RNS Number : 8494H

Eco (Atlantic) Oil and Gas Ltd.

29 November 2022

29 November 2022


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

Unaudited Results for the six months ended 30 September 2022

Corporate and Operational Update

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 results for the six months ended 30 September 2022 and to provide a corporate and operational update.


Financials (as at 30 September 2022)

-- The Company had cash and cash equivalents of US$24.6 million and no debt (after paying US$11.3 million, being Eco's cash share of the Block 2B well) as of September 30, 2022.

-- The Company had total assets of US$67.3 million, total liabilities of US$5.7 million and total equity of US$61.6 million.

-- As of November 27, 2022, the Company is expected to have approximately US$ 1 7.5 million cash and cash equivalents at the end of November 2022, following receipt of the initial proceeds from the sale of the Kozani project in the coming days referred to below.


-- On November 28, 2022, the Company closed the sale of its 100% interest in the Kozani Photovoltaic Development Project for total cash proceeds of EUR2.3 million (US$2.4 million). US$2 million is to be received by the Company by close of business on November 30, 2022, and the outstanding balance is expected to be received by year end 2022.

-- After 12 years with the Company, Eco's Non-executive Chairman, Moshe 'Peter' Peterburg has informed the Board of his plans to retire, as such, he will not stand for re-election at the upcoming Annual General Meeting on December 29, 2022, and will step down from the Company with immediate effect. The Company has commenced the process to find a replacement and, in the interim, Peter Nicol, currently a Non-executive Director, will assume the role of interim Non-executive Chairman. Further announcements will be made as appropriate.

-- With regard to the closing of the acquisition of Azinam Group Limited ("Azinam"), and in accordance with the previously announced Share Purchase Agreement, the Company will shortly issue the balance of 1,625,000 Common Shares ("Azinam Shares") to the previous shareholders of Azinam representing the full and final number of Common Shares to be issued in respect of this transaction. These Common Shares are subject to a restrictive hold period of four months and one day (beginning on the date of issuance). The issuance of Common Shares is subject to approval from the TSX Venture Exchange and a further announcement will be made once such approval has been received and the Common Shares issued.


South Africa

Block 2B (post period end)

-- In early October 2022, the Island Innovator Semi-Submersible Drilling Rig arrived on Block 2B, offshore South Africa, and operations on the Gazania-1 Exploration Well commenced.

-- The well was spudded on October 10, 2022, and reached target depth of 2,360m. However, evidence of commercial hydrocarbons was not found, and the well has been plugged and abandoned.

-- The JV Partners submitted a Production Right Application to the Petroleum Agency of South Africa ("PASA") on November 15, 2022, for Block 2B, based on the existing oil discovery of AJ-1 and potential future operations. Well logging has been completed and the JV Partners now have time to conduct further analysis and integrate the well data to allow them to determine the next steps on the Block.

Block 3B/4B

-- The Company and its JV partners are progressing plans to conduct a two-well campaign on Block 3B/4B offshore South Africa.

-- As previously announced by the Operator of Block 3B/4B, a collaborative farm-out process (up to 55% gross WI), has been ongoing, and is now in a farm-out agreement negotiation stage. The JV partners will update the market as appropriate and should a farm-out agreement be concluded.


-- Following recent significant hydrocarbon discoveries offshore Namibia, Eco continues to assess options for progressing exploration and commercial activity on its acreage.

-- Eco is witnessing considerable interest in its licences in Namibia and is currently assessing options, including a potential farm-out.


-- As previously announced, Eco and its JV partners on the Orinduik Block, offshore Guyana, are currently drawing up plans to drill at least one well into light oil Cretaceous targets in the next Petroleum Agreement exploration phase which begins in 2023. Further updates will be made on this matter in due course.

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

"Our main focus during the period, and through to recent weeks, was to execute a safe and environmentally friendly drilling campaign on the Gazania-1 exploration well, offshore South Africa. Although it was disappointing to not announce a commercial discovery, we can be proud of how we conducted our operations, which led to the well being drilled safely and on-time. We are now working with our JV partners on the licence to analyse the well data found and plan our next steps on the Block, which we believe contains significant untapped potential.

On Block 3B/4B, offshore South Africa, we are making steady progress towards conducting a two well drilling campaign on the licence. The drilling preparations and program are expected to commence in 2023 and, as previously announced, a potential farm-out process is also underway on the licence. We look forward to updating the market on both of these workstreams as appropriate.

In Guyana, we remain highly optimistic about the potential contained within the Orinduik Block, and we are working with our JV partners to drill another well as quickly as possible. Guyana remains one of the most exciting exploration hotspots, alongside Orange Basin SA and Namibia, where we also hold a highly strategic acreage position, and we are working hard to deliver value for all our stakeholders across our asset portfolio in the near to medium term.

