Results for Three-Month Period Ended 30 June 2024

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

GENERAL TEXT AMENDMENT

 

The following amendment(s) have been made to the 'Results for the Three-Month Period Ended 30 June 2024' announcement released on 30.08.2024 at 07:00 under RNS No 3015C.

 

Wording corrections to typos in the body of text.

 

All other details remain unchanged.

 

The full amended text is shown below.

 

 

30 August 2024

 

ECO (ATLANTIC) OIL & GAS LTD.

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

 

Results for the Three-Month Period Ended 30 June 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-month period ended 30 June 2024.

 

Highlights:

 

Financials

 

·    The Company had cash and cash equivalents of US$1.185 million and no debt as at 30 June 2024.

·    The Company had total assets of US$29.65 million, total liabilities of US$0.791 million and total equity of US$28.859 million as at 30 June 2024.

 

Post-period end

·    Following the completion of a farm down of a 13.75% Participating Interest in Block 3B/4B offshore the Republic of South Africa, as announced on 28 August 2024, Eco is due to receive now US$8.3million from the JV partners as part of the milestone payments agreed in the 3B/4B Transaction. This is expected to give Eco a cash and cash equivalents position of over US$9 million on receipt, expected in early September 2024.

 

Operations:

 

South Africa

 

Block 1 (post-period end)

 

·    On June 5, 2024, Eco announced the Farm-In into Block 1 Offshore South Africa Orange Basin. Through 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.

 

Block 3B/4B

 

·    In July 2024, Eco signed an agreement to sell a 1% interest in Block 3B/4B in exchange for cancellation of all of Africa Oil's ("AOI") shares and warrants in Eco (worth approximately C$ 11.5m at the time of agreement). 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%. Closing is expected to occur in Q4 2024.

Post-period end

·    On August 28, 2024, the Company announced the completion of a farm down of a 13.75% Participating Interest in Block 3B/4B offshore the Republic of South Africa and Transfer of Operatorship of the Block after receipt of the requisite regulatory approvals (Section 11) from the government of South Africa.  Eco now holds a 6.25% interest in Block 3B/4B. 

·    Further to the Company's announcement on 6 March 2024 detailing the Farmout Agreement ("FOA"), Azinam Limited, Eco's wholly owned subsidiary, has farmed down a 13.75% Participating Interest in Block 3B/4B, offshore the Republic of South Africa as part of an aggregate 57% farm down transaction along with its Joint Venture Partners Africa Oil SA Corp. and Ricocure (Proprietary) Limited to TotalEnergies EP South Africa S.A.S., who will become Operator and QatarEnergy International E&P LLC.

·    Following Completion, Eco is now due to receive US$8.3million in total as part of the 3B/4B Transaction, including Completion linked milestone payments of US$4m from Africa Oil and US$1.56m from Ricocure, as referred to in the Company's announcement of 6 March 2024. Further payments, amounting to $11.5m will be payable to Eco from TotalEnergies, QatarEnergy and Africa Oil on spudding of the first exploration well.

 

Block 2B

·    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 farm out 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. 

·    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 is encouraged to see the growing activity surrounding its acreage, notably ExxonMobil's plans for a seventh development at Hammerhead in the Stabroek Block.

 

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

 

"We continued to make significant progress across our asset base during the period. On Block 3B/4B, we announced the completion of Eco's farm-out agreement with TotalEnergies and QatarEnergy, which will see Eco receiving US$8.3 million now and additional US$11.5m in the future while maintaining a material fully carried interest in the Block.

 

"We also announced Eco's transaction with AOI, where the Company sold a 1% interest in Block 3B/4B in exchange for cancellation of all of Africa Oil's shares and warrants in Eco amount to 15% of the company. Eco continues to possess significant upside potential and exposure to assets in the Orange Basin offshore South Africa a hugely exciting region for hydrocarbon prospectivity.

