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Eco Atlantic Oil & Gas Ltd: THE INVESTMENT CASE

Eco Atlantic Oil & Gas offers exposure to frontier-style exploration upside

The explorer has solid partnerships, high-impact prospects and the London IPO bolstered the group’s finances.
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INVESTMENT OVERVIEW: EOG The Big Picture
Exploration prospects offshore Guyana are boosted by significant discoveries

Recent AIM entrant Eco Atlantic Oil & Gas Ltd (LON:ECO, CVE:EOG) is one of few companies on the market that can still offer investors exposure to frontier-style exploration projects.

It has solid partnerships, high-impact exploration prospects and the London IPO bolstered the group’s finances.

Now, progress towards exploration drilling, for the company’s two key focus areas, likely represent the main share price catalysts for the group.

Guyana

Guyana boasts some world class ‘nearology’, with Eco finding itself in the same neighbourhood as Exxon’s significant Liza discovery.

Eco has a 37.5% in some 1,800 square kilometres, partnered with Tullow Oil (LON:TLW) which has 60% of the project.

Aside from the success seen by Exxon, last year was also positive for Eco and Tullow’s earlier stage venture.

Here, the partners are not yet ready to drill for oil, but, indications from seismic data bode well for future success.

Positive findings in 2D seismic data have led the explorers to launch a more sophisticated and larger 3D seismic programme later in 2017.

The 2D has established ‘significant credible leads’ and the follow-up 3D programme, planned for June and July, is expected to give a full and comprehensive understanding of potential drilling targets.

Namibia

Offshore Namibia, meanwhile, is considered a promising but underexplored frontier venture.

That being said, like in Guyana, the names on neighbouring projects also speak to the potential for big discoveries – with Tullow, Repsol, Galp, BP and Petrobras all in the immediate vicinity.

Here, Eco has four licences - Cooper, Sharon, Guy, and Tamar - spanning a total of 23,000 square kilometres in the Walvis basin.

In 2017, the focus is on advancing through the regulatory system in order to secure permitting for drilling on two licences (Cooper and Guy).

The company and its partners have hired contractor Risk Based Solutions to deliver environmental impact assessments as they advance applications for drilling permits. It is anticipated that permits could be secured in the third quarter of this year.

Unique investment proposition

Eco Atlantic joined London’s AIM market in early February, raising around £5mln of new capital to support its exploration programmes.

London has a lot of interest and a lot of understanding in regards to international oil exploration plays, particularly in Africa and emerging markets in South America, Holzman says.

Being partnered with Tullow Oil, in Guyana, also made the decision to list in London “quite easy”, Holzman added.

He also highlighted that London’s AIM market is more liquid and draws on a broader base of investors.

“We try to attract institutional investors here in the City, and we try to attract the retail investors here in the City and we think we have a very unique proposition, a value proposition, to those investors,” Holzman said.

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