RNS Number : 8333N
Eco (Atlantic) Oil and Gas Ltd.
27 November 2024
 

 

27 November 2024

 

ECO (ATLANTIC) OIL & GAS LTD.

("Eco," "Eco Atlantic," "Company," or together with its subsidiaries, the "Group")

 

Results for the Three and Six Month Periods Ended 30 September 2024

 

Eco (Atlantic) Oil & Gas Ltd. (AIM: ECO, TSX  V: EOG), the oil and gas exploration company focused on the offshore Atlantic Margins, is pleased to announce its unaudited results for the three and six month periods ended 30 September 2024.

 

Highlights:

 

Financials

 

·    The Company had cash and cash equivalents of US$7.95 million and no debt as at 30 September 2024.

 

·    The Company had total assets of US$28.74 million, total liabilities of US$1.44 million and total equity of US$27.3 million as at 30 September 2024.

 

·    Following completion of the farm down of Block 3B/4B offshore the Republic of South Africa, as announced on 28 August 2024, Eco has received the first payment of US$8.3 million from the JV partners as part of the milestone payments agreed in the 3B/4B Transaction. An additional $11.5 million is expected to be received by the Company during 2025 when the next milestones are reached.

 

Operations:

 

South Africa

 

Block 1

 

·    On 5 June 2024, Eco announced the acquisition of Block 1 Offshore South Africa Orange Basin. Through its 100% owned subsidiary Azinam South Africa Limited ("Azinam South Africa"), the Company will farm-in and acquire a 75% Working Interest ("WI") from Tosaco Energy (Proprietary) Limited ("Tosaco") and will become Operator of a new Exploration Right (the "Block 1 Acquisition"). 

 

Block 3B/4B

 

·    On 29 July 2024, the Company announced the signing of an agreement to sell a 1% interest in Block 3B/4B South Africa in exchange for cancellation of all of Africa Oil's shares and warrants in Eco (worth C$11.5 million). Upon Completion, Eco, which currently holds a 6.25% interest in Block 3B/4B, will hold a fully carried 5.25% interest in Block 3B/4B Offshore South Africa. Accordingly, the number of shares of the company will be reduced from 370,173,680 to only 315,231,936 shares.

 

·    On 28 August 2024, the Company announced the completion of a farm down of the previously announced 13.75% Participating Interest in Block 3B/4B offshore the Republic of South Africa and the Transfer of Operatorship of the Block after receipt of the requisite regulatory approvals (Section 11) from the government of South Africa. 

 

Block 2B

 

·    The Company is relinquishing its 50% WI Operated offshore Block 2B in South Africa where it drilled its 2022 Gazania-1 well offsetting the AJ-1 oil discovery. The Company has completed all necessary documentation, and environmental audits, and has informed the Petroleum Agency of South Africa ("PASA"), being the regulator for the Government of South Africa. Eco's board considers Block 2B a non-core asset in the portfolio given the Company's interests in Namibia, Block 3B/4B and Block 1 in SA and the 2 blocks in Guyana. Following acceptance by the PASA of this relinquishment, the Company will have no further liability in respect of Block 2B.

 

Namibia

 

·    The previously announced multi-block farm out process for all or part of Eco's four offshore Petroleum Exploration Licences ("PEL"): 97, 98, 99, and 100 has continued.  Eco holds Operatorship and an 85% WI in each PEL representing a combined area of 28,593 km2 in the Walvis Basin.

 

·    Eco Atlantic is witnessing considerable interest in its licenses in Namibia and is currently assessing options to progress its exploration work programmes including a potential farm-out. Eco looks forward to providing more updates on the progress of this process in due course.

 

Guyana

 

·    Eco has continued to engage in discussions with industry players regarding the farm out initiative for the offshore Orinduik Block. Guyana continues to be an exciting jurisdiction for hydrocarbon exploration and production and Eco is pleased to have exposure to this ever-growing frontier.

 

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

 

"We are pleased with the continued operational and financial progress achieved in recent months.  Following completion of the farm-down of Block 3B/4B, we received a payment of US$8.3 million from our JV partners, with the potential for Eco to receive a further US$11.5 million in 2025, subject to certain milestones being achieved on Block 3B/4B. This demonstrated our commitment to unlocking value from our South African portfolio while maintaining exposure to the highly prospective Orange Basin.

