GUYANA 1

Tullow Oil spuds Jethro-Lobe well on the Orinduik Block

JV partner Eco (Atlantic) Oil & Gas announced that operator Tullow Oil commenced drilling operations offshore with the spudding of the first exploration well on its Jethro-Lobe prospect on the Orinduik Block. Hours after the close of the Guyana Oil & Gas Summit Economic Summit in London, Jethro-Lobe was spud at 22:45hrs (Local Guyana time) on Thursday 4th July 2019 using the Stena Forth drillship.

Eco and its partners on the Orinduik Block, Tullow Guyana (Operator, 60% Working Interest (‘WI’)) and Total E&P Guyana (25% WI), estimate the well will take up to 40 days to drill.

Africa Oil holds an approximately 18.8% equity interest in Eco.
Jethro Lobe is the first prospect to be drilled as part of a two-well programme and will be immediately followed by the drilling of an exploration well on the Joe prospect.

Eco is fully funded for its share of up to six potential exploration or development wells on the Orinduik Block in addition to the Jethro Lobe and Joe exploration wells, as announced on 10 June 2019.

Gil Holzman, Chief Executive Officer commented:

‘Today Eco Atlantic’s first Guyana well has been spud, three years ahead of our Petroleum Agreement commitment. This is the start of a hugely exciting time for the Company. Jethro Lobe will test the Lower Tertiary aged turbidites, as well drilling down into the Cretaceous. As such, we await the well results with great anticipation, as they will give us an even greater understanding of the geological plays.

‘The huge success which ExxonMobil has had on the neighbouring Stabroek Block, has aided our geological assessment of the many similar channel systems in our Orinduik Block. With fifteen leads and prospects identified on the Orinduik Block, and funding to drill six potential exploration wells beyond the two currently planned, this is only the start of a fascinating and potentially transformational time for the Company.’

Source: Eco (Atlantic) Oil & Gas

5th July 2019

Jethro-Lobe Spud, Offshore Guyana

Eco (Atlantic) Oil & Gas Ltd. (AIM: ECO, TSX-V: EOG), the oil and gas exploration company with licences in highly prospective regions in Guyana and Namibia, is pleased to announce that drilling operations have commenced offshore Guyana with the spudding of the first exploration well on its Jethro-Lobe prospect on the Orinduik Block. Jethro-Lobe was spud at 22:45hrs (Local Guyana time) on Thursday 4th July 2019 using the Stena Forth drillship.

Eco and its partners on the Orinduik Block, Tullow Guyana B.V. (“Tullow”) (Operator, 60% Working Interest (“WI”)) and Total E&P Guyana B.V. (“Total”) (25% WI), estimate the well will take up to 40 days to drill.

Jethro Lobe is the first prospect to be drilled as part of a two-well programme and will be immediately followed by the drilling of an exploration well on the Joe prospect.

Eco is fully funded for its share of up to six potential exploration or development wells on the Orinduik Block in addition to the Jethro Lobe and Joe exploration wells, as announced on 10 June 2019.

For more information, please visit www.ecooilandgas.com or contact the following:

Eco Atlantic Oil and Gas +1 (416) 250 1955

Gil Holzman, CEO

Colin Kinley, COO

Alan Friedman, Director

Strand Hanson Limited (Financial & Nominated Adviser) +44 (0) 20 7409 3494

James Harris

Rory Murphy

James Bellman

Stifel Nicolaus Europe Limited (Joint Broker)

Callum Stewart

Nicholas Rhodes

Ashton Clanfield +44 (0)20 7710 7600

Berenberg (Joint Broker) +44 (0) 20 3207 7800

Matthew Armitt

Detlir Elezi

Blytheweigh (PR) +44 (0) 20 7138 3204

Tim Blythe

Julia Tilley

Jane Lenton

Hannam & Partners (Research Advisor)

Neil Passmore

Hamish Clegg

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014.

About Eco Atlantic:

Eco Atlantic is a TSX-V and AIM listed Oil & Gas exploration and production Company with interests in Guyana and Namibia where significant oil discoveries have been made.

