Eco Atlantic, Enteq Upstream
Eco Atlantic has announced that they and partners, Total and Tullow have contracted a rig, the Stena Forth, to drill the Jethro Lobe prospect on the Orinduik Block offshore Guyana. The rig is expected to be transported at the end of May targeting a June spud date. The agreement also defines a window for a second well on the block, plans of which will be announced in the coming weeks.
This is a landmark in the process for Eco Atlantic who, by industry standards have got this far in record time. The fact that Exxon has to a certain extent de-risked the project with its Hammerhead discovery makes it that much more appealing. Hence the news that the partners will drill not only the Tertiary target similar to Hammerhead which is believed to extend onto Orinduik, but to drill deeper into the Cretaceous section below Jethro.
Whilst this is still exploration it is easy to see why the partners are so excited about it, the speed at which Total farmed-in and how Tullow moved so sharply from Africa shows that. But the major league prize on success would be for Eco investors and whilst risk should be borne in mind the reward potential is in my view genuinely mind boggling. As investors approach spud date they will have the opportunity to take money off the table but not too much, an overused word but for Eco this could easily be a game changer.
I have not forgotten Enteq despite the traumas that it has put us through over the years. Today there is some repayment as the pre-close season trading update makes pleasant reading and things are clearly going well, not before time.
Full year revenue and underlying EBITDA are expected to be ‘materially ahead of expectations ‘ with 2H revenue up approximately 25% and 50% for the full year. With cash balances of $11m at the year end and net assets of $23.3m the company have not only been investing but also conserving cash which they have become adept at over the years of pain. As and when they poke their noses above the parapet I’m looking forward to seeing them again!
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