In an Aug. 14, 2019 research note, Pareto Securities analyst Tom Erik Kristiansen reported that Eco Atlantic Oil & Gas Ltd. (EOG:TSX.V; ECAOF:OTCMKTS; ECO:LