Eco (Atlantic) Oil and Gas Ltd Announces Results for the three months ended 30 June 2020

Press Release

Unaudited Results for the three months ended 30 June 2020

Corporate and Operational Update

TORONTO, ON / ACCESSWIRE / August 20, 2020 / Eco (Atlantic) Oil & Gas Ltd. (AIM: ECO, TSX‐V: EOG), the oil and gas exploration company with license interests in Guyana and Namibia, is pleased to announce its results for the three months ended 30 June 2020, alongside a corporate and operational update.

Results Highlights:


  • As at 30 June 2020, the Company had cash and cash equivalents of US$ 17.9 million with zero debt and remains fully funded for its share (15% WI net) of further appraisal and exploration drilling at Orinduik Block offshore Guyana (the “Orinduik Block“) of up to three wells at US$120M (gross).
  • As at 30 June 2020, Eco had total assets of US$19.2 million, total liabilities of US$ 372,138 and total equity of US$18.8 million.
  • 58% cost reduction this quarter in response to COVID-19 strict cost cutting measures taken as of April 2020.
  • The Company has changed its presentation currency from Canadian Dollars to US Dollars to better reflect the business activities and future operations which will be predominantly in US Dollars, and to improve investors’ ability to compare the Company’s results to its industry peers.

Operations – Guyana

  • The Orinduik JV partners (the “Partners“) are further defining the Orinduik geological modeling, previous discoveries, prospects maturation and drilling targets selection. The Partners are also reviewing and incorporating the latest Kanuku Block Carapa-1 light oil discovery up dip and behind Orinduik and additional regional exploration information into the models. The intention is to provide further definition to the Cretaceous interpretation and target selection for drilling.
  • On 30 June 2020, the Company and its Partners on the license approved a budget in the amount of approximately US$5 million through to 31 December, 2020 for 3D reprocessing based on new regional results and target selection. The Company’s share of this budget is US$750,000.



  • Alongside its JV Partners, multiple drilling prospects on the license are currently being reviewed. High-graded candidates will be considered for the next drilling programme.
  • Eco remains fully funded for a further drilling programme on the Orinduik Block and, subject to JV Partner approval, anticipates drilling at least two exploration wells into light oil cretaceous targets in 2021. Further updates on this matter will be made as appropriate.

The Orinduik JV partners are Eco Atlantic (15% working interest (“WI“)), Tullow Guyana B.V. (“Tullow“) (Operator, 60% WI) and Total E&P Guyana B.V. (“Total“) (25% WI).


  • Eco continues to benefit from a strategically significant acreage position in-country and is progressing its various work programmes offshore Namibia. The company is witnessing an increased interest from multiple IOCs in Namibia.
  • The Company continues to monitor upcoming drilling activity in the region, which could potentially see up to five exploration wells drilled on behalf of ExxonMobil, Total, Maurel & Prom, Shell and ReconAfrica in the next 12 months, expected to start Q4 2020.


  • Due to the COVID-19 pandemic and lower oil price environment, Eco took decisive action to quickly reduce costs throughout the business.
  • The Company has decreased its total non-exploration expenses, including general and administration expense and compensation costs incurred during the three months ended June 30, 2020 (Q1 2021), when compared to the three months ended March 31, 2020 (Q4 2020), by 58%.
  • The action generated material significant savings and has ensured the business remains well capitalised, with no debt on the balance sheet, for its 2021 drilling and exploration plans.

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

“The Company has made significant strides towards advancing its asset portfolio in 2020. Due to the actions taken, Eco remains well capitalised and fully funded for a further drilling campaign in Guyana and additional activity elsewhere.

“In Guyana, we have made excellent progress with high grading and further defining multiple highly prospective drilling prospects. Alongside our JV Partners, we firmly believe in the upside potential of the Block and we look forward to recommencing drilling activity in 2021. We look forward to updating the market on our plans in the coming months.

“In Namibia, we continue to see increasing interest in the country’s offshore oil potential, especially with another set of exploration wells planned by other operators over the coming 12 months. We have an important strategic acreage position offshore Namibia and expect any successful drilling activity in the region to benefit us.

“Despite the challenging macro backdrop, Eco has a resilient business model and has taken decisive action to preserve the Company’s liquidity. We continue to benefit from strategically important acreage positions in two exploration hotspots and from a strong partnership and cooperation with our biggest shareholder Africa Oil Corp., and I look forward to updating the market on developments over the coming months.”

The Company’s unaudited financial results for three months ended 30 June 2020, together with Management’s Discussion and Analysis for the three months to 30 June 2020, are available to download on the Company’s website at and on Sedar at

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 Canadian Dollars, unless otherwise stated.

