Eco (Atlantic) Oil & Gas Ltd. Announces Unaudited Results and Corporate Update

TORONTO, ON / ACCESSWIRE / February 25, 2022 / Eco (Atlantic) Oil & Gas Ltd. (AIM:ECO)(TSXV:EOG), the oil and gas exploration company with licences in the proven oil provinces of Guyana and Namibia, is pleased to announce its results for the three and nine months ended 31 December 2021, alongside a corporate and operational update.

Results Highlights:

Financials:

• Cash and cash equivalents of US$5.8 million and no debt as of 31 December 2021.
• Total assets of US$19million, current liabilities of US$2 million and total equity of US$17 million as of 31 December 2021.

Operations during and post-period end:

Guyana

• The Company purchased an additional 800,000 common shares in JHI Associates Inc. ("JHI") in return for 1,200,000 new common shares in Eco ("Consideration Shares"). The purchase of the 800,000 common shares in JHI completed on 19 January 2022, increasing the total number of shares held by Eco in JHI to 5,800,000 shares representing c.7.35% of JHI.
• On the Canje Block, Guyana, Eco received a detailed update from JHI Associates Inc. on 30 October 2021 that ExxonMobil had successfully and safely drilled the Sapote-1 well. The well recorded hydrocarbon shows while drilling and in the logging sequence, in a deeper interval than anticipated, but had no shows in the upper primary objective horizon. With sidewall coring and wireline logging complete, ExxonMobil will now work to define the reservoir properties, including porosity and permeability, and the cored samples will be analysed for hydrocarbons.
• On the Orinduik Block, the JV Partners (Eco Atlantic (15% working interest ("WI")), Tullow Guyana B.V. ("Tullow") (Operator, 60% WI) and TOQAP Guyana B.V. ("TOQAP") (25% WI)) are advancing towards finalisation of the target selection process and updating the drilling targets inventory. The partnership aims to establish firm targets in the near-term and advance towards drilling.

Namibia and South Africa

• On 10 January 2022, Eco announced this signing of a binding Memorandum of Understanding ("MOU") to acquire 100% of Azinam Group Limited ("Azinam") (the "Acquisition"), including Azinam's entire offshore asset portfolio, in return for a 16.5% equity stake in Eco (as enlarged by the associated share issuance). Subsequent to this, Eco reported the signing of a definitive Share Purchase Agreement ("SPA") with Azinam on 8 February 2022, which, pending TSX-V approval, is anticipated to lead to the Closing of the transaction imminently.
• Eco is now planning and preparing the drilling of an exploration well on Block 2B in H2 2022, a highly prospective Block with past oil discovery (AJ-1) in the Orange Basin, offshore South Africa, close to the recent Graff-1 discovery by Shell and Qatar Energy.
• In October 2021, Eco completed drafting the four new Joint Operating Agreements ("JOAs") for its new 2021 Petroleum Licenses in the Walvis Basin, offshore Namibia. The Company has received all paying partner approvals on the JOAs and Namibia's Ministry of Mines and Energy has approved Eco Atlantic to be the Operator of all four blocks, which total some 7,065,484 acres (28,593 km²).
• The Company continues to monitor and assess opportunities, both technical and corporate, particularly with the recent Shell Namibia's Graff-1 and TotalEnergies Venus-1 discoveries in the Orange Basin.

Solear Ltd.

• On 24 February 2021, Eco was pleased to announce the successful sale of the Kozani project in Greece by Solear Ltd. ("Solear") at 25% margin and for US$2 million to Nepcoe Capital Partners Ltd ("Nepcoe") and the re-payment of this consideration to Eco Atlantic will be received by the end of February 2022.

Outlook:

Guyana

• Eco continues to work closely with its JV Partners on the Orinduik Block with regard to carrying out further drilling activity on the licence as soon as practically possible. The Partners will likely look to drill at least one of the light oil cretaceous stacked targets after the target selection process is finalised.
• Guyana continues to be one of the most prolific exploration regions in the world, with over ten billion barrels of oil discovered in the last six years.
• Eco are encouraged by recent neighbouring discoveries - ExxonMobil operated Stabroek block Fangtooth-1 discovery in deeper intervals and Santonian sands similar to the shows seen in Sapote-1 well Canje block and by CGX Energy operated Corentyne block, confirming a discovery at the Kawa-1 wildcat, a shelf discovery which is on trend geologically with the Orinduik block.

