Eco (Atlantic) Oil & Gas, the oil and gas exploration company focused on the offshore Atlantic Margins, announces its results for the year ended 31 March 2022.

Financials

• As at 31 March 2022, the Company had cash and cash equivalents of US$3,403,885 and no debt.
• As at 31 March 2022, the Company had total assets of US$45.9 million, total liabilities of US$5.6 million and total equity of US$40.2 million.
• In April and June 2022, post period end, Eco successfully raised combined gross proceeds of US$37.8 million to fund its ongoing workstreams, with the Company’s cash balance as at 29 July 2022 being US$37.7 million. 

Corporate

During the period, Eco announced a number of strategic acquisitions and/or investments in line with the Company’s strategy to expand its high impact exploration portfolio and deliver stakeholder value:

• The acquisition of 100% of Azinam Group Limited (“Azinam”), including Azinam’s entire offshore asset portfolio in Orange Basin South Africa and Namibia, in return for a 16.5% equity stake in the enlarged Group. This transaction completed on 11 March 2022 and was formally approved by the TSXV on 11 May 2022.
• The acquisition of an additional 6.25% Participating Interest in Block 3B/4B, Orange Basin offshore South Africa, for a consideration of US$10 million, which would provide the Company with a total 26.5% interest in the Block. The Company is awaiting satisfaction of the conditions precedent to completion of this transaction, including regulatory approval, and further announcements will be made in due course.
• On 14 March 2022, the strategic acquisition of JHI Associates Inc. (“JHI”), including JHI’s 17.5% Working Interest (“WI”) in the Canje Block offshore Guyana, was announced, however, on 14 June 2022 this transaction was terminated,. Eco remains a significant shareholder in JHI with a holding of 7.3% (with an option to increase its shareholding to 11%).

Operations

On 21 March 2022, Eco announced an updated Competent Person’s Resource Report (“CPR”) on its assets offshore Guyana, Namibia and South Africa.

The report highlights Attributable Best Estimate, Prospective Resources:

• Guyana (Orinduik Block) – Net to Eco 681 mmbbls Oil and 544 BCF Gas
• South Africa (Blocks 2B & 3B/4B) – Net to Eco 864 mmbbls Oil and 309 BCF Gas
• Namibia (4 Blocks) – Net to Eco 6,705 mmbbls Oil and 6,565 BCF Gas 

South Africa – Block 2B

• Block 2B Joint Venture partners have entered into a drilling contract for the Island Innovator semi-submersible rig with Island Drilling Company AS for the upcoming drilling of the Gazania-1 well, offshore South Africa.
• The well will be drilled 25km offshore in 150 meters of water to a depth of approximately 2,800 meters to target a stacked pay section up dip of the AJ-1 discovery and in the proven oil horizon.
• The JV partners remain on track to drill this significant well in Q3 2022, with the rig anticipated to mobilise on or around 8 August 2022 and spud expected during September 2022. The Company plans to seal and plug the well after the test with no remaining equipment left on the sea floor, and further updates on the well spud will be made in due course.

South Africa – Block 3B/4B

• Eco holds a 20% Participating Interest in Block 3B/4B, which is located between 120-250kms offshore South Africa in the Orange Basin directly south of the multibillion barrels discoveries offshore Namibia announced earlier this year by Shell (Graff-1) and TotalEnergies (Venus-1) and has announced the acquisition of a further 6.25% interest, which remains subject to completion.
• The Block Partners are currently finalising the reprocessing of a large 3D seismic survey that will be used to high-grade leads towards identifying drilling targets and preparing for a potential drilling campaign next year.

Guyana – Orinduik Block

• The block partners are currently further defining the Orinduik geological modeling, prospects maturation and upgrading of the drilling targets inventory in an ongoing process. The intent is to provide further definition to the light oil Cretaceous targets’ selection for drilling in the next drilling campaign.

Guyana – Canje Block

• Following termination of the proposed acquisition of JHI, Eco retains an indirect ownership of an interest in the Canje Block offshore Guyana though a 7.3% ownership in JHI.
• On July 5, 2021, the Company announced that it received a detailed update from JHI Associates Inc. The Jabillo-1 well in the Canje Block, offshore Guyana, reached its planned target depth and was evaluated but did not show evidence of commercial hydrocarbons. Jabillo-1 was plugged and abandoned. ExxonMobil (the Block operator) have filed for environmental permit to drill up to an additional 12 exploration wells on the Canje Block over the course of 2023 and 2024.

Namibia

• The Company holds four offshore petroleum licenses in the Republic of Namibia being petroleum exploration license number 097,, petroleum exploration license number 098 (the “Sharon License”), petroleum exploration license number 099 (the “Guy License”) and petroleum exploration license number 100 (the “Tamar License”), (together the “”Namibia Licenses”).
• Eco has a strategically significant acreage position in-country and is progressing its various work programmes across its four blocks offshore Namibia.

