Although it didn't contain very much material new information, Wednesday’s financial results from Eco Atlantic Oil & Gas Ltd (LON: ECO, CVE:EOG) will have made for reassuring and somewhat exciting reading for investors.
The explorer is partnered with much larger partners in potentially high impact frontier exploration projects. Its Orinduik project, offshore Guyana in the vicinity of Exxon’s successful acreage continues to unearth billion barrel oil discoveries, and it has another in the waters offshore Namibia.
READ: Eco Atlantic Oil & Gas acquires minority interests in Guyana exploration vehicle
Eco finance director Gadi Levin told investors the company is confident that Total will exercise its option to take up a stake in the Tullow Oil-operated Orinduik project, and that would deliver some US$12.5mln to the AIM-quoted explorer.
Total’s decision is expected to follow the findings of recently shot 3D seismic, which covered some 2,550 square kilometres. The first batch of processed data has already been sent to Total, and once it receives the remainder, the potential new partner will have 120 days to exercise its option.
In the meantime, Tullow and Eco are using the new data to identify drilling targets and potential leads.
Namibia
Offshore Namibia, meanwhile, desktop and permitting activities are advancing and at the same time Tullow Oil and Chariot Oil & Gas are planning to drill a well in an adjacent exploration block.
“Our balance sheet remains very strong, following our AIM IPO back in February 2017, the receipt of US$1mln from Total as payment for an option to farm into our Orinduik Block, and the completion of the CAD$14 million private placement with Africa Oil Corp,” Levin said in a statement.
“These transactions, together with the exercise of options and broker warrants, which injected a further CAD$840,000 into our cash reserves, leave us in a robust financial position.”
“We are leveraging these cash reserves to continue to advance all of our exciting licenses, whilst assessing new opportunities in frontier regions, in line with our strategic alliance with Africa Oil Corp giving the area's high prospectivity and large discoveries, we remain confident that Total will exercise its option to farm in to our Orinduik block which could potentially add an additional US$12.5m to our balance sheet."
At the end of the company’s third quarter, December 31, it had some C$14.4mln of cash on hand – and it says the current figure stands at around C$14.7mln.