Oil and gas company Eco Atlantic has raised cash through a share placement with the proceeds aimed at funding of offshore wells in Guyana.
Eco said on Thursday it has conditionally raised, in aggregate, $17 million before expenses through an oversubscribed placing and subscription of, in aggregate, 16,159,695 new common shares of no par value in the capital of the company at a price of 80 pence per common share.
“Funds raised will be used to fund Eco’s share of up to four potential new exploration or development wells, in addition to the committed Jethro and Joe wells scheduled to drill in 2019, as well as for general corporate purposes,” Eco said.
Eco is a partner with a 15 percent share in the Tullow Oil-operated Orinduik block offshore Guyana. French oil firm Total is also a partner in the block.
The Orinduik Block partners in November 2018, approved the initial 2019 work plan and budget for the first Orinduik exploration well – the 250 million barrel Jethro-Lobe Tertiary prospect. This prospect, believed to be similar to the Exxon Hammerhead discovery in the adjacent Stabroek block, is scheduled to be drilled in June using the Stena Forth drillship.
The partners last week approved the drilling budget and the location of the second well – the Joe prospect. The plan is to start drilling the Joe well immediately after the completion of the Jethro drilling, in mid-July 2019.
Joe is a 150 mmboe (P50 – Best Estimate) Upper Tertiary target which has a 43.2% chance of success, as estimated in the recently published independent (NI51-101 Compliant) report produced by Gustavson Associates.
Commenting on the cash raise, Gil Holzman, President and CEO of Eco, said: “We are delighted with the level of support from new and existing institutional shareholders for the Fundraising which was oversubscribed. We thank existing shareholders and welcome new shareholders to the Company. The level of demand is a reflection of the quality of Eco’s acreage and the potentially transformational drilling program ahead of us starting in 2 months. We are now very strongly funded for a potential development drilling scenario and additional exploration wells on the Orinduik block.”
The Orinduik Block has recently been given a boost to 3,981 mmboe Gross Prospective Resources (P50) from previously estimated 2,913 mmboe, following an independent competent person’s report by Gustavson Associates.
The operator Tullow has described the upcoming wells as high-risk, high potential prospects. Apart from the Orinduik block wells, Tullow will be involved in another well in Guyana this year, named the Carapa. The Carapa prospect will be tested on the Repsol-operated Kanuku license in the third quarter of 2019.
In 2018, Tullow increased its equity share in the Kanuku licence, offshore Guyana, from 30% to 37.5% through a farm-in deal with Repsol.
Offshore Energy Today Staff
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