Mr. Gil Holzman reports

ECO (ATLANTIC) OIL AND GAS LTD ANNOUNCES UNAUDITED RESULTS AND CORPORATE UPDATE

Eco (Atlantic) Oil & Gas Ltd. has released its results for the three and nine months ended Dec. 31, 2019, alongside a corporate and operational update.

Results highlights

Financials:

• As at Dec. 31, 2019, the company had cash and cash equivalents of $25.4-million with no 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 Dec. 31, 2019, Eco had total assets of $27-million, total liabilities of $300,000 and total equity of $26.7-million.

Operations -- Guyana:

• On Aug. 31, 2019, the company announced a major oil discovery on its Orinduik offshore petroleum licence in Guyana. Evaluation of logging data confirms that Jethro-1 is the first discovery on the Guyana licence and comprises high-quality oil-bearing sandstone 55 m reservoir of Lower Tertiary age. The well was cased and is awaiting further evaluation to determine the appropriate appraisal activity.
• On Sept. 16, 2019, the company announced a second oil discovery on the Guyana licence. Evaluation of MWD, wireline logging and sampling of the oil confirms that Joe-1 is the second discovery on the Orinduik licence and comprises a high-quality oil-bearing sandstone 16 m reservoir with a high porosity of Upper Tertiary age.
• Both wells were drilled within budget, with MWD logging tool and conventional wireline, and the reservoirs were considered to be high-quality sands with good permeability.
• Fluid samples were taken in both of the wells and were sent for analysis by the operator. Results of that testing confirm that the samples recovered to date from Jethro-1 and Joe-are mobile heavy crudes with high sulphur content.
• Oil tested to date appears not dissimilar to the commercial heavy crudes currently in production in the North Sea, Gulf of Mexico, the Campos basin in Brazil, Venezuela and Angola.
• The company has engaged a third party consultant with heavy oil development and economics expertise to help conduct preliminary evaluations related to production schemes and commercialization. Technical and commercial evaluation work is continuing and the company is considering alternatives for further drilling and testing and a number of development scenarios and production alternatives. The company remains optimistic in considering the development scenarios and, as the project progresses, will provide further information on plans and timing.
• 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 (771 million barrels of oil equivalent net to Eco) from previous estimate of gross prospective resources of 3,981 million barrels of oil equivalent in March, 2019. 22 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 barrels of oil equivalent;
  • Leads in the Cretaceous section are estimated to contain approximately 3,936 million barrels of oil equivalent.

Outlook

Guyana:

• The block operator has proposed a further fine-tuning analysis of the upper cretaceous reservoirs, and the operator has announced a plan to incorporate the Carapa well data into Orinduik's existing geological models and technical analysis over the coming period. Further, the partners plan to integrate the discoveries at Jethro and Joe with the Carapa discovery with the rest of the regional data now available and to incorporate 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, prospects maturation and target selection on the block are continuing, and the JV partners are working closely to agree the best work program to further explore the prospectivity of the licence.
• Multiple prospects are currently being reviewed with high-graded candidates under consideration for the next drilling program.
• Eco is fully financed and is pushing to drill a minimum of at least one upper Cretaceous target as soon as practically possible for its partners. Consideration is being given to prioritize a stacked multitarget well.

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 continues to progress its various work programs offshore Namibia.
• Eco sees an increasing interest in Namibia by major companies and large IOCs. The company plans to monitor near-term drilling activity in the region and will update the market on developments as appropriate.

Gil Holzman, president and chief executive officer of Eco Atlantic, commented: "After completing a successful drilling campaign in 2019, we continue to benefit from a very strong balance sheet and remain fully funded to conduct further exploration and appraisal drilling activity on the Orinduik block. Our recently updated CPR reaffirms the high prospectivity of the licence and the considerable upside potential contained within the Tertiary and Cretaceous horizons. As such, the JV partners are working on incorporating the learnings gained from other regional discoveries, such as the Carapa well result, into our existing geological models, as this will enable us to identify the most high-value targets on the block.

"While it is Eco's intention, and there remains the potential, to conduct a drilling program later this year, the need to integrate the new data learned from recent discoveries in the region into our understanding of the block's geology may result in further drilling and appraisal activity taking place in the first half of 2021. However, a final decision on further drilling activity and the overall budget will be made in the coming months. It is important to note that we remain convinced of the significant upside of Orinduik, are well funded, have strong shareholders and partners, and are confident that further drilling activity will be conducted as soon as practically possible and will prove the block's potential."

The company's unaudited financial results for three and six months ended Sept. 30, 2019, together with management's discussion and analysis as at Dec. 31, 2019, are available to download on the company's website and on SEDAR.

The following are the company's balance sheet, income statements, cash flow statement and selected notes from the annual financial statements.

                                             INCOME STATEMENT

                                                              Three months ended           Nine months ended     
                                                                        Dec. 31,                    Dec. 31,        
                                                              2019          2018          2019          2018
Revenue
Income from farmout agreement                                   $-   $16,759,307            $-   $16,759,307
Interest income                                            105,802        47,877       410,012       144,852
                                                           105,802    16,807,184       410,012    16,904,159
Operating expenses
Compensation costs                                         265,096       247,330       832,747       771,953
Professional fees                                          138,017        72,295       469,390       172,591
Operating costs                                          1,456,929     1,891,595    16,531,606     3,656,989
General and administrative costs                           500,998       337,005     1,510,568       968,458
Share-based compensation                                    59,504         1,487     7,527,865         4,460
Foreign exchange loss (gain)                               939,036       (96,049)    1,180,886        (4,897)
Total expenses                                           3,359,580     2,453,663    28,053,062     5,569,554
Net profit (loss) and comprehensive (loss)              (3,253,778)   14,353,521   (27,643,050)   11,334,605
Basic and diluted net profit (loss) per
share attributable to equity holders of the parent           (0.02)         0.09         (0.15)         0.07

Subsequent events

On Jan. 9, 2020, a director of the company, elected to exercise 350,000 options at an exercise price of 30 cents. In order to effect a cashless exercise, as permitted under the company's stock option plan, and minimize dilution to shareholders, the board agreed to issue 250,000 common shares in lieu of the 350,000 options intended to be exercised.

The company also granted to the company's investor realtions and marketing manager, options to subscribe for up to 200,000 common shares at a price of $1.20 per share. The options vest equally over three years with the first vesting period occurring on the date of issue and expire five years from the date of issue.

About Eco (Atlantic) Oil & Gas Ltd.

Eco (Atlantic) Oil & Gas is a TSX Venture Exchange- and AIM-quoted oil and gas exploration and production company with interests in Guyana and Namibia, where significant oil discoveries have been made.

The group aims to deliver material value for its stakeholders through oil exploration, appraisal and development activities in stable emerging markets, in partnership with major oil companies, including Tullow, Total and Azinam.

We seek Safe Harbor.