Eco Atlantic Oil & Gas growing in confidence as Exxon hits another Guyana discovery

Eco Atlantic Oil & Gas Ltd (LON:ECO, CVE:EOG) is growing confident that its 40% owned Orinduik exploration project  has “world class potential” as Exxon Mobil continues to enjoy prolific success on the neighbouring block.

Exxon on Wednesday gave details of its latest discovery offshore Guyana, after news of the oil find emerged.

Pacora-1, Exxon’s latest discovery well, encountered 65 feet of high-quality, oil-bearing sandstone reservoir and the another rig is being mobilised to the location to carry out production operations.

It marked Exxon’s seventh discovery in the Stabroek block where before Pacora there were estimates for more than 3bn barrels of recoverable crude resources. Significantly, to date Pacora is the closest discovery to boundary between Stabroek and Orinduik.

Eco chief executive Gil Holzman, in a statement, said: “This is yet another significant oil discovery on Exxon’s Stabroek Block directly down dip and adjacent to our Orinduik Licence.

“With each well Exxon is further defining the overall scale of this giant field.

Holzman added: “Critically these discovery wells sit down dip from the Eco / Tullow block.

“These thick sand pathways are defining a migration and a charge of this high-quality sand with hydrocarbons.

“Our technical team is working carefully and conservatively to define the resources within Orinduik.

“With experts from Total, Tullow, Gustavson, Eco and Kinley all interpreting the processed data as it becomes available, we are building confidence in the world class potential of this block. This Pacora discovery is very close to our border and has added a new and significantly important dimension to our prospectivity.”

Exxon success puts industry spotlight on Guyanna

Pareto analyst Shahin Amini, in a note on Wednesday, said the latest Exxon discovery will increase industry’s interest in the adjacent acreage and the news will support momentum to Eco’s share price.

Amini said: “Stabroek block has emerged as a world-class asset with a string of discoveries that support the exploration case for the adjacent blocks including Eco’s Orinduik block, which lies up-dip of the existing discoveries.”

The analyst described the recent Eco farm-out to Total as “another strong endorsement” of Orinduik and the prospectivity of the acreage.

“We are optimistic that Total will exercise its option during the second quarter of 2018,” Amini added.

 “In our opinion, Eco Atlantic has a substantial exploration portfolio in two very attractive basins (offshore Guyana and Namibia) as demonstrated by interest from the majors including Total and ExxonMobil.

“We are attracted to the company for its funded exploration programme, substantial exploration upside potential, exposure to near-term catalysts including those by third-parties and an entrepreneurial management team that has led the way in these frontier basins.”

He added: “We consider the company as an attractive investment on a risk-adjusted basis, and a strong addition to a balanced portfolio.”

Story by ProactiveInvestors