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Eco Atlantic Oil & Gas Ltd

Eco Atlantic mulls additional exploration wells offshore Guyana

Snapshot

  • Oil heavier than expected but potential for more exploration
  • Jethro-Lobe and Joe exploration wells both struck oil offshore Guyana
  • Partnered with Tullow and Total at Orinduik
Eco Atlantic Oil & Gas Ltd -

Quick facts: Eco Atlantic Oil & Gas Ltd

Price: 50.16 GBX

Market: AIM
Market Cap: £92.43 m
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​​​​​​What it does

Eco Atlantic Oil & Gas Ltd (LON:ECO) owns a 15% stake of the Orinduik licence offshore Guyana in the Atlantic Ocean, developed with French giant Total and Irish explorer Tullow Oil.

A farm-out with Total saw its stake reduced from 40% in return for a cash payment of US$12.5mln.

Away from Guyana, Eco owns four licences off the coast of Namibia including 57.5% of the Cooper Block where Tullow was the operator but decided instead to focus on Guyana. 

Eco’s exploration licence at Cooper runs for another three years with a drill ready target (The Osprey Prospect) and it is looking for another partner to help fund the programme.

How is it doing?

Eco made two discoveries in the Guyana licence: the Jethro-1 well encountered 55 metres of net high-quality oil pay, while the Joe-1 well encountered 16 metres of continuous thick sandstone.

Further analysis revealed the reservoir to have a heavier grade than expected, with high levels of sulphur, making it more expensive to be flown on surface and to be treated by refiners.

The company said it will need a higher capital expenditure, but there are chances to tap into the market gap left by Venezuela, where production has tanked leaving many refineries on the US Gulf Coast thirsty for its heavy oil.

The AIM-listed oiler is planning the next steps with joint venture partners to potentially test additional targets, as the block is estimated to hold 20 prospects.

What the boss says, chief executive Gil Holzman

“The issue is the relative challenge of surfacing the oil. In our case we see many supporting ingredients that suggest the oil is commercial and producible.”

“With the shutdown of the Venezuela heavy crude industry, basically, many US Gulf Coast refineries are actually very thirsty for this kind of crude, some have sent idle and some have paid premium to Brent price in order to get this heavy oil… There is very big demand.”

Video

Inflexion points

  • Additional exploration wells in Guyana
  • Further tests on recovered from first two wells
  • Eco says it is funded for another 3/4wells
  • New partner for Namibian assets

Blue Sky

The possibility that Orinduik can be as large as Stabroek

Estimates are for Tertiary Sandstone to contain 1bn barrels of oil

The Cretaceous layer might also contain 3bn barrels, making 4bn in total

In that case, Eco Atlantic would become a very large company very quickly

Namibia assets prove commercial and add to the pipeline.

 

 

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Eco Atlantic chief remains upbeat over Orinduik and buys shares to prove it

Gil Holzman, Eco Atlantic Oil and Gas Limited’s (LON:ECO) chief executive explains why he has topped up his holding in the company and the next steps on the Orinduik block offshore Guyana. Shares in Eco dropped more than 50% when operator Tullow revealed that the oil discovered by the Jethro...

1 week, 6 days ago

3 min read