Namibia and South Africa

• The Company's licences in Namibia cover approximately 28,593 km², with over 2.362 BBOE of prospective P50 resources.
• With the addition of Azinam's offshore portfolio, Eco has expanded upon its strategically significant acreage position in-country and is progressing its various work programmes across its Namibian licences. With the recently announced discoveries at the Graff-1 and Venus-1 the Company continues to witness considerable interest in Namibia from multiple international oil companies.
• Eco is now planning and preparing the drilling of an exploration well on Block 2B in H2 2022, subject to available funding, a highly prospective Block with past oil discovery (AJ-1) in the Orange Basin, rig contract execution expected in the next month along with commencing orders of long lead items. Once the Azinam deal has closed, Eco will become the official operator of the Block.

Corporate:

• Eco continues to evaluate additional asset and corporate opportunities in and around its current areas of operation, with an overarching aim of building Eco into an exploration business of material scale.
• Eco also maintains a strict control over costs throughout the business, which continues to generate material savings, ensuring that Eco remains well capitalised with a strong balance sheet.

Gil Holzman, President and Chief Executive Officer of Eco Atlantic, commented:

"I am excited about the positive and busy start to the year we have made. We announced a transformational deal with the purchase of Azinam's offshore acreage, which will add to our highly strategic acreage position in Namibia and allow us entry into Orange Basin, South Africa. Two important large discoveries offshore Namibia has already been announced this year on trend with our new Orange basin blocks, and our team is working hard on the upcoming drilling campaign on Block 2B in H2 2022 and furthering their technical understanding on Block 3B4B which is geologically on same pathway with Graff-1 and Venus-1.

"We also increased our interest in JHI, via an additional share swap, reinforcing our view that Guyana remains one of the most attractive hydrocarbon provinces in the world. We look forward to announcing our future drilling plans in due course, as we work with our JV Partners on finalising the target selection and drilling plans.

"We were also pleased to play a role in the sale of Solear's Kozani project in Greece for c.US$2 million, which generated a 25% return for Eco shareholders and will now be returned to Eco's treasury.

"Eco continues to assess both asset and corporate opportunities, as well as a number of meaningful catalysts that have the potential to deliver value for all stakeholders, and we look forward to updating the market further in due course."

The Company's unaudited financial results for the three and nine months ended 31 December 2021, together with Management's Discussion and Analysis, are available to download on the Company's website at www.ecooilandgas.com and on Sedar at www.sedar.com.

The following are the Company's Balance Sheet, Income Statements, Cash Flow Statement, and selected notes from the annual Financial Statements. All amounts are in US Dollars, unless otherwise stated.

Balance Sheet

		December 31,				March 31,
		2021				2021
		Unaudited				Audited
Assets
Current assets
Cash and cash equivalents			5,234,103				11,807,309
Short-term investments			52,618				1,552,640
Government receivable			10,253				22,697
Amounts owing by license partners, net			394,839				193,655
Accounts receivable and prepaid expenses			106,261				46,480
			5,798,074				13,622,781
Investment in associate			10,000,000				-
Petroleum and natural gas licenses			1,072,260				1,072,260
Renewable energy licenses			1,364,841				1,411,186
Right of use assets			321,653				332,495
Security deposit			471,380				490,455
Total Assets			19,028,208				16,929,177
Liabilities
Current liabilities
Accounts payable and accrued liabilities			646,719				501,022
Advances from and amounts owing to license partners, net			-				97,153
Short-term portion of lease liability			22,987				22,987
Total current liabilities			669,706				621,162
Warrant liability			1,047,512				-
Lease liability			334,452				325,917
Total liabilities			2,051,670				947,079
Equity
Share capital			61,070,124				59,099,725
Restricted Share Units reserve			267,669				267,669
Stock options			2,663,057				2,675,724
Foreign currency translation reserve			(1,171,172	)			(1,198,097	)
Non-controlling interest			-				(48,674	)
Accumulated deficit			(45,853,140	)			(44,814,249	)
Total Equity			16,976,538				15,982,098
Total Liabilities and Equity			19,028,208				16,929,177

