Eco Atlantic floats on AIM to develop Guyana oil basin

Eco Atlantic was admitted to trade on London’s Alternative Investment Market on Wednesday to enable the Canadian oil and gas explorer to enhance its offshore exploration programmes in Guyana and Namibia.

As part of the listing, Eco raised £5.09m before expenses from an oversubscribed placing of 31.78m shares with investors at a price of 16p each, which gives the company a market capitalisation of about £18.92m on admission. The company has a total of 118.24m shares in issue.

The funds raised will enable Eco to enhance its seismic exploration programme on the 1.8km Orinduik block in Guyana, which is adjacent to oil giant ExxonMobil's Liza and Payara discoveries, with its partner FTSE 250-listed Tullow Oil.

The company, which is also listed on Canada’s TSX Venture Exchange, said that the with recoverable resources estimated by Exxon to be up to 1.4bn barrels of oil equivalent, the Liza discovery are two of just a handful of billion-barrel discoveries made globally in the last half decade.

The funds will also be used to progress work programmes across its three offshore licences in Namibia, which cover more than 15,000 square km and are estimated to contain over 2.3bn barrels of unrisked prospective resources, and to identify, assess and apply for additional licence interests in Guyana, the Atlantic Margin and West African basins.

Since the company announced it would float on AIM in early January, a second major oil discovery was made by ExxonMobil and its partners on the Stabroek Block offshore Guyana, just 8.5km from Eco’s Orinduik block.

Chief executive Gil Holzman said that this discovery “reinforces the region's prospectivity and emphasises Guyana's status as the location of one of the most exciting and significant discoveries in the world today" and as the "only AIM quoted oil and gas company to hold an oil asset in Guyana, Eco is in a position to provide a unique exposure for investors to this highly prospective region".

He added: “The proceeds from the placing put the company in an ideal position to develop in the coming years into a leading oil and gas exploration and development company, advancing our licences towards production alongside our mid-tier and major oil producing partners which include Tullow Oil and Azimuth”.

Holzman told Digital Look that the Guyana block, where Exxon is expected to be active over the coming year, might result in a noticeable volume of external news-flow around the company's assets, and that Eco has already been approached by other firms interested in a farm-out agreement.

He said the area around the Guyana block is one of the "hottest potatoes at the moment in the exploration world" which why the company went ahead with a 3D seismic programme on the block during the second quarter of 2016, with initial results expected after one or two months.