logo-loader
Eco Atlantic Oil & Gas Ltd

Eco Atlantic Oil & Gas raises US$17mln in anticipation of expanded drill campaign offshore Guyana

Ahead of a June spud for its first exploration well, Eco has now got the financial wherewithal to pay its share in up to six wells offshore Guyana

oil and gas operations
The new shares are priced at 80p each

Eco Atlantic Oil & Gas Ltd (LON:ECO) (CVE:EOG) has raised US$17mln of new funds to cover its participation in a possible expansion to the exploration drilling campaign offshore Guyana.

It is selling 16.1mln shares to new and existing investors at a price of 80p per share, only a small discount to Wednesday’s closing price of 83.2p. In afternoon trading, shares in Eco Atlantic were only down 0.6% at 83p.

READ: Eco counts down to drilling as second well location is selected

With the injection of cash, Eco told investors it will be able to fund its share of up to four additional exploration or development wells, perhaps indicating confidence among the joint venture partners ahead of the first phase of wells.

A two-well programme was already in the books for this year – targeting the Jethro-Lobe and Joe prospects - and Eco recently described itself as ‘fully funded’ for those wells. The Jethro-Lobe well is slated to spud in June.

It suggests as many as six wells could potentially be drilled in the Orinduik block, should the first phase of results provide sufficient encouragement.

A rapid campaign would somewhat follow the blueprint of Exxon’s neighbouring Stabroek block, where the US major has rapidly drilled and made discoveries in 12 exploration wells since 2015 (unearthing more than 5bn barrels of crude resources).

Eco last month published the findings of a third-party resource assessment, which indicated some 4bn barrels of exploration potential for its Orinduik asset.

Gil Holzman, Eco chief executive, in a statement, highlighted strong support for the new equity raise which was oversubscribed and was backed by major shareholder Africa Oil Corp.

“The level of demand is a reflection of the quality of Eco's acreage and the potentially transformational drilling programme ahead of us starting in 2 months,” Holzman said.

“We are now very strongly funded for a potential development drilling scenario and additional exploration wells on the Orinduik block."

Eco holds a 15% stake in Orinduik, alongside project operator Tullow Oil and Total which own 60% and 25% respectively.

In a note to clients, analysts at SPAngel said: “News that the Company has raised funds ahead of its drilling programme is a sage move as it achieves two things, it allows the Company to be able to look beyond its immediate programme and in undertaking a raise at these levels, and ahead of the first well, it has captured the excitement of what has been one of the most anticipated drilling campaigns in the last two years.”

 -- Adds share price, analyst comment --

Quick facts: Eco Atlantic Oil & Gas Ltd

Price: 135.5 GBX

Market: AIM
Market Cap: £249.86 m
Follow

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

In exchange for publishing services rendered by the Company on behalf of Eco Atlantic Oil & Gas Ltd named herein, including the promotion by the Company of Eco Atlantic Oil & Gas Ltd in any Content on the Site, the...

FOR OUR FULL DISCLAIMER CLICK HERE

Watch

Solo Oil: Analyst Malcolm Graham-Wood expects 'significant valuation uplift'...

Analyst and commentator Malcolm Graham-Wood says this week's acquisition by Solo Oil (LON:SOLO) of producing natural gas fields in the Dutch section of the North Sea 'ticks all the boxes'. ''I was really impressed by this to be honest''. ''This deal they've done really does hit every nail...

1 week, 4 days ago

3 min read