Income Statement

		Three months ended								Nine months ended
		December 31,								December 31,
		2021				2020				2021				2020
		Unaudited								Unaudited
Revenue
Interest income			-				6,123				8,435				41,779
			-				6,123				8,435				41,779
Operating expenses:
Compensation costs			128,724				173,373				712,991				486,999
Professional fees			91,355				80,280				514,378				200,694
Operating costs			660,170				255,477				1,139,962				1,105,892
General and administrative costs			121,569				138,472				430,926				367,742
Share-based compensation			2,373				33,457				14,083				88,277
Interest expense			8,828				-				19,341				-
Foreign exchange gain (loss)			(12,235	)			(32,561	)			40,987				(68,826	)
Total operating expenses			1,000,784				648,498				2,872,668				2,180,778
Fair value change in warrant liability			(1,236,827	)			-				(1,874,016	)			-
Net profit (loss) for the period			236,043				(642,375	)			(990,217	)			(2,138,999	)
Foreign currency translation adjustment			35,160				-				26,925				(87,942	)
Comprehensive profir (loss) for the period			271,203				(642,375	)			(963,292	)			(2,226,941	)
Basic and diluted net loss per share attributable to equity holders of the parent			0.00				(0.00	)			(0.01	)			(0.01	)
Weighted average number of ordinary shares used in computing basic and diluted net loss per share			199,893,636				184,697,723				194,041,560				184,697,723

Cash Flow Statement

		Nine months ended
		December 31,
		2021				2020
		Unaudited
Cash flow from operating activities
Net loss from operations			(990,217	)			(2,138,999	)
Items not affecting cash:
Share-based compensation			14,083				88,277
Depreciation and amortization			57,187				-
Accrued interest			8,535				-
Revaluation of warrant liability			(1,874,016	)			-
Changes in non-cash working capital:
Government receivable			12,444				(20,007	)
Accounts payable and accrued liabilities			145,697				(130,818	)
Accounts receivable and prepaid expenses			(59,781	)			(26,726	)
Advance from and amounts owing to license partners			(298,337	)			(135,313	)
			(2,984,405	)			(2,363,586	)
Cash flow from investing activities
Investment in associate			(10,000,000	)			-
Short-term investments			1,500,022				-
			(8,499,978	)			-
Cash flow from financing activities
Issuance of shares			4,793,789				-
Exercise of stock options			71,388				-
			4,865,177				-
Decrease in cash and cash equivalents			(6,619,206	)			(2,363,586	)
Foreign exchange differences			46,000				46,660
Cash and cash equivalents, beginning of period			11,807,309				18,667,016
Cash and cash equivalents, end of period			5,234,103				16,350,090

Notes to the Financial Statements

Basis of Preparation

The consolidated financial statements of the Company have been prepared on a historical cost basis with the exception of certain financial instruments that are measured at fair value. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

Summary of Significant Accounting Policies

Critical accounting estimates

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized prospectively from the period in which the estimates are revised. The following are the key estimate and assumption uncertainties considered by management.

**ENDS**

For more information, please visit www.ecooilandgas.com or contact the following:

Eco Atlantic Oil and Gas	c/o Celicourt [phone]
Gil Holzman, CEO Colin Kinley, COO Alice Carroll, Head of Marketing and IR	[phone] | [phone]
Strand Hanson Limited (Financial & Nominated Adviser)	[phone]
James Harris Rory Murphy James Bellman
Berenberg (Broker)	[phone]
Emily Morris Detlir Elezi
Celicourt (PR)	[phone]
Mark Antelme Jimmy Lea
Hannam & Partners (Research Advisor)
Neil Passmore	[phone]

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended.

About Eco Atlantic:

Eco Atlantic is a TSX-V and AIM quoted Atlantic margin focused Oil & Gas Exploration Company with offshore license interests in Guyana, Namibia, and South Africa. Eco aims to deliver material value for its stakeholders through its role in the energy transition to explore for low carbon consuming oil and gas in stable emerging markets near to infrastructure.

Offshore Guyana in the proven Suriname-Guyana Basin, the Company holds a 15% Working Interest in the 1,800 km² Orinduik Block Operated by Tullow Oil, and also indirectly through a 6.4% shareholding in JHI Associates Inc. a private company which holds a 17.5% WI in the 4,800km² Canje Block Operated by ExxonMobil. In Namibia, the Company holds Operatorship and 85% Working Interests in four offshore Petroleum Licences: PEL's: 97, 98, 99 and 100 totalling 28,593 km² in the Walvis Basin.

Offshore South Africa, Eco holds Operatorship and 50% WI of Block 2B, and 20% Working Interest of Blocks 3B/4B and Nearshore 3B/4B, totalling some 21,603 km².

Eco Atlantic is also a 100% shareholder in Solear Ltd., Solear is an independent private clean energy investment company focused on low cost, high yield solar development projects in southern Europe.

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SOURCE: Eco (Atlantic) Oil and Gas Ltd.

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