By Kiana Wilburg
Eco Atlantic’s 15 percent stake of the oil discovered on the Orinduik Block is currently worth over US$450M. This is according to Eco’s Chief Executive Officer (CEO), Gil Holzman.
During a recent interview with Proactive Investors, a leading source of financial news and share price data, Holzman reminded that to date, there have been two significant discoveries on the block. The official noted that oil was first encountered via Tullow Oil’s drilling efforts, at the Jethro-1 well. It is estimated to hold more than 100 million barrels of recoverable oil.
The second drilling campaign was at the Joe-1 well. Holzman noted that this too proved to be a significant discovery as it is right in the range of the company’s pre-drill estimates which is 75M to 150M barrels of oil. Further to this, the ECO CEO said that the Joe discovery opened a whole new geological horizon offshore Guyana’s basin as it is Upper Tertiary (younger rock).
“So we now have a 100 percent hit rate on the block thus far,” the CEO added.
Next year, Holzman disclosed that the partners, being Tullow Oil, Eco and total, will be drilling four wells one of which is expected to be an Upper Tertiary target like Joe.
He explained that this is being pursued since it is very cheap to drill. Expounding on this front, the CEO said that Joe was drilled for less than US$19M and because of Eco’s 15 percent interest in the block, it would only have to contribute about US$2.8M while standing to gain more than US$100M from the net proceeds.
Holzman said that these estimates along with the fact that its share price jumped by 300 percent in 12 months, leaves Eco feeling very happy with its 15 percent interest in the block.
This newspaper understands that Eco Atlantic is also fully funded for another four to five wells to be drilled on the block next year.
ORINDUIK JV PARTNERS
It was in January 2016 that Eco signed a Petroleum Agreement and is party to a Petroleum Licence with the Government of Guyana and Tullow Oil for the Orinduik Block offshore Guyana.
Tullow Oil as the Operator of the Block paid past costs and carried Eco for the first 1000km2 of the 2550km2 3D Survey. Further, Tullow contributed an extensive 2D seismic data set and interpretation.
The Company’s 2550 km2 3D seismic survey was completed in September 2017, well within the initial four-year work commitment the Company made for the initial 1000km2.
In September 2017, Eco announced that its subsidiary, Eco Atlantic (Guyana) Inc. entered into an option agreement on its Orinduik Block with Total, a wholly owned subsidiary of Total S.A. Pursuant to the option.
Total paid an option fee of US$1 million to farm-in to the Orinduik Block. An additional payment of US$12,500,000 was made when Total exercised its option to earn 25 percent of Eco’s working interest in September 2018.
Following the exercise of the option by Total, the Block’s working interests became: Tullow – 60% (Operator), Total – 25% and Eco – 15%. In October, last, the Government approved of the Total farm-in on the Orinduik Block, which has the potential for almost three billion barrels of oil equivalent.
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