The Group aims to deliver material value for its stakeholders through oil exploration, appraisal and development activities in stable emerging markets, in partnership with major oil companies, including Tullow, Total and Azinam.

In Guyana, Eco Guyana holds a 15% working interest alongside Total (25%) and Tullow Oil (60%) in the 1,800 km2 Orinduik Block in the shallow water of the prospective Suriname-Guyana basin. The Orinduik Block is adjacent and updip to ExxonMobil and Hess Corporation’s Stabroek Block, on which thirteen discoveries have been announced and over 5.5bboe of oil equivalent recoverable resources are estimated. First oil production is expected from the deep-water Liza Field in 2020.

The Jethro-Lobe prospect, which will be drilled from a conventional drill ship, is a lower Tertiary stratigraphically trapped canyon turbidite in approximately 1,350 meters of water. The targeted prospect is estimated by the Company to hold 214.5mmboe of gross unrisked prospective resources (P50) and the Chance of Success is estimated to be 43.2%.

The Joe prospect is a stratigraphic channel fill and overbank sand body that trends to the northwest on the northern part of the Orinduik Block in approximately 700 meters of water. It is a Tertiary feature. The targeted prospect is estimated by Gustavson Associates to hold 148.3mmboe of gross unrisked prospective oil resources (P50) and the Chance of Success is also estimated to be 43.2%.

The 1800 km2 Orinduik Block is situated in shallow water (70 – 1,400m), 170 km offshore Guyana in the Suriname Guyana basin, and is located 11km up-dip from ExxonMobil’s recent Liza discovery and 6km up-dip from Hammerhead discovery.

Eco holds a 15% working interest in Orinduik, Tullow Oil holds 60% and Total EP Guyana BV (Total) holds 25%, after exercising an option to acquire part of Eco’s interest in September 2018.

The partners have identified multiple leads on the block for which a NI 51-101 compliant CPR report was released in September 2018. A second NI 51-101 compliant CPR report was published in March 2019. The updated CPR estimates an increase in Gross Unrisked Prospective Resources P50 (Best) to 3,981.9 MMBOE on the Block, implying Net (15%) 597.3 MMBOE to Eco, identified across a total of 15 Leads on the Orinduik Block. This was up from 2,913.3 MMBOE in the previous report.

Orinduik Block Snapshot

Area 1800 km2
Water depth 70m to 1,400m
Licence terms 4 years + 2 renewal terms of 3 years

Orinduik Block Milestones
In January 2016, 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 is 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 2550km2 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% of Eco’s working interest in September 2018.

Following exercise of the option by Total, the Block’s working interests became:

Tullow – 60% (Operator)
Total – 25%
Eco Guyana – 15%
Committed Work Programme:
Initial four-year licence term: Conduct (complete) and process 1000 km2 3D seismic programme (2550 km2 was completed in 2017)
First three-year renewal period: Drill one exploration well (contingent)
Second three-year renewal period: Drill one exploration well (optional)

TOTALTEC Oilfield Services

TOTALTEC Oilfield Services, in a partnership with Guyana Shore Base Inc., is set to train over 120 Guyanese in basic safety and oilfield operations over a period of four months.

At the TOTALTEC Oilfield Academy in Houston, East Bank Demerara, (CEO) of TOTALTEC, Lars Mangal, announced the partnership and introduced the first batch of trainees in the programme.

“We are now embarking on a project with the Guyana Shore Base company that’s operating right next door to this facility to recruit, train and develop and employ 120 Guyanese in fulltime employment roles within the Shore Base company and beyond that as well.”

Offshore Innovators

Offshore Innovators Guyana recruited and trained a team of five Guyanese engineers in Subsea Robotics to support deep-water operations offshore. Subsea Specialist hosted the training, delivered by Carlos Sardinha of Blue Laguna Inc US.at the Deepwater Hub in Chaguaramas, Trinidad

The 18-Day program included Remotely Operated Vehicle (ROV) Induction training to meet the International Marine Contractors Association (IMCA) guidelines for entry into the ROV industry. The team trained on two of the most popular work-class ROV platforms in the industry, TechnipFMC’s Schilling HD and Forum’s Perry Slingsby XLX.

