Audited Results for the Year Ended 31 March 2024

Eco (Atlantic) Oil and Gas Ltd.
30 July 2024
 

30 July 2024

 

ECO (ATLANTIC) OIL & GAS LTD.

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

 

Audited Results for the Year Ended 31 March 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 audited results for the year ended 31 March 2024.

 

Highlights:

 

Financials (as at 31 March 2024)

 

·    The Company had cash and cash equivalents of US$2.97 million and no debt as at 31 March 2024.

Following a significant reduction in costs (including G&A, professional fees and operating expenses) as of the time of publication, Eco has a cash position of ca.US$1.5 million.

·    The Company had total assets of US$31.3 million, total liabilities of US$1.25 million and total equity of US$30.0 million as at 31 March 2024.

 

Post-period end

 

·    Following the successful farm-out deal of Block 3B/4B, Eco expects to receive a first tranche of US$8.3 million during August 2024, subject to customary closing conditions being met. The resultant proceeds are expected to give Eco a cash and cash equivalents position of c.US$10 million, with no near-term capital commitments for operational expenses.

 

Operations:

 

South Africa

 

Block 1 (post-period end)

 

·    In June 2024, Eco announced a Farm-In into Block 1 Offshore South Africa Orange Basin. The Company will acquire a 75% Working Interest ("WI") from Tosaco Energy (Proprietary) Limited ("Tosaco") and will become Operator of a new Exploration Right.

·    Block 1 has significant 2D and 3D seismic data already completed and no additional seismic acquisition or drilling of wells is committed in the three-year carried period. Eco intends to complete the interpretation and analysis required for its planned Work Program with its in-house exploration team. The Farm-in is subject, inter alia, to normal Governmental approvals and no field activity is currently planned that requires environmental permitting.

 

Block 3B/4B

·    In March 2024, Eco and its JV partners signed a farm-out transaction with TotalEnergies EP South Africa B.V., who will become Operator ("TotalEnergies") and QatarEnergy International E&P LLC ("QatarEnergy"). Under the agreement, Eco would retain a 13.75% Participating Interest in Block 3B/4B, offshore the Republic of South Africa.

Post-period end

·    On July 29, 2024, the Company announced the signing of an agreement to sell a 1% interest in Block 3B/4B in exchange for cancellation of all of Africa Oil's shares and warrants in Eco (worth C$ 11.5m). Upon Completion of the transaction, Eco will hold a fully carried 5.25% interest in Block 3B/4B Offshore South Africa, reducing from the current 6.25%.

·    Upon closing, which is expected to occur in August 2024, Total will assume operatorship and will lead the drilling planning and preparations.

Block 2B (post-period end)

 

·    In June 2024, the Company relinquished its 50% WI Operated offshore Block 2B 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"), the regulator for the Government of South Africa.

 

Namibia

 

·    A multi-block farmout process remains underway for all or part of Eco's four offshore Petroleum Exploration Licences ("PEL"): 97, 98, 99, and 100.  Eco holds Operatorship and an 85% Working Interest in each PEL representing a combined area of 28,593 km2 in the Walvis Basin. 

 

Post-period end

 

·    Eco added ~1,383km 2D data licensed on PEL100 (Tamar block) to its database, which is being technically evaluated and interpreted by the team to define additional seismic acquisition areas within the Block, along with new leads and prospects.

 

Guyana

 

·    An active farmout process continues for the offshore Orinduik Block. Eco was encouraged to note the recent news from neighbouring Stabroek block, where the Operator ExxonMobil is planning for a seventh development at Hammerhead.

 

Investor Meet Company

 

·    Gil Holzman, President and Chief Executive Officer will provide an Annual Results Investor Update via Investor Meet Company today at 14:00 BST. The presentation is open to all existing and potential shareholders and questions can be asked at any time during the live presentation. More information about the presentation can be found in the Company's announcement of 24 July 2024.

 

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

 

"We made considerable progress across our asset portfolio during the financial year to 31 March 2024. This has been achieved at a time when we have had a strict focus on costs, which has seen the Company operate with non dilutive financings for the last two years, and agree a farm-out on Block 3B/4B which will significantly increase our cash resources, and leaves tremendous upside potential on the table in the event a discovery is drilled on the block.

 

"In Namibia and Guyana, we have active farm-out processes underway, and we are very upbeat about the number and calibre of the companies we have had in our data rooms. Both jurisdictions remain at the forefront of global hydrocarbon exploration and we are confident of delivering a positive update on both in due course.

 

"We were also pleased to announce the deal with Africa Oil yesterday, which saw us agree the sale of a 1% interest in the Block in exchange for the cancellation of all of AOI's shares and warrants in Eco, worth C$11.5 million. We are grateful to Africa Oil for their support since 2017, and this agreement will enable us to eliminate a c.16% overhang in Eco's shares, which are locked up until the transaction closes and the shares and warrants are cancelled. I would also add that the deal was agreed using an US$840 million valuation for Block 3B/4B, which values Eco's 5.25% holding at ca.US$44 million.

 

"As ever, we continue to work hard to deliver value for all of our stakeholders and we look forward to providing further market updates in due course."

 

The Company's audited financial statement for the year ended 31 March 2024 is 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

 

          

 March 31,

 

March 31,

2024

2023

Assets

 



Current Assets

 



       Cash and cash equivalents

             2,967,005

 

         4,110,734

       Short-term investments

                  13,107

 

              13,107

       Government receivable

                  26,970

 

              22,494

       Amounts owing by license partners

                  49,578

 

            477,578

    Accounts receivable and prepaid expenses

                  38,539

 

         1,529,451

Total Current Assets

             3,095,199

 

         6,153,364





Non- Current Assets

 



    Investment in associate

                          -  

 

         8,612,267

    Petroleum and natural gas licenses

           28,168,439

 

       40,852,020

Total Non-Current Assets

 

       49,464,287

Total Assets

           31,263,638

 

       55,617,651





Liabilities

 



Current Liabilities

       Accounts payable and accrued liabilities

             1,163,546

 

         4,416,789

       Advances from and amounts owing to license partners

                  81,952

 

            286,553

    Warrant liability

                          -  

 

            261,720

Total Current Liabilities

             1,245,498

 

         4,965,062

 

 



Total Liabilities

             1,245,498

 

         4,965,062





Equity

 



       Share capital

         122,088,498

 

     121,570,983

       Restricted Share Units reserve

                920,653

 

            920,653

       Warrants

           14,778,272

 

       14,778,272

       Stock options

             2,900,501

 

         2,804,806

       Foreign currency translation reserve

            (1,568,469)

 

       (1,458,709)

       Accumulated deficit

        (109,101,315)

 

     (87,963,416)





Total Equity

           30,018,140

 

       50,652,589





Total Liabilities and Equity

           31,263,638

 

       55,617,651

 

 

Income Statement

 

 



Year ended

 

March 31,

 


2024

 

2023

Revenue

 




Interest income


                       1,708

 

                    66,571



                       1,708

 

                    66,571

Operating expenses:

 



  

Compensation costs


                   851,068

 

                  905,974

Professional fees


                   589,810

 

                  694,304

Operating costs, net


                2,662,347

 

             33,039,264

General and administrative costs


                   658,443

 

                  848,893

Share-based compensation


                     95,695

 

               2,968,294

Foreign exchange loss (gain)


                   (14,354)

 

                  559,947

Total operating expenses


                4,843,009

 

             39,016,676






Operating loss

 

              (4,841,301)

 

           (38,950,105)






Other Non-Operating Charges and Write-downs

 









Gain on settlement of liability


                   299,360

 

                           -  

Fair value change in warrant liability


                   261,720

 

               2,980,042

Share of losses of associate


                            -  

 

                (664,895)

Write down of investment in associate


              (8,612,267)

 

                           -  

Write down of license


              (8,782,105)

 

                           -  

Net loss for the year from continuing operations, before taxes

 

            (21,674,593)

 

           (36,634,958)

Tax recovery


                   536,694

 

                           -  

Net loss for the year from continuing operations, after taxes

 

            (21,137,899)

 

           (36,634,958)

Gain from discontinued operations, after-tax


                            -  

 

                    80,204

Net loss for the year


            (21,137,899)


           (36,554,754)






Foreign currency translation adjustment


                 (109,760)

 

                (148,982)

Comprehensive loss for the year

 

            (21,247,659)

 

           (36,703,736)






Basic and diluted net loss per share:





     From continuing operations


                       (0.06)

 

                      (0.10)

     From discontinued operations


 -

 

 -

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


            369,287,447

 

           349,622,239

 

Cash Flow Statement

 


Year ended

 

March 31,

2024

 

2023

Cash flow from operating activities - continued operations

 



Net loss from continuing operations

    (21,137,899)

 

         (36,634,958)

Items not affecting cash:




   Share-based compensation

95,695

 

             2,968,295

   Fair value change in warrant liability

         (261,720)

 

           (2,980,042)

   Share of losses of companies accounted for at equity

                     -  


                664,895

   Write down of equity investment

8,612,267

 

                         -  

   Write down of license

8,782,105

 

                         -  

Changes in non‑cash working capital:




   Government receivable

             (4,476)

 

                    4,993

   Accounts payable and accrued liabilities

(3,134,252)

 

2,484,966

   Accounts receivable and prepaid expenses

1,490,912

 

           (1,271,540)

   Advance from and amounts owing to license partners

           223,399


              (191,025)

Cash flow from operating activities - continued operations

(5,333,969)


(34,954,416)





Cash flow from operating activities - discontinued operations

                     -  

 

              (839,029)





Cash flow from investing activities

 



    Short-term investments

                     -  

 

39,511

    Acquisition of interest in property



(1,598,986)

    Acquisition of Orinduik BV

         (700,000)

 

-

    Proceeds from Block 3B/4B farm-out

        5,000,000


                         -  

Cash flow from investing activities - continued operations

4,300,000


(1,559,475)





Cash flow from investing activities - discontinued operations

                     -  

 

             2,507,713





Cash flow from financing activities

 



 Proceeds from private placements, net

                     -  

 

           35,666,089

Cash flow from financing activities

                     -  


35,666,089





Increase (decrease) in cash and cash equivalents

(1,033,969)

 

820,882

Foreign exchange differences

(109,760)

 

(148,982)

Cash and cash equivalents, beginning of year

4,110,734


3,438,834





Cash and cash equivalents, end of year

        2,967,005


             4,110,734

 

 

 

 

**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


 

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 20% 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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