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(Alliance News) - Eco Atlantic Oil & Gas PLC said on Wednesday it is well-funded as it looks to develop its flagship asset located off the coast of South America.
Eco had cash and cash equivalents of CAD30.7 million, around GBP17.9 million, at the end of September, meaning it is "well funded" to continue with developing Guyana's Orinduik block.
Toronto-based Eco posted a net loss of CAD24.4 million for the six months to September 30 from just CAD3.0 million loss the year prior, mainly due to spending on Orinduik.
Revenue was up 51% to CAD134,415. This was entirely derived from interest income, with Eco not currently holding any producing assets.
During the half, Eco announced oil discoveries at both the Joe and Jethro wells on Orinduik, of which it owns 15%. The rest is owned by Tullow Oil PLC at 60% and France's Total SA the rest.
However, a week ago the partners confirmed analysis of the finds suggested heavy crude with high sulphur content has been found. A consultant with heavy crude experience has been hired to help work out the next steps.
"We ended the first half of our financial year with a very strong balance sheet. After drilling our first two wells in Guyana we now have CAD27.9 of cash and cash equivalents. These funds will be used to continue the evaluation of our two Guyana oil discoveries and to drill additional exploration and potentially appraisal wells on the block in 2020," said Chief Executive Gil Holzman.
"We recognise the market reaction to our last announcement on the oil quality discovered at Jethro and Joe and we are grateful for the continued support of our shareholders. This continues to be an exciting time for the company, as the Orinduik block offers many promising prospects and we continue to work with our partners and third party experts to evaluate our first two discoveries and determine the 2020 drilling targets and budget."
"We expect to announce our drilling plans by the end of January 2020 and we look forward to updating our shareholders on this as appropriate," Holzman added.
Shares were 7.5% lower on Wednesday morning in London at 49.95 pence each. They hit as high as 177p in September following the discoveries, but are a third of where they were just over a week ago.
By George Collard; georgecollard@alliancenews.com
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