An anonymous director reports

ECO (ATLANTIC) OIL AND GAS LTD ANNOUNCES AUDITED RESULTS YEAR ENDED 31 MARCH 2020 & UPDATE

Eco (Atlantic) Oil & Gas Ltd. has provided its results for the year ended March 31, 2020, alongside a corporate and operational update.

Results highlights

Financials

As at March 31, 2020, the company had cash and cash equivalents of $26,482,896 ($18,782,196 (U.S.)) with zero debt and remains fully financed for its share of further appraisal and exploration drilling at Orinduik block offshore Guyana of up to $120-million (U.S.) (gross).

As at March 31, 2020, Eco had total assets of $28,205,351 ($20,003,795 (U.S.)), total liabilities of $496,889 ($333,255 (U.S.)) and total equity of $27,708,462 ($19,651,392 (U.S.)).

Operations -- Guyana

• In 2019, the company announced two oil discoveries, Jethro-1 and Joe-1, on its Orinduik offshore petroleum licence in Guyana. Both wells were drilled within budget by the Stena Forth drill ship, with MWD logging tool and conventional wireline.
• Jethro-1 discovery comprised high-quality oil-bearing sandstone 55-metre reservoir of Lower Tertiary age and was drilled with a net cost to Eco of $7.6-million. (U.S.).
• Joe-1 discovery comprises high-quality oil-bearing sandstone 16 m reservoir with a high porosity of Upper Tertiary age and was drilled with a net cost to Eco of $3-million (U.S.).
• Fluid samples analysis results from both of the wells, sent by the operator, confirmed that the samples recovered to date from Jethro-1 and Joe-1 are mobile heavy crudes with high sulphur content, which appears not dissimilar to the commercial heavy crudes in nearby Hammerhead discovery and to those currently in production in the North Sea, Gulf of Mexico, the Campos basin in Brazil, Venezuela and Angola.
• The company engaged an independent third party consultant with heavy oil development and economics expertise to help conduct preliminary evaluations related to various production schemes and commercialization.
• On Feb. 3, 2020, the company announced the filing of a National Instrument 51-101-compliant resource report on the Orinduik block, offshore Guyana, which included:
  • Significant increase in gross prospective resources to 5,141 million barrels of oil equivalent (boe) (771 million boe net to Eco) from previous estimate of gross prospective resources of 3,981 million boe in March, 2019. Twenty-two prospects identified on Orinduik block including 11 leads in the Upper Cretaceous horizon.
  • Majority of the project leads have over a 30-per-cent or better chance of success (COS), enhanced by the recent discovery of light oil in the Carapa-1 well on the Kanuku block to the south of Orinduik.
  • Leads in the Tertiary aged section estimated to contain 1,204 million boe.
  • Leads in the Cretaceous section are estimated to contain approximately 3,936 million boe.

Outlook

Guyana

• In Q1 2020, the Orinduik block operator proposed a further fine-tuning analysis of the Upper Cretaceous reservoirs, announced a plan to incorporate the Kanuku block's Carapa-1 well data into Orinduik's existing geological models and technical analysis.
• Further, the partners approved the 2020 budget and are integrating the discoveries of Jethro-1, Joe-1 and Carapa-1 discovery with the rest of the regional data now available and incorporating these data into a reprocessing of the 3-D seismic already shot on Orinduik. The intent is to provide further definition to the Cretaceous interpretation and target selection for drilling.
• Geological modelling and prospects maturation on the Orinduik block are continuing, which is anticipated to provide further definition to the Cretaceous interpretation and targets' selection for drilling by the end of the calendar year.
• Multiple prospects are currently being reviewed with high graded candidates under consideration for the next drilling program. Eco is fully financed for a further drilling program on the Orinduik block and plans, subject to joint venture partner approval, to drill at least two exploration wells into light oil Cretaceous targets in 2021. Further details will be provided to the market in due course.

The Orinduik JV partners are Eco Atlantic (15-per-cent working interest (WI)), Tullow Guyana BV (operator, 60-per-cent WI) and Total E&P Guyana BV (25-per-cent WI).

Namibia

• Eco's strategic position in-country remains a core part of the company's investment case. Eco continues to progress its various work programs offshore Namibia.
• The company continues to monitor increasing interest in Namibia, which could potentially see up to four exploration wells drilled on behalf of ExxonMobil, Total, Maurel & Prom, and Shell in the next 12 months.

Corporate

• In light of the COVID-19 pandemic and a lower oil price environment, the company implemented a strict cost cutting program throughout the business. The decisive and early action taken yielded significant savings and has ensured the business remains well capitalized, with no debt on the balance sheet, for its 2021 drilling plans.