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Eco Atlantic set for “transformational period” as it selects second well location at Orinduik

The Joe prospect is estimated to host up to 150mln barrels of oil equivalent, with a 43.2% chance of success – which is well above industry averages, said Eco
offshore well
Spudding at Jethro is set to begin in early-June, with Joe to follow in mid-July

Eco Atlantic Oil & Gas Ltd (LON:ECO) and its partners at the Orinduik Block offshore Guyana have selected the location of the second well of the 2019 drilling programme.

In addition to Eco Atlantic (15%), oil and gas supermajor Total (25%) and the regional arm of FTSE 250-listed Tullow Oil plc (LON:TLW) (60%) also have stakes in Orinduik.

READ: Eco's Guyana prospects' estimated to have 4bn barrels of potential resources

For the second well location, the trio has chosen the Joe prospect which is located in around 650 metres of water.

The Stena Forth drill ship has been contracted to start work at the Jethro-Lobe well – the first well in the programme – with spudding to begin in early June. After that, the ship will move on to Joe and begin drilling in mid-July.

Fully funded for 2019 campaign

Eco Atlantic’s share of the costs for the work at Joe, which is estimated to host up to 150mln barrels of oil equivalent, is expected to be around US$3mln.

That is significantly less than the US$6.9mln Eco expects to have to pay for the Jethro-Lobe well as the cost of mobilising and demobilising the drill rig have been incorporated into the cost of the first well.

The AIM company, which also has a listing in Toronto, is fully funded for the 2019 campaign, with US$19mln of cash in the bank.

‘Sign of partners’ confidence’

“The approval, at this stage, of a second well is a clear indication of the partners’ risking of Orinduik,” said chief operating officer Colin Kinley.

“All of the partners support a two well drilling campaign targeting close to 370mln barrels of Gross Prospective Resources (P50 Best) at 43.2% risking, which is well above industry averages anywhere in the world.

“Both the Upper Tertiary age, Joe and Lower Tertiary age, Jethro are excellent targets and have been selected jointly between our Geoscientific Teams.”

President and chief executive Gil Holzman added: “With the selection by the Orinduik Partners of the second well target for our 2019 drilling campaign, we are now set for a transformational period in the life of our company.”

Shares edged 2% higher to 85.7p at the opening bell on Friday.

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