Balance Sheet

  June 30, 2020  March 31, 2020  April 1, 2019 
  Unaudited  Audited  Audited 
Current assets         
Cash and cash equivalents  17,918,133   18,667,016   18,750,453 
Short-term investments  54,900   52,737   56,098 
Government receivable  15,260   19,276   24,821 
Amounts owing by license partners, net  60,966   45,596    
Accounts receivable and prepaid expenses  48,160   46,262   60,678 
   18,097,419   18,830,887   18,892,050 
Petroleum and natural gas licenses  1,117,171   1,117,171   1,117,171 
Total Assets  19,214,590   19,948,058   20,009,221 
Current liabilities
Accounts payable and accrued liabilities  372,138   350,242   317,548 
Amounts owing to license partners, net        845,524 
Total Liabilities  372,138   350,242   1,163,072 
Share capital  59,099,725   59,099,725   37,509,183 
Restricted share units reserve  267,669   267,669   83,597 
Warrants  53,026   53,026   39,570 
Stock options  2,555,467   2,542,824   2,387,837 
Foreign currency translation reserve  (1,081,000)   (1,117,859)   
Accumulated deficit  (42,052,435)   (41,247,569)  (21,174,038)
Total Equity  18,842,452   19,597,816   18,846,149 
Total Liabilities and Equity  19,214,590   19,948,058   20,009,221 

Income Statement

  Three months ended 
  June 30, 
  2020  2019 
Interest income  28,409   126,931 
   28,409   126,931 
Operating expenses:        
Compensation costs  172,304   161,692 
Professional fees  32,615   18,083 
Operating costs  519,677   6,173,380 
General and administrative costs  87,003   394,083 
Share-based compensation  12,643   43,999 
Foreign exchange (gain) loss  9,033   (36,888)
Total expenses  833,275   6,754,349 
Net loss and comprehensive loss  (804,866)   (6,627,418)
Basic and diluted net loss per share attributable to equity holders of the parent  (0.00)   (0.04)
Weighted average number of ordinary shares used in computing basic and diluted net loss per share  184,697,723   180,184,880 

Cash Flow Statement

  Three months ended 
  June 30, 
  2020  2019 
Cash flow from operating activities      
Net loss from operations  (804,866)   (6,627,418)
Items not affecting cash:        
Share-based compensation  12,643   43,999 
Changes in non???cash working capital:        
Government receivable  4,728   8,526 
Accounts payable and accrued liabilities  33,469   (215,378)
Accounts receivable and prepaid expenses     22,866 
Advance from and amounts owing to license partners  (13,280)   3,294,645 
   (767,306)   (3,472,760)
Cash flow from financing activities        
Net proceeds from private placement     16,198,976 
Proceeds from the exercise of stock options     54,104 
Proceeds from the exercise of warrants     120,388 
Increase (decrease) in cash and cash equivalents  (767,306)   12,900,708 
Foreign exchange differences  18,422   581,492 
Cash and cash equivalents, beginning of year  18,667,016   18,750,453 
Cash and cash equivalents, end of period  17,918,133   32,232,653 

Notes to the Financial Statements

Basis of Preparation

The condensed consolidated interim 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.

Summary of Significant Accounting Policies

Critical accounting estimates

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized prospectively from the period in which the estimates are revised. The following are the key estimate and assumption uncertainties considered by management.

Change in functional currency assessment

The functional currency of the Company and its subsidiaries represent the currency of the primary economic environment in which each entity operates. Through to March 31, 2020, all entities were considered to have a functional currency of Canadian Dollars. On March 31, 2020, the Company determined the United States Dollar (“USD”) to be the functional currency for Eco Guyana based on the increased expenditures incurred in USD which is expected to continue in the foreseeable future. On April 1, 2020, the Company determined the USD to be the functional currency for Eco (Atlantic) Oil and Gas Ltd, based on the increase in USD denominated spending as of April 1, 2020. On April 1, 2020, the Company also determined the USD to be the functional currency of Eco Guyana Oil & Gas (Barbados) Ltd, since this entity is 100% owned by Eco Atlantic, and is the 100% owner of Eco Guyana, both of which have functional currencies denominated in USD. The change in estimate has been applied on a prospective basis effective April 1, 2020.

Effective April 1, 2020, the Company also changed its presentation currency from Canadian Dollars to USD. The change in presentation currency is to better reflect the Company’s business activities and to improve investors’ ability to compare the Company’s results to its peers. This change has been applied retroactively as if the Company’s new presentation currency has always been the Company’s presentation currency.