 

"Our active farm-out processes in both Namibia and Guyana have seen Eco actively engaged with a number of potential high-calibre partners as we work to monetise these licences as fast as is practically possible for the benefit of all involved. We look forward to providing updates on material developments to all our stakeholders over the coming months."

 

 

The Company's unaudited financial results and Management's Discussion and Analysis for the three months ended 30 June 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

 

          

 June 30,

 

March 31,


2024

Assets

 



Current Assets

 



       Cash and cash equivalents

             1,185,116

 

          2,967,005

       Short-term investments

                  13,107

 

               13,107

       Government receivable

                  16,772

 

               26,970

       Amounts owing by license partners

                115,319

 

               49,578

 Accounts receivable and prepaid expenses

                    2,006

 

               38,539

Total Current Assets

             1,332,320

 

          3,095,199





Non- Current Assets

 



    Petroleum and natural gas licenses

           28,318,439

 

        28,168,439

Total Non-Current Assets

           28,318,439

 

        28,168,439

Total Assets

           29,650,759

 

        31,263,638





Liabilities

 



Current Liabilities

 

       Accounts payable and accrued liabilities

                791,417

 

          1,163,546

 Advances from and amounts owing to license partners

                          -  

 

               81,952

Total Current Liabilities

                791,417

 

          1,245,498

 

 



Total Liabilities

                791,417

 

          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

            (1,600,208)

 

         (1,568,469)

       Accumulated deficit

        (110,228,374)

 

     (109,101,315)





Total Equity

           28,859,342

 

        30,018,140





Total Liabilities and Equity

 

        31,263,638

 

Income Statement

 



Three months ended

 

June 30,

 


2024

 

2023

Revenue

 




Interest income


                       3,211

 

                      1,665



                       3,211

 

                      1,665

Operating expenses:

 



  

Compensation costs


                   199,467

 

                  184,442

Professional fees


                   141,969

 

                    96,003

Operating costs, net


                   541,686

 

                  350,180

General and administrative costs


                   158,025

 

                  112,473

Share-based compensation


                            -  

 

                  111,512

Foreign exchange loss (gain)


                     89,123

 

                  (40,050)

Total operating expenses


                1,130,270

 

                  814,560






Operating loss

 

              (1,127,059)

 

                (812,895)






Other Non-Operating Charges and Write-downs

 









Fair value change in warrant liability


                            -  

 

                  261,720

Share of losses of associate


                            -  

 

                (166,224)

Net loss for the period

 

              (1,127,059)

 

                (717,399)






Foreign currency translation adjustment


                   (31,739)

 

                (295,676)

Comprehensive loss for the period

 

              (1,158,798)

 

             (1,013,075)






Basic and diluted net loss per share:


                     (0.003)

 

                    (0.002)

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


            370,173,680

 

           367,348,680

 

Cash Flow Statement

 


Three months ended

 

June 30,

2024

 

2023

Cash flow from operating activities

 



Net loss from continuing operations

      (1,127,059)

 

              (717,399)

Items not affecting cash:




   Share-based compensation

                     -  


                111,512

   Fair value change in warrant liability

                     -  


              (261,720)

   Share of losses of companies accounted for at equity

                     -  


                166,224

Changes in non‑cash working capital:




   Government receivable

             10,198

 

                  (3,477)

   Accounts payable and accrued liabilities

(372,129)

 

(1,045,330)

   Accounts receivable and prepaid expenses

36,533

 

                  (1,283)

   Advance from and amounts owing to license partners

         (147,693)


                382,277

Cash flow from operating activities

(1,600,150)


(1,369,196)













Cash flow from investing activities

 



    Acquisition of interest in property

         (150,000)


                         -  

Cash flow from investing activities

         (150,000)


-









Cash flow from financing activities

                     -  


                         -  

 




Decrease in cash and cash equivalents

(1,750,150)

 

(1,369,196)

Foreign exchange differences

(31,739)

 

(295,676)

Cash and cash equivalents, beginning of period

2,967,005


4,110,734





Cash and cash equivalents, end of period

        1,185,116


             2,445,862

 

 

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


 

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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