The engineers from Warapoka Village, East Bank Demerara, Eact Coast Demerara and Georgetown underwent training in Offshore Survival (BOSIET) including HUET, First Aid, Confined Space Entry, Working at Heights and Rigging and Lifting. The training program was supported by DOF Subsea America who provided accommodation onboard the Skandi Neptune and access to their Forum Perry Slingsby XLX systems for hands on training.

Offshore Innovators subsea personnel development program for Guyana is modeled after the company’s successful local content development program implemented in Trinidad over the last decade. This program has stewarded subsea personnel career development from ROV Trainees to ROV Supervisors, Superintendents and Offshore Client Representatives for the major contractors and operators in the region.

Through the support of Team Trident USA, Offshore Innovators joint venture partner, the Guyanese personnel are afforded the opportunity to access further on-the-job (OJT) training experience offshore. The OJT experience is enhanced by an Offshore Innovators mentorship program where trainees are paired with a Trinidadian Supervisor to help them navigate the competence development and assessment scheme.

The Offshore Innovators Team is focused on supporting the Guyana technology transfer process during the execution of the ExxonMobil Liza Destiny and Liza Unity Projects. The execution of the subsea personnel development program is the first in a series of training programs planned by Offshore Innovators and hosted by Subsea Specialist Ltd, to be delivered in 2019.

“We are excited that our Team of Guyanese ROV personnel have completed their intense training program here in Trinidad and are now well equipped to join the subsea industry in Guyana. Our comprehensive recruitment and selection process has proven successful, producing a great group of talented engineers. We look forward to leveraging the competence of our current Subsea Team as we support the career development of our Guyanese counterparts,” said Dylan Galt, Operations Manager, Offshore Innovators.

UK

As Guyana prepares for first oil , British High Commissioner Greg Quinn urged politicians to work together to ensure that the wealth garnered from the sector reaches all Guyanese in a tangible way in his address to mark the birthday of Queen Elizabeth II.

“As we stand here today, Guyana is on the cusp of unparalleled wealth. That wealth must benefit each and every citizen of this country. Regardless of who they are or where they are. From the coast to the hinterland, from Georgetown to the smallest village – everyone must benefit. Government and opposition must work for all the citizens of Guyana. It is, after all, the Co-operative Republic of Guyana.

“If this does not happen, Guyana will never develop and we will continue to hear the tired old mantra of how much potential Guyana has. There is no question about that potential. But it is up to all the political leadership to do what needs to be done to actually show a desire to move beyond potential to reality. To work for everyone, to benefit everyone. If that does not happen it will be a shameful legacy.”

Guyana is set for initial oil production next year, with ExxonMobil’s Liza Phase 1 forecast to produce up to 120,000 barrels of oil per day at peak rates, a portion of which will accrue to Guyana. The production figure is expected to climb to 750,000 barrels daily by 2025.

With 13 discoveries to date, ExxonMobil in March revised its estimated gross recoverable resource from the Stabroek Block to approximately 5.5 billion oil-equivalent barrels, even as it forges ahead with exploration of the 6.6 million acres (26,800 square kilometers) offshore area it holds.

The British envoy announced that his tour of duty has been extended for one more year, until August 2020 and reflected that since his posting in 2015, there have been differing reactions to his stance on varying issues.

“In the course of my time here, I have made some people happy, and annoyed others. Annoying or upsetting people was (and is) never my intention. But at the same time, I make no apology for anything I have said or done. Everything I have said, I believed needed to be said. Everything I have done needed to be done. I do not apologise for telling the truth and I will continue to do so in my remaining time here.”

Britain’s position on all Guyanese befitting from oil is similar to that of Washington as United States Secretary of State Mike Pompeo, in a congratulatory Independence Anniversary last month, said that the US is ready to assist to ensure that all Guyanese benefit from the country’s oil resources.