 

"Eco also increased its exposure to South Africa's Orange Basin growing offshore energy acreage through the acquisition of a 75% working interest in Block 1, while taking the strategic decision to relinquish Block 2B.  Both of these developments further indicate Eco's ability to take strategically prudent decisions to maximise the Company's exposure to exciting jurisdictions.

 

"With active farm-out discussions ongoing in Namibia and Guyana, we are well-positioned to capitalise on high levels of interest from potential partners in these exciting exploration regions. We remain committed to delivering value for our shareholders and look forward to sharing further updates in the months ahead."

 

 

The Company's unaudited financial results and Management's Discussion and Analysis for the three and six months ended 30 September 2024 are available for download on the Company's website at www.ecooilandgas.com and on Sedar at www.sedar.com.

 

The following are the Company's Balance Sheet, Income Statements, Cash Flow Statement and selected notes from the annual Financial Statements. All amounts are in US Dollars, unless otherwise stated.

 



Balance Sheet

 

          

 September 30,

 

March 31,

2024


2024

Assets

 



Current Assets

 



       Cash and cash equivalents

                    7,946,212

 

          2,967,005

       Short-term investments

                         75,000

 

               13,107

       Government receivable

                         21,938

 

               26,970

       Amounts owing by license partners

                                 -  

 

               49,578

    Accounts receivable and prepaid expenses

                           1,276

 

               38,539

Total Current Assets

                    8,044,426

 

          3,095,199





Non- Current Assets



    Petroleum and natural gas licenses

                  20,695,406

 

        28,168,439

Total Non-Current Assets

                  20,695,406

 

        28,168,439

Total Assets

                  28,739,832

 

        31,263,638





Liabilities

 



Current Liabilities

 

         Accounts payable and accrued liabilities

                       970,881

 

          1,163,546

      Advances from and amounts owing to license partners

                       466,376

 

               81,952

Total Current Liabilities

                    1,437,257

 

          1,245,498

 

 



Total Liabilities

                    1,437,257

 

          1,245,498





Equity

 



       Share capital

                122,088,498

 

      122,088,498

       Restricted Share Units reserve

                       920,653

 

             920,653

       Warrants

                  14,778,272

 

        14,778,272

       Stock options

                    2,900,501

 

          2,900,501

       Foreign currency translation reserve

                  (1,524,581)

 

         (1,568,469)

       Accumulated deficit

              (111,860,768)

 

     (109,101,315)





Total Equity

                  27,302,575

 

        30,018,140





Total Liabilities and Equity

                  28,739,832

 

        31,263,638

 



 

Income Statement

 



Three months ended

 

Six months ended

September 30,

 

September 30,

 


2024

 

2023

 

2024

 

2023

Revenue

 








Interest income


                   4,300

 

                        21


                       7,511

 

                      1,686



                   4,300

 

                        21


                       7,511

 

                      1,686

Operating expenses:

 



  




  

Compensation costs


               271,845

 

               236,556


                   471,312

 

                  420,998

Professional fees


               214,519

 

               202,557


                   356,488

 

                  298,560

Operating costs, net


            1,005,555

 

               411,201


                1,547,241

 

                  761,381

General and administrative costs


               156,588

 

               160,569


                   314,613

 

                  273,042

Share-based compensation


                         -  

 

               (15,817)


                            -  

 

                    95,695

Foreign exchange loss (gain)


               (11,813)

 

               139,795


                     77,310

 

                    99,745

Total operating expenses


            1,636,694

 

            1,134,861


                2,766,964

 

               1,949,421










Operating loss

 

          (1,632,394)

 

          (1,134,840)


              (2,759,453)

 

             (1,947,735)










Other Non-Operating Charges and Write-downs

 

















Gain on settlement of liability


                         -  

 

             (200,640)


                            -  

 

                (200,640)

Fair value change in warrant liability


                         -  

 

                         -  


                            -  

 

                  261,720

Share of losses of associate


                         -  

 

             (166,223)


