Eco Atlantic makes decent progress in first quarter

Offshore oil and gas explorer Eco Atlantic updated the market on its first quarter on Wednesday, reporting cash and cash equivalents of $2.4m, with no outstanding debt.

The AIM-traded firm added that by 30 August, its cash and cash equivalents had further increased to $4.7m.

Its total assets at the period end on 30 June were valued at $53.31m, while total liabilities stood at $3.56m.

The company’s total equity was listed as $49.75m.

Looking at its operations in Guyana, Eco Atlantic announced on 10 August that it had signed a sale purchase agreement to acquire a 60% operated interest in the Orinduik Block, offshore Guyana.

The acquisition was through its wholly-owned subsidiary Eco Guyana Oil and Gas Barbados, which would acquire Tullow Guyana - a subsidiary of Tullow Oil.

Eco Atlantic said the acquisition would involve a combination of upfront cash and contingent considerations, and remained subject to customary government and joint venture partner approvals.

On completion, Eco Atlantic said it was aiming to drive the exploration process in the Orinduik Block by attracting new partners and proactively engaging in drilling.

Currently, the company holds a 15% working interest in the block.

In South Africa, the company meanwhile said it had made multiple strategic moves.

On 17 July, it issued 1.2 million shares to the Lunn Family Trust, replacing a $0.5m cash consideration due for the acquisition of a 6.25% interest in Block 3B/4B.

Subsequently, on 11 July, Eco Atlantic signed a legally-binding letter of intent with Africa Oil to farm out a 6.25% participating interest in Block 3B/4B for up to $10.5m in cash.

An additional $2.5m was expected on government approval.

In March, a new resource report by Africa Oil confirmed that Block 3B/4B contained an estimated P50 prospective resource of around four billion barrels of oil equivalent, with one billion barrels net to Eco Atlantic.

Finally, in Namibia, the company said it was still keenly interested in its four licences offshore Namibia, particularly following successful drilling activities in the area.

Eco Atlantic said iti was actively assessing farm-out opportunities to progress exploration and commercial activities in the region.

“Our first-quarter results serve as an important opportunity to remind investors of the strategic work which is happening across all areas of the portfolio,” said president and chief executive officer Gil Holzman.

“Recently announced deals in both South Africa and Guyana are examples of the team's efforts to position the portfolio to continue creating high-impact catalysts for investors.

“I am excited for the future and look forward to progressing our work programmes across our entire Atlantic Margin portfolio.”

At 1352 BST, shares in Eco Atlantic Oil & Gas were down 1.54% at 16p.

Reporting by Josh White for Sharecast.com.