“The United States and Guyana have been friends and partners for decades, and we commend and encourage Guyana’s continued leadership on matters of regional concern,” he said, while adding that the American Chamber of Commerce-Guyana continues to create trade partnerships and opportunities, resulting in greater prosperity for both countries.

“As Guyana looks toward production of its oil resources, the United States stands ready to assist to ensure all Guyanese will benefit.” Tthe United States looks forward to a future of strong ties and collaboration based on shared democratic values.

President Granger said that the United Kingdom remains a strategic partner of Guyana. The relationship between the countries provides valuable assistance to Guyana in numerous areas.

“Our relations are founded on the five principles. Those are mutual non-interference in each other’s internal affairs; mutual respect for each other’s territorial integrity and sovereignty; cooperation for mutual benefit; respect for international law and treaties and the maintenance of international peace and security. Britain remains a strategic partner of Guyana. Britain has provided valuable assistance to Guyana in the fields of agriculture, aquaculture, culture, disaster-relief, education, economic competitiveness, governance, investment, law enforcement, trade, water supply and very particularly, reform of the judicial service, public sector and security sector.”

Guyana dedicated the Konashen Protected Area, located in the Rupununi Region and spanning an area of almost 7,000 square kilometres to the Queen’s Commonwealth Canopy – a forest conservation initiative – demonstrating its willingness to take practical steps on the preservation and protection of the environment.

LIZA DESTINY

ExxonMobil funded the trip to Singapore of Head of the Department of Energy and the First Lady for commissioning of its Floating, Production, Storage and Offloading (FPSO) vessel

Liza Destiny, first of a number of vessels, is expected to depart Singapore next month and arrive in Guyana in September to prepare for the start of oil production by the first quarter of 2020 under Exxon’s Liza Phase 1 project in the Stabroek Block, offshore Guyana.

At the dedication ceremony Mrs Granger said that the vessel has been aptly named, while later noting that it will encompass the destinies of the country and all its stakeholders. “I think it is a fitting name… because we are talking about destiny, we are talking long term and we are talking what I believe is vision not only for production but the process behind it. I hope this ship will bring to us the people of Guyana not only prosperity in a physical sense but greater cohesion, greater development and of course, the sustainability of our country and the culture that we all desire. I hope that we will succeed together in this venture.”
President of ExxonMobil’s Upstream Oil and Gas Company Liam Mallon said the dedication of the vessel is a significant event and marks a new beginning for Guyana. “This is an important juncture and the boat has a great journey ahead of it. The work that has been done on this vessel is staggering. It is an absolutely remarkable achievement that this is ready to sail within less than five years of discovery to production. I personally haven’t seen numbers like this since the 1990s. You have set a new industry benchmark. This couldn’t have worked without partnership. This just doesn’t happen. It happens with great teams, enormous trust and enormous respect.”

Mallon noted that the name of the vessel was deliberately chosen for its significance not just for the company but also for Guyana and its population. “Over 1,000 Guyanese have worked on this project in various parts in the world. We think long term and we think about the destiny of a country like Guyana. This is the first of many developments. This is a long term partnership. The boat is designed to produce for decades and so our destinies have been and continue to be linked to Guyana for many years to come.”

ExxonMobil’s local subsidiary, Esso Exploration and Production Guyana Limited (EEPGL) explained that the naming ceremony marks the final stage for the “Liza Destiny” as it readies to set sail for Guyana next month. Final work items are being completed and a series of checks will be performed over the coming weeks.

Chief Executive Officer of Dutch Company SBM Offshore, contracted to construct the ship, Bruno Chabas, said ‘Liza Destiny’ was converted from a VLCC (Very Large Crude Carrier) built by Hyundai Heavy Industries in South Korea, an oil tanker called ‘Tina’. Engineering and design began in December 2016 and work followed in June 2017. Over 3000 persons worked on the vessel which can produce up to 120,000 barrels of oil per day and has a storage capacity of 1.6 million barrels.

