In its results for the year ended 31 March 2021 Eco Atlantic Oil & Gas (ECO ) told investors that the business has made “significant strides” over the course of the 2021 financial year.
At the group’s Orinduik Block all seismic data reprocessing has been completed and multiple light sweet oil drilling prospects are currently being reviewed by Eco and its licence partners.
The Guyana and Namibia focused oil and gas exploration group said high-graded candidates are being considered for the next drilling programme which Eco intends to drill in 2022.
The Group’s intention is to provide further definition to the upper and lower Cretaceous interpretation and target selection for drilling and that target selection is expected in 3Q21.
Eco informed investors that it is fully funded for further drilling on the Orinduik Block. In June 2021, the Company raised an additional US$4.9m in the form of a private placement while as at 1 March 2021, Eco had US$13 million and no debt and total assets of US$16m.
The Company said it continues to keep a strict control over costs throughout the business, which continues to generate material savings as reflected in the 54% decrease in G&A for the year and has ensured that Eco remains well capitalised with a strong balance sheet.
Eco, together with its strategic partner and substantial shareholder Africa Oil Corp., continues to evaluate additional asset opportunities in both West Africa and South America with a focus on near-term high-impact exploration opportunities, it highlighted to investors.
To date, Eco and its JV Partners have delivered two substantial oil discoveries on the Orinduik Block with this continuing to offer ‘significant upside potential’ and with the recent increase in oil prices, Eco said it will revisit the Jethro discovery commercialisation potential.
In November 2020, Eco successfully negotiated the reissuance of its four licences in Namibia's Walvis Basin for 10 years, which received final Government confirmation this year. The licences cover c.28,593 km2, with over 2.362 BBOE of prospective P50 resources.
Eco said it continues to witness considerable interest from multiple international oil companies in Namibia. In particular, it told investors that it continues to monitor upcoming drilling activity in the region, which could potentially see up to four exploration wells drilled on behalf of ExxonMobil, Total, Maurel & Prom, and Shell in the next 12 months.
Meanwhile, last month, Eco closed a transaction with JHI Associates Inc. ("JHI"), a holder of 17.5% WI in the Canje block offshore Guyana, to acquire up to a 10% interest in JHI.
The transaction has increased Eco’s presence in the Guyana-Suriname basin, to provide exposure to near-term drilling programmes including at least three wells, with the first two firm wells on the Canje Block drilling in 2021 and at least one on the Orinduik Block in 2022.
Gil Holzman, President and Chief Executive Officer of Eco Atlantic, commented. “We see the JHI Transaction as an important step for us, as we look to broaden our presence in Guyana, with the potential for increased future collaboration with the region's existing players.”
In addition, at the start of 2021, Eco formed a new JV company with the aim of sourcing, acquiring and developing an exclusive pipeline of potential high yield solar projects.
The near-term objective of ‘Solear’ is to develop a pipeline of solar assets with competitive rates of return through acquisition, development and construction of solar assets.
The Company highlighted to investors that its strategic investment into Solear Ltd. “has added another attractive asset to the Company's portfolio and shows our determination to deliver value for shareholders through prudent, selective use of our cash reserves.”
Eco said it was “very encouraged” to learn about the Whiptail discovery made by ExxonMobil on the Stabroek block on Thursday which adds to the estimated discovered recoverable resource of 9bn barrels of oil equivalent, highlighting the basin's prospectivity.
Addressing shareholders, Holzman said, "Despite the ongoing macroeconomic backdrop, we remain very positive about what the future holds for Eco Atlantic. We have a resilient business model, a strong cash position and a number of significant near-term catalysts which we believe have the potential to create considerable value for shareholders.”
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Last month, Eco Atlantic said that its partner and operator of the Orinduik Block offshore Guyana, Tullow Oil, is ‘confident’ that the pair can form a new drilling schedule in 3Q21.
Eco, which is ready and prepared to drill a well in 2022, subject to approval by the JV, said seismic reprocessing will be completed this summer with target selection committed to follow.
As Eco plans to outline a new drill programme in 3Q22, the company has highlighted that the Guyana / Suriname Basin is set to mature from its current valuation to potentially 10 FPSOs and over a million barrels of production per day, expected mid-way through this decade.
Eco says this, supported by estimated breakeven prices of US$35, US$25 and US$32 per barrel recently reported by Hess in respect of discoveries on the nearby Stabroek block in the same region, proves extremely positive for the Orinduik partners and company stakeholders. The company highlighted to investors that this has motivated the drive to additional drilling.
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