Finally, on behalf of the Board I would like to thank Moshe Peterburg for his tireless efforts during his tenure as Eco's Chairman for the past 12 years and since inception of the Company. He played a pivotal role in the development and success of the Company to date and we wish him all the best for a happy retirement and are pleased he will remain an important shareholder of Eco."

The Company's unaudited financial results for the three months ended 30 September 2022, together with Management's Discussion and Analysis as at 30 September 2022, are available to 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

                                                          September                  March 31, 
                                                             2022                       2022 
------------------------------------------------  -------------------------  ------------------------- 
                                                          (Unaudited)                 (Audited) 
                                                  -------------------------  ------------------------- 
 Current Assets 
       Cash and cash equivalents                                 24,590,082                  3,438,834 
       Short-term investments                                        52,618                     52,618 
       Government receivable                                         32,656                     27,487 
       Amounts owing by license partners,                            13,764                          - 
       Accounts receivable and prepaid expenses                   2,206,208                    257,911 
       Assets held for sale                                       2,052,326                  2,061,734 
------------------------------------------------  -------------------------  ------------------------- 
   Total Current Assets                                          28,947,654                  5,838,584 
------------------------------------------------  -------------------------  ------------------------- 
 Non- Current Assets 
      Investment in associate                                     9,092,557                  9,277,162 
      Petroleum and natural gas licenses                         29,253,034                 30,753,034 
------------------------------------------------  -------------------------  ------------------------- 
   Total Non-Current Assets                                      38,345,591                 40,030,196 
------------------------------------------------  -------------------------  ------------------------- 
   Total Assets                                                  67,293,245                 45,868,780 
------------------------------------------------  -------------------------  ------------------------- 
 Current Liabilities 
       Accounts payable and accrued liabilities                   3,361,588                  1,931,823 
       Advances from and amounts owing to                            67,406                          - 
        license partners, net 
       Current liabilities related to assets 
        held for sale                                               882,959                    473,254 
      Warrant liability                                           1,395,066                  3,241,762 
 Total Current Liabilities                                        5,707,019                  5,646,839 
   Total Liabilities                                              5,707,019                  5,646,839 
------------------------------------------------  -------------------------  ------------------------- 
       Share capital                                            113,930,574                 63,141,609 
       Shares to be issued                                                -                 20,766,996 
       Restricted Share Units reserve                               569,919                    267,669 
       Warrants                                                  14,778,272                  7,806,000 
       Stock options                                              2,075,897                    958,056 
       Foreign currency translation reserve                     (1,862,829)                (1,309,727) 
       Accumulated deficit                                     (67,905,607)               (51,408,662) 
------------------------------------------------  -------------------------  ------------------------- 
   Total Equity                                                  61,586,226                 40,221,941 
------------------------------------------------  -------------------------  ------------------------- 
   Total Liabilities and Equity                                  67,293,245                 45,868,780 
------------------------------------------------  -------------------------  ------------------------- 

Income Statement

                                          Three months ended                                Six months ended 
                                            September 30,                                    September 30, 
                            ---------------------------------------------  ------------------------------------------------- 
                                      2022                    2021                   2022                      2021 
                            ------------------------  -------------------  ------------------------  ----------------------- 
                                              Unaudited                                        Unaudited 
                            ---------------------------------------------  ------------------------------------------------- 
          Interest income                     36,325                3,911                    56,452                    8,435 
                            ------------------------  -------------------  ------------------------  ----------------------- 
                                              36,325                3,911                    56,452                    8,435 
 Operating expenses : 
           costs                             210,605              206,327                   479,914                  410,087 
           fees                              240,894              142,540                   460,579                  181,499 
          Operating costs                 11,097,960               34,953                13,041,411                  417,818 
          General and 
           costs                             350,864              200,960                   608,154                  309,357 
           compensation                      750,667                5,888                 1,751,886                   11,710 
          Foreign exchange 
           loss                              690,794               99,153                   975,221                   53,222 
                                                                           ------------------------  ----------------------- 
   Total operating 
    expenses                              13,341,784              689,821                17,317,165                1,383,693 
                            ------------------------  -------------------  ------------------------  ----------------------- 
 Operating loss                         (13,305,459)            (685,910)              (17,260,713)              (1,375,258) 
          Fair value 
           change in 
           liability                         415,712              637,189                 1,846,696                  637,189 
          Share of losses 
           of company 
           accounted for 
           at equity                        (92,302)                    -                 (184,605)                        - 
                            ------------------------  -------------------  ------------------------  ----------------------- 
 Net loss for the period 
  from continuing 
  operations                            (12,982,049)             (48,721)              (15,598,622)                (738,069) 
 Loss from discontinued 
  operations, after-tax                    (800,210)            (351,915)                 (898,323)                (488,191) 
 Net loss for the period                (13,782,259)            (400,636)              (16,496,945)              (1,226,260) 
          Foreign currency 
           adjustment                      (441,472)             (21,484)                 (553,102)                  (8,235) 
 Comprehensive loss for 
  the period                            (14,223,731)            (422,120)              (17,050,047)              (1,234,495) 
                            ------------------------  -------------------  ------------------------  ----------------------- 
   Net loss for the period 
    attributed to: 
          Equity holders 
           of the 
           parent                       (12,982,049)            (421,643)              (16,496,945)              (1,226,260) 
          Non-controlling                          -               21,007                         -                        - 
                            ------------------------  -------------------  ------------------------  ----------------------- 
                                        (12,982,049)            (400,636)              (16,496,945)              (1,226,260) 
                            ========================  ===================  ========================  ======================= 
   Basic and diluted net 
    loss per share 
    to equity holders of 
    the parent                               (0.038)              (0.002)                   (0.052)                  (0.006) 
                            ========================  ===================  ========================  ======================= 
   Weighted average number 
    of ordinary shares 
    in computing basic and 
    diluted net loss per 
    share                                343,966,022          198,403,885               319,575,745              191,550,804 
                            ========================  ===================  ========================  ======================= 