Phase 2 of the Liza development is expected to start-up in mid-2022 and will develop approximately 600 million barrels of oil through the ‘Liza Unity’, the second FPSO in the series. The 13 discoveries on the block to date have established the potential for at least five FPSO vessels producing more than 750,000 barrels of oil per day by 2025.

SBM Offshore N.V. is a listed holding company headquartered in Amsterdam, Holland. The release said that it holds direct and indirect interests in other companies that collectively with SBM Offshore N.V. form the SBM Offshore Group. As of December 31, 2018, the Group’s companies employ approximately 4,350 people worldwide.

Observers note the perception of a conflict of interest in having the Head of the DOE and wife of the Minister of Petroleum accepting a trip sponsored by the IOC.

Asked if her company saw the sponsorship of the Singapore trip as an area of conflict of interest, given that Mrs Granger is the wife of the president, who is also the Minister of Petroleum, Deedra Moe, ExxonMobil’s Director of Public and Government Affairs, said, “Traditionally, the ‘Godmother’ of a vessel, particularly in countries new to the industry, is a high-ranking female representative of the Government, such as a First Lady. Given that and her role as First Lady of Guyana, we felt it entirely appropriate and fitting to have Her Excellency Madam Sandra Granger [as] the ‘Godmother’ of the Liza Destiny. We certainly were pleased to host the First Lady and Dr. Bynoe as representatives of the Government of Guyana to participate in the historic occasion of the dedication of Guyana’s first oil production vessel,”

Bynoe and Mrs Granger flew to Singapore for the official dedication of the company’s first FPSO in a ceremony at the Keppel Shipyard, following which they were taken on a guided tour of the vessel..

Government faced scathing criticism for acceptance of sponsorship from the oil major in 2017, when five ministers – Natural Resources , Public Infrastructure , Finance , Business and Foreign Affairs – visited the company’s headquarters, the second visit of its kind and occurred while government was silent up to the time of the trip, about receiving a $18 million signing bonus , in June 2016. There was no official acknowledgement of this by the regime until the information was leaked to the media in December 2017.

UNIVERSITY OF HOUSTON

Instructor, Tom Mitro says the work obligations companies have to fulfill when they acquire a licence for a Guyana’oil block are “almost nothing” by industry standards.

His comments follow an examination of the Production Sharing Agreement (PSA) Guyana signed with ExxonMobil’s subsidiary, Esso Exploration and Production Guyana Limited (EEPGL), and its two other partners, Hess and CNOOC for the Stabroek Block which is 6.6 million acres.
“For a block this size, the minimum work obligations under Section 4.1 are almost nothing – only one exploration well is required every three to six years to justify extending the permit for up to 10 years. That is a very minimal level of commitment by industry standards, especially for a permit of this immense size. For much smaller licences, there is usually a requirement of at least one well every one to two years in order to maintain the licence.”

PSAs between ExxonMobil and Liberia as well as Hess and Ghana show work commitments exceed what is in the PSAs with Stabroek Block operators. and with other firms.

The Canje Block Production Sharing Agreement is another prime example The contractor is expected to complete a minimum work programme in the initial four-year period of the licence,  in two phases.
Phase one consists of 18 months and requires the contractor to get all available geological data and conduct research at the local and regional level to better understand the complex features of the Guyana-Suriname basin. A minimum of 1500 line km of 2D seismic is to be acquired, processed, and interpreted to define possible prospects.
Phase Two consists of 30 months when the contractor is expected to merely acquire, process, and interpret a minimum of 500 square kilometres of 3D seismic to identify drilling targets and complete a geotechnical/pre-drilling survey.
At the end of the initial four years, the Contractor shall elect either to relinquish the entire contract area or relinquish 20 percent of the contract area which spans 6021 km. That is over two times the size of Region Four (Demerara-Mahaica).

The renewal period was due since March 4, last. However, the relinquishment provision is yet to be enforced by the government.