Eco (Atlantic) Oil & Gas Ltd. (AIM: ECO, TSX-V:EOG), is pleased to provide an operations update on its Orinduik Block offshore Guyana. Eco (Atlantic) Guyana Inc., the Company's subsidiary, currently holds a 40% Working Interest (“WI”), and Tullow Oil (“Tullow”), Operator, holds a 60% WI.
As previously announced, Eco has signed an option agreement with Total (“Total Option Agreement”), under which Total paid the Group US$1 million for the right to farm-in and acquire a 25% WI in the Orinduik Block from Eco for a final consideration of US$12.5 million. The Orinduik Block is on the continental shelf margin updip of the prolific Exxon discoveries, in close proximity to the Liza discoveries. Exxon recently announced resource estimates in excess of 3.2 billion recoverable oil-equivalent barrels in respect of the discoveries and the implementation of engineering and construction work for the Liza field. This is expected to produce first oil from the Liza discoveries by March 2020, with production forecast in excess of 340,000 bbls/day by 2022. Exxon has also had two subsequent discoveries, both of which have development plans underway.
Based on the interpretation of approximately several thousand kilometers of 2D, regional well logs and seismic correlations to the Stabroek wells, Eco and Tullow have identified leads on the Orinduik block, which they estimate could contain in excess of 1 billion boe updip of the Liza discoveries, several of which are age equivalent to the Liza reservoir. As announced on 5 September 2017, the Company and its operating partner Tullow completed a 2,550 km2 3D seismic survey, acquired by Western Geophysical. The high-resolution seismic data is currently being processed at PGS Geophysical AS (“PGS”) in the UK, with both Tullow and Eco already interpreting this data.
Eco also announces today that, in addition to its USA based technical team at Kinley Exploration, it has contracted Gustavson Associates (“Gustavson”) of Colorado to provide independent interpretation services. Gustavson will also provide a CPR under AIM Guidelines and an NI-51-101 report under TSX Guidelines. Gustavson, which has extensive experience in providing resource volumetrics and risking reports for public companies, has worked with the Eco team for many years and has had specific previous experience in the Guyana Basin.
Eco confirms it has now received the initial, conditioned PreSTM, in addition to Fast Track and initial PresSTM data sets from Tullow and, in accordance to the Total Option Agreement, has forwarded this to Total for their interpretation. Eco will receive the next phase of 3D inversion data from Tullow in the coming weeks. In accordance to the Total Option Agreement, once the final processed products/data have been delivered to Total a formal review period will begin, under which Total will have up to 120 days to exercise the Farm-In Option and pay Eco an additional US$12.5 million. Eco will announce the delivery of the completed processed data set at the appropriate time.
Colin Kinley, Director and Chief Operating Officer of Eco Atlantic, commented:
“This is an exciting time for Eco, and we are being careful to ensure a comprehensive and conservative interpretation of the Orinduik data as it is being delivered. We have a great deal of faith in the quality of seismic data processing by PGS, whom we have used many times in the past. Tullow also has a team of leading industry experts who understand the play and are providing an excellent paced and thorough oversite of the data. We are sharing the data with Total now, who have worked on projects with Tullow in the past, as they have significant experience in this stage of the processing and interpretation. This will help the group define drilling targets.
I was delighted that we were able to secure Gustavson as an independent team to work with us on Guyana. Gustavson have extensive expertise and knowledge of the region and will provide a CPR and NI-51-101 on the block as the interpretation matures. Drilling is expected to commence in late 2018 or early 2019 and the potential scale of this resource requires a detailed strategy and confident interpretation.”
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