Cash Flow Statement

                                                                 Six months ended 
                                                                   September 30, 
                                                            2022                  2021 
                                                         (Unaudited)           (Unaudited) 
                                                    --------------------  -------------------- 
 Cash flow from operating activities 
 Net loss from continuing operations                        (15,598,622)             (738,069) 
 Net loss from discontinued operations                         (898,323)             (488,191) 
 Items not affecting cash: 
   Share-based compensation                                    1,751,886                11,710 
   Depreciation and amortization                                       -                38,124 
   Accrued interest                                                    -                 6,770 
   Revaluation of warrant liability                          (1,846,696)             (637,189) 
   Share of losses of companies accounted                        184,605                     - 
    for at equity 
 Changes in non--cash working capital: 
   Government receivable                                         (5,169)                 8,752 
   Accounts payable and accrued liabilities                    1,601,059               102,372 
   Accounts receivable and prepaid expenses                    (948,297)               (7,730) 
   Reallocation to discontinued operations                     (171,294)                     - 
   Net change in non-cash working capital                        419,113                     - 
    items relating to discontinued operations 
   Advance from and amounts owing to license 
    partners                                                   1,486,236             (247,066) 
--------------------------------------------------  --------------------  -------------------- 
                                                            (14,025,502)           (1,950,517) 
--------------------------------------------------  --------------------  -------------------- 
 Cash flow from investing activities 
  Investment in associate                                              -          (10,000,000) 
  Short-term investments                                               -             1,500,022 
--------------------------------------------------                        -------------------- 
                                                                       -           (8,499,978) 
--------------------------------------------------  --------------------  -------------------- 
 Cash flow from financing activities 
  Proceeds from private placements, net                       35,662,446                     - 
 Issuance of shares                                                    -             4,793,789 
 Exercise of stock options                                        67,406                71,388 
                                                              35,729,852             4,865,177 
--------------------------------------------------  --------------------  -------------------- 
 Increase (decrease) in cash and cash equivalents             21,704,350           (5,585,318) 
 Foreign exchange differences                                  (553,102)                 (671) 
 Cash and cash equivalents, beginning of 
  period                                                       3,438,834            11,807,309 
--------------------------------------------------  --------------------  -------------------- 
 Cash and cash equivalents, end of period                     24,590,082             6,221,320 
--------------------------------------------------  --------------------  -------------------- 

Notes to the Financial Statements

Basis of Preparation

The Condensed Interim 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.


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, Head of Corporate Sustainability      +44(0)781 729 5070 
 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 
 Echelon Capital (Financial Adviser N. 
  America Markets) 
 Ryan Mooney                                         +1 (403) 606 4852 
  Simon Akit                                          +1 (416) 8497776 
   Celicourt (PR)                                      +44 (0) 20 8434 2754 
 Mark Antelme 
  Jimmy Lea 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018 (as amended).

Notes to editors:

About Eco Atlantic:

Eco Atlantic is a TSX-V and AIM-quoted Atlantic Margin-focused oil & 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 holds a 15% Working Interest in the 1,800 km(2) Orinduik Block Operated by Tullow Oil. 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 km(2) in the Walvis Basin.

Offshore South Africa, Eco is Operator and holds a 50% working interest in Block 2B and a 20% Working Interest (to be increased to a 26.25% Working Interest, subject to Completion of the Acquisition announced 27 June 2022) in Block 3B/4B operated by Africa Oil Corp., totalling some 20,643 km (2) .

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November 29, 2022 02:00 ET (07:00 GMT)

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