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Eco Atlantic Oil & Gas to drill its first Guyana exploration well in mid-2019

Having recently completed its farm-out to Total, the AIM-quoted explorer is now fully funded for new drilling in the Orinduik block offshore Guyana where in 2019, it hopes to have at least two wells replicate the big successes experienced nearby by Exxon

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The first well will be drilled in 'late May or early June'

Eco Atlantic Oil & Gas Ltd (LON:ECO) (CVE:EOG) has confirmed that it will drill at least one exploration well offshore Guyana in 2019, with the drilling of the Jethro-Lobe prospect slated for ‘late May / early June’.

The prospect, described as “an Upper Tertiary stratigraphically trapped canyon turbidite”, is estimated to host a potential 250mln barrels of crude resources and it is situated in 1,350 metres of water and will be executed using a conventional drill ship.

READ: Exxon provides one billion more reasons to be excited about Guyana exploration

Eco said its 15% share of the well is expected to incur net costs of US$7.6mln for the Jethro-Lobe well, and, following the recent completion of its farm-out deal with Total, the junior explorer is sufficiently funded, with more than US$20mln in the back at the end of November.

A minimum of two wells is envisaged for the 2019 drill programme.

"The Jethro-Lobe well is the first well approved by the partners for 2019,” said Colin Kinley, Eco chief operating officer.

“As announced by Tullow, there are a number of high-potential additional drilling candidates that are on the top of the interpretation list. The partners are currently evaluating the synergies of drilling a second well in this campaign and are assessing rig timing and budget to drill a second candidate.”

“We have a great deal of confidence in the selection of the Jethro-Lobe drill candidate; the partners are unanimous on the selection of the location, reservoir quality, charge and production characteristics and view this candidate as having a high chance of success and potential for a first discovery.”

Sentiments are evidently high in the camp for the Orinduik partners (Tullow, Total and Eco), largely thanks to the outstanding success experienced by Exxon in the neighbouring Strabroek block where the American oil major last week announced its tenth discovery well.

Exxon at the same time, significantly upgraded its estimate for the blocks overall resource base, seeing some 5bn barrels of crude within the Strabroek discoveries (up from 4bn barrels previously).

The Liza discovery was Exxon’s first and, now, most advanced discovery at Strabroek. The American oiler is working toward field start-up in 2020 with the first phase of production expected to ramp-up to around 120,000 barrels of oil per day before subsequent phases grow output to 750,000 bopd by 2025.

READ: Eco Atlantic Oil & Gas says Total deal confirms Orinduik’s “great value”

“Each successful well drilled on Stabroek lowers Eco's risk on Orinduik," Kinley explained in Wednesday’s statement.

He added: "Our confidence was bolstered even further by the upgraded estimate of the discovered recoverable resource to over 5 billion barrels of oil equivalent on the Stabroek Block, as announced by ExxonMobil and Hess on 3 December 2018.

“Further evaluation of previous discoveries in addition to the tenth discovery on the block, Pluma-1, contributed to the upgrade.”

*Updated in accordance with a replacement to this morning's earlier statement

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Price: 56.5 GBX

AIM:ECO
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Market Cap: £104.11 m
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