Solear Ltd. (formerly Eco Atlantic Renewables [post period end])

• On January 26, 2021, the Company announced the formation of a new company to source, acquire and develop an exclusive pipeline of potential high yield solar energy projects.
• On January 29, 2022, the Company approved to sell the Kozani project in Greece and discontinue the renewable energy business to focus entirely on oil and gas exploration, subsequently announcing on 24 February 2022 that it had entered into an agreement for the sale of the asset. As such, all the assets and liabilities relating to the Kozani project have been reclassified to discontinued operations.
• The Company is awaiting receipt of the balance of consideration due from the acquiror in respect of this disposal, having received to date €120,000, and accordingly retains ownership of the asset.  However, the acquiror has confirmed its commitment to completing the acquisition and the Company is considering a legal claim in the event that the consideration is not received in the coming months.

Outlook:

Guyana

• Guyana continues to be one of the most prolific exploration regions in the world, with approximately 11 billion barrels of oil discovered in the last six years. Eco and its JV partners have already delivered two substantial oil discoveries on the Orinduik Block and the licence continues to offer significant upside potential. With the increase in oil prices the JV partners are revisiting the Jethro discovery commercialisation potential.
• Eco and its JV partners are committed to further drilling on the Orinduik Block and, with its JV partners, are assessing all opportunities available to drill at least two exploration wells into the light oil cretaceous targets as soon as practical. The Company is fully aligned with its JV partners on careful target selection based on the reprocessed 3D and the block and nearby oil discoveries for the next drilling campaign and Eco expects to be able to update the market on further drilling plans in due course.

The Orinduik JV partners are Eco Atlantic (15% working interest (“WI”)), Tullow Guyana B.V. (“Tullow”) (Operator, 60% WI) and TOQAP Guyana B.V. (“TOQAP”) (25% WI) a partnership between TotalEnergies E&P Guyana B.V.  and Qatar Energy.

Namibia

• During the period, two significant hydrocarbon discoveries were made offshore Namibia. TotalEnergies reported a significant discovery of light oil with associated gas on the Venus prospect, located in block 2913B in the Orange Basin. The National Petroleum Corporation of Namibia (“Namcor”) also reported on behalf of the Block 2913A JV Partners, Shell and Qatar Energy, a play opening light oil discovery at its Graff prospect in both the primary and secondary targets.
• Both discoveries, combined with further drilling plans offshore Namibia, have had a material impact on interest in hydrocarbon exploration in the region. Eco is witnessing considerable interest in its licences and is currently assessing options as to how best move forward with progressing exploration and commercial activity on them.

Gil Holzman, President and Chief Executive Officer of Eco Atlantic, commented: 
“The past 12 months have seen us make considerable progress as a business, increasing our geographic footprint and overall acreage considerably, growing the company in some of the most active and exciting oil and gas exploration regions on the globe. This, combined with the improved commodity price conditions, means that interest in exploration activity in the areas where Eco has strategically important acreage has increased significantly.

“Our acquisition of Azinam has paved the way for our exciting near-term drilling campaign at Block 2B, offshore South Africa. The Gazania-1 well, in which we hold a 50% WI, is targeting a 300 million barrel light oil resource, which, if successful, would be transformational for Eco and the partners on the Block. We remain on track to spud the well in September with the rig mobilising from Norway in the next two weeks and we will provide updates as appropriate. At 3B/4B, we chose to increase our acreage position, as we believe that the licence holds significant potential, and we look forward to disclosing further progress on this licence in the medium term.  Namibia has witnessed some of the largest hydrocarbon discoveries made in the world this year, making our strategic acreage in country highly valuable. As one of the largest licence holders in the region, we believe that we will be able to progress our operations in a swift manner.

“In Guyana, we continue to benefit from our interest in the Canje Block, via Eco’s ca.7.3% holding in JHI. The licence remains highly prospective and following the drilling of two wells in 2021, ExxonMobil and the licence partners are currently evaluating next steps. At Orinduik, alongside our partners on the block, we are further defining the geological modeling, prospects maturation and upgrading of the light oil drilling targets inventory, ahead of final target selection for drilling in the next campaign. We look forward to updating our stakeholders on the campaign in the near to medium term while we are making preparations to enter into the next exploration phase under the Orinduik Petroleum Agreement.

“Following the targeted completion of the sale of the Kozani Photovoltaic Park for a total of €1.8 million in the coming months, the Company will be exclusively focused on high impact oil and gas exploration projects and on progressing its near-term drilling opportunities offshore South Africa, Namibia and Guyana.

“Given the significant corporate activity over the last 12-18 months, as a Company we remain very positive about what the future holds and our ability to generate returns for all our stakeholders. The Company possesses highly strategic acreage in exploration hot spots, a robust balance sheet with over US$37m in cash, an entrepreneurial and ambitious management team, and the potential for considerable operational catalysts that can create material and sustainable value for shareholders. As ever, we are excited about what the coming months will bring and look forward to updating the market on our progress over the coming months.”