operating partner, Tullow, completed the first phase of exploration on our Orinduik Block, which included evaluating all existing and regional 2D data. Following the results of this study and the ongoing regional success, we agreed to accelerate and significantly increase the originally proposed 1,000km2 3D survey commitment on the block to circa 2,550km2, thus covering the entire block area, fully overlapping current prospective 2D leads and downdip trends. As part of our agreement with Tullow, Tullow will carry our share of the originally proposed 1,000 km2 of the survey, at a cap of US$1.25mm, with the balance of the programme being funded by both parties on a pro-rata basis for which the Group is already funded from its existing cash reserves.

In Namibia, we have secured the required extensions on our three licenses, Guy, Cooper and Sharon, and we are encouraged by the recent news that Tullow, our partner on our Cooper license, has farmed down a 30% Working Interest of PEL 037 to Oil and Natural Gas Corporation Limited (“ONGC”) of India. It is highly probable that an exploration well will be drilled at PEL 037 in first quarter of 2018, which is located immediately south of the Cooper license (in which we currently own a 32.5% interest). This news supports our long-time belief of the oil potential in the Walvis Basin, Namibia.

We have completed the 3D seismic surveys on our Cooper and Guy license interests in Namibia. On Cooper, the interpretation will remain underway until we and the Block partners will decide on our first exploration well in the first half of 2018. We are currently in the process of filing drilling permits and conducting pre and post drilling EIA surveys. On the Guy licence, processing and interpretation is underway and is likely to be completed the end of the calendar year 2018.

Conclusion

I would like to thank our Chairman, our fellow members of the board of directors, the executive management team and the partners on our licenses for the continued hard work and support, which has contributed to the success of the Company. I look forward to reporting on the developments and progress we make in Guyana and Namibia in due course.

Gil Holzman,
Chief Executive Office
27 July 2017

For more information, please visit www.ecooilandgas.com or contact the following:

Eco Atlantic Oil and Gas +1 (416) 250 1955
Gil Holzman, CEO
Colin Kinley, COO
Alan Friedman, VP
Finlay Thomson, UK and IR manager
+44 (0) 7976 248471
  Strand Hanson Limited (Financial & Nominated Adviser) +44 (0) 20 7409 3494
James Harris
Rory Murphy
James Bellman
 
Brandon Hill Capital Limited (Joint Broker) +44 (0) 20 3463 5000
Alex Walker
Jonathan Evans
Robert Beenstock
 
Peterhouse Corporate Finance (Joint Broker) +44 (0) 20 7469 0930
Eran Zucker
Duncan Vasey
Lucy Williams
 
Yellow Jersey PR +44 (0) 7768 537 739
Felicity Winkles
Harriet Jackson
 

 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014.

Notes to editors
Eco Atlantic is a TSX-V and AIM listed Oil & Gas exploration and production Company with interests in Guyana and Namibia where significant oil discoveries have been made.

The Group aims to deliver material value for its stakeholders through oil exploration, appraisal and development activities in stable emerging markets, in partnership with major oil companies, including Tullow and AziNam.

In Guyana, Eco Guyana holds a 40% working interest alongside Tullow Oil (60%) in the 1,800 km2 Orinduik Block in the shallow water of the prospective Suriname Guyana basin. The Orinduik Block is adjacent and updip to the deep-water Liza Field, recently discovered by ExxonMobil and Hess, which is estimated to contain as much as 1.4 billion barrels of oil equivalent, making it one of a handful of billion-barrel discoveries in the last half-decade.

In Namibia, the Company holds interests in four offshore petroleum licences totaling approximately 25,000 km2 with over 2.3 billion barrels of prospective P50 resources in the Wallis and Lüderitz Basins.  These four licences, Cooper, Guy, Sharon and Tamar are being developed alongside partners, which include Tullow Oil, AziNam and NAMCOR.  Significant 3D and 2D surveys and interpretation have been completed with drilling preparations expected to begin in 2018.