                            -  

 

                (332,447)

Tax recovery


                         -  

 

               536,694


                            -  

 

                  536,694

Net loss for the period

 

          (1,632,394)

 

             (965,009)


              (2,759,453)

 

             (1,682,408)










Foreign currency translation adjustment


                 75,627

 

                   9,901


                     43,888

 

                (285,775)

Comprehensive loss for the period

 

          (1,556,767)

 

             (955,108)

 

              (2,715,565)

 

             (1,968,183)










Basic and diluted net loss per share:


                 (0.004)

 

                 (0.004)


                     (0.007)

 

                    (0.006)

Weighted average number of ordinary shares used in computing basic and diluted net loss per share


        370,173,680

 

        369,421,234


            370,173,680

 

           368,390,620

 

 



Cash Flow Statement

 

 


Six months ended

 

September 30,

2024

 

2023

Cash flow from operating activities

 



Net loss from continuing operations

          (2,759,453)

 

           (1,682,408)

Items not affecting cash:




   Share-based compensation

                        -  


                  95,695

   Fair value change in warrant liability

                        -  


              (261,720)

   Share of losses of companies accounted for at equity

                        -  


                332,447

Changes in non‑cash working capital:




   Government receivable

                   5,032

 

                  (8,056)

   Accounts payable and accrued liabilities

(192,665)

 

(2,805,578)

   Accounts receivable and prepaid expenses

37,263

 

             1,365,309

   Advance from and amounts owing to license partners

                 41,715


                489,800

Cash flow from operating activities

(2,868,108)


(2,474,511)













Cash flow from investing activities

 



    Short-term investments

               (61,893)

 

                         -  

    Acquisition of interest in property

             (150,000)

 

                         -  

    Proceeds from Block 3B/4B farm-out

            8,015,320


             2,500,000

Cash flow from investing activities

            7,803,427


             2,500,000









Cash flow from financing activities

                        -  


                         -  

 




Increase in cash and cash equivalents

4,935,319

 

25,489

Foreign exchange differences

43,888

 

(285,775)

Cash and cash equivalents, beginning of period

2,967,005


4,110,734





Cash and cash equivalents, end of period

            7,946,212


             3,850,448

 

 

Notes to the Financial Statements

 

Basis of Preparation

 

The consolidated financial statements of the Company have been prepared on a historical cost basis with the exception of certain financial instruments that are measured at fair value. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

 

Summary of Significant Accounting Policies

 

Critical accounting estimates

 

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized prospectively from the period in which the estimates are revised. The following are the key estimate and assumption uncertainties considered by management.

 

 

**ENDS** 

 

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

 

Eco Atlantic Oil and Gas

 

c/o Celicourt +44 (0) 20 8434 2754

Gil Holzman, CEO

Colin Kinley, COO

Alice Carroll, Executive Director

 

 

Strand Hanson (Financial & Nominated Adviser)

 

+44 (0) 20 7409 3494

James Harris

James Bellman


 

Berenberg (Broker)

 

+44 (0) 20 3207 7800

Matthew Armitt

Detlir Elezi


 

Celicourt (PR)

 

+44 (0) 20 7770 6424

Mark Antelme

Jimmy Lea

Charles Denley-Myerson


 

About Eco Atlantic:

 

Eco Atlantic is a TSX-V and AIM-quoted Atlantic Margin-focused oil and gas exploration company with offshore license interests in Guyana, Namibia, and South Africa. Eco aims to deliver material value for its stakeholders through its role in the energy transition to explore for low carbon intensity oil and gas in stable emerging markets close to infrastructure. 

 

Offshore Guyana, in the proven Guyana-Suriname Basin, the Company operates a 100% Working Interest in the 1,354 km2 Orinduik Block. In Namibia, the Company holds Operatorship and an 85% Working Interest in four offshore Petroleum Licences: PELs: 97, 98, 99, and 100, representing a combined area of 28,593 km2 in the Walvis Basin.  Offshore South Africa, Eco holds a 6.25% Working Interest in Block 3B/4B and pending government approval a 75% Operated Interest in Block 1, in the Orange Basin, totalling some 37,510km2

 

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