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Traders Recap: Eco (Atlantic) Oil & Gas Ltd. (TSXV:EOG) August 13, 2019 - by Callum Lyon
https://www.newsdone.com/2019/08/13/traders-recap-eco-atlantic-oil-gas-ltd-tsxveog/

13-Aug-19 10:02:14 122.00 2 Unknown* 120.00 124.00 2.44

Spud to TD, 20 days

Significant oil discovery
Excellent sandstone reservoirs
Clear seismic definition
Results de
risk Tertiary plays
Potential upside in Jethro channel
Minimal appraisal required
Supports development options

13-Aug-19 08:45:20 136.336 145,000 Buy* 120.00 125.00 197.69k

Eco runs a tight ship with low levels of G&A (

Without even having drilled a well, Eco appears to have a large resource to appraise on its block (Eco has 3D over the whole discovery). Exxon’s recent Hammerhead discovery in Guyana has the potential to be several hundred-million-barrels and based on the seismic it looks like a large part of the structure could be up dip on Eco’s block. There are regulations in place (Petroleum Act) to ensure unitisation of the discovery if developed. Assuming a 500mmbbl discovery with 50% is on the Orinduik block, at US$5/bbl it alone would be worth 88p/sh unrisked to Eco.

Eco Atlantic Oil and Gas (Eco) is a frontier exploration focused company with significant potential exploration upside in Guyana and Namibia. It is a lean organisation with a highly experienced management team, has a proven track record of exercising Petroleum Agreements and farm-outs, is fully funded for its current planned activity and beyond, has an early mover advantage in its blocks and, we think, management would sell for the right price.

We also highlight the Cretaceous fairway potential on the Orinduik block with a de-risked NAV potential of GBp 536/sh. Although, this horizon is not currently planned to be tested in the 2019 program, exploration success on third-party wells on neighbouring blocks could expedite the drilling of the Orinduik’s Cretaceous targets, which are currently viewed as geologically higher risk with an average CPR GCoS of 22%

Prudent step ahead of its potentially high impact drilling
Even though the company was funded for its two confirmed 2019
exploration wells and for its FY’19-FY’20 G&A, in our opinion, this is a
positive and prudent step by management to strengthen the balance
sheet ahead of the potentially high-impact and company making
drilling campaign offshore Guyana. Success at either Jethro or Joe
could see a significant step-up in the drilling activity on the Orinduik
block (15% W.I. net to Eco) and the company is now in a stronger
position to plan for the potential follow-up program of four additional
wells. Eco has guided to a combined net cost of USD ~10m for Jethro
and Joe and we expect each additional well to cost USD ~3m net to
Eco. We estimate the company to have cash reserves of USD ~35m,
including the net proceeds of this placement.

Guyana well gives Tullow best oil strike with promise for future
https://www.thetimes.co.uk/edition/business/guyana-well-gives-tullow-best-oil-strike-with-promise-for-future-gfphlzfw6

07:48:27 123.207 145,000 178.65k

Jethro Lobe is estimated to have 214.5mln barrels of prospective resources, it is estimated to have a 43.2% chance of success.
Beat estimates and has De-risked the rest of the block.
The Joe prospect, meanwhile, is estimated at 148.3mln barrels also with a 43.2% chance of success. This will be Spud in the next few day and Spud to TD 20 days.

Enjoy the next move up on the share price.

https://www.irishexaminer.com/breakingnews/business/irish-exploration-companies-strike-oil-in-south-america-and-africa-943436.html

We also highlight the Cretaceous fairway (geologically independent play from the Tertiary) on the
Orinduik block with a total gross un-risked prospective resource estimate of ~2,760 mmbbl or ~415
mmbbl net to the company
If the Cretaceous fairway is fully de-risked our fully-risked NAV estimate would increase by more
than GBp 500/share

Eco Atlantic is fully funded for its share of Jethro and Joe (expected to drill immediately after
Jethro) exploration wells plus six further wells on the Orinduik block
In case of exploration success at Jethro, our fully risked NAV estimate for the company would
increase to GBp 147/share from GBp 120/share
However, we highlight that exploration success at Jethro would support follow-on drilling on
Orinduik’s Tertiary fairway with a current aggregate prospective resource estimate of ~740 mmbbl
gross, or ~110 mmbbl net to the company, which if fully de-risked would increase our NAV estimate
to GBp 217/share from GBp 120/share

This discovery significantly de-risks other Tertiary age prospects on the Orinduik licence, including the shallower Upper Tertiary Joe prospect which will commence drilling later this month following the conclusion of operations at the Jethro-1 well
https://oilnow.gy/featured/tullow-strikes-oil-offshore-guyana/

Tullow Oil’s shares rise 17% after discovery in Guyana
https://www.ft.com/content/f86d36fc-bccd-11e9-89e2-41e555e96722

SP will move towards today highs as we moved towards next Spud which should be this week. spud to td is around 20 days. There will be much more interest building up to td this time around.

Spudding of Joe next few days 8 Min. Today results worth in excess of 12 Billion