13th Jul 2020 15:40
(Alliance News) - Eco Atlantic Oil & Gas Ltd on Monday reported a swing to an annual loss as the company's farm-out income was not repeated.
In the financial year to March 31, the oil and gas exploration company with license interests in Guyana and Namibia recorded a net loss of CAD26.7 million, about USD19.7 million, compared to a CAD4.2 million profit the year before.
In financial 2019, Eco recorded CAD16.7 million in income from a farm-out agreement, which was not repeated in financial 2020.
The company's interest income rose to CAD507,913 from CAD289,110 the year before.
However, Eco's total expenses more than doubled to CAD27.2 million from CAD12.8 million, after the firm's operating costs tripled to CAD16.9 million from CAD5.4 million.
President & Chief Executive Gil Holzman said: "2019 was a milestone year in Eco's corporate history. We completed a highly successful drilling programme in Guyana, which resulted in two oil discoveries which encountered high quality reservoirs containing mobile heavy crude. The oil we found is similar to other commercial heavy crudes that are planned for production in the area and in production across the world. We remain upbeat about the considerable upside potential that the Orinduik licence possesses, particularly in the Cretaceous horizon which proved to bear light sweet oil in the neighbouring Stabroek and Kanuku Blocks."
Holzman said Eco is now searching for its next drilling targets, expected to take place in 2021, and is "keen" to resume drilling at its Orinduik licence.
"At a corporate level, maintaining Eco's balance sheet strength is a key priority. As such, we took decisive action earlier in the year, implementing a strict cost-cutting programme, which has yielded considerable savings that are expected to result in almost USD1 million in general & administrative and public company costs savings," Holzman added.
The company ended March 31 with CAD26.5 million in cash & cash equivalents and no debt.
Holzman noted Eco remains "highly upbeat" about the coming 12 months.
He continued: "While Covid-19 has had a minor impact on our operations, given Eco's resilient business model and strong cash position, the company is well placed to navigate the downturn and create significant value for shareholders."
Shares in Eco Atlantic Oil & Gas were down 1.5% in London on Monday afternoon at 20.44 pence each.
By Paul McGowan; [email protected]
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