Eco (Atlantic) Oil & Gas - Initiation of Coverage

Highly successful explorer in frontier regions where preparations are underway for fully funded further drilling in Guyana

Eco started trading on the TSX-V in 2011 with Namibian oil interests. 2016 saw the company teaming up with Tullow to acquire a licence in Guyana to explore similar basins in the margins on the other side of the Atlantic Ocean, ahead of becoming dual-listed in 2017. The shares began rising on Eco’s announcement to drill and climbed to 190p+ following the drilling of two discovery wells in Guyana which confirmed the prospectivity of the upper & lower Tertiary fairways. However, the stock price fell by two thirds in a matter of days following Tullow’s news that the wells contained heavy oil with high sulphur content, disappointing the market.

  • Prolific hydrocarbon provinces where Eco teams up with majors

    The acreage in both Guyana and Namibia has huge potential where Eco has a good track record of being able to successfully negotiate farm out deals with majors to develop its projects. Eco is in good shape, with over US$17m in the bank, no debt and is fully funded for further drilling in Guyana.

  • Next door in Guyana, Exxon has discovered more than 9 billion boe

    2021 could potentially see the drilling of two wells into light oil Cretaceous targets - the source of ExxonMobil’s success on the adjoining Stabroek Block where the 120,000 bopd Liza Field went into production in late 2019.

  • Strong acreage position in Namibia could benefit from drilling activity

    Eco’s strategic positioning here could become increasingly more valuable shortly. Rising interest in this area could result in at least four wells being drilled by Total, ExxonMobil, Shell and M&P over the next 12 months.

  • Dramatically under-priced – our risked NPV suggests 448% upside

    A big fall in the stock price provides a good buying opportunity. We initiate coverage of Eco with a target price of 123.54p and Conviction Buy stance.


    Eco (Atlantic) Oil & Gas is a research client of Align Research. Align Research holds an interest in the shares of Eco. Full details of our Company & Personal Account Dealing Policy can be found on our website 

    For full disclaimer information please refer to the last page of the full document. This investment may not be suitable for your personal circumstances. If you are in any doubt as to its suitability you should seek professional advice. This note does not constitute advice and your capital is at risk. This is a marketing communication and cannot be considered independent research.

Table: financial overview
Year to March 2019A 2020A 2021E 2022E
Revenue (C$'000) 16,948 508 500 -
Pre-tax (C$'000) 4,174 (26,660) (15,300) (27,900)
EPS (C$) 0.03 (0.15) (0.08) (0.15)
Source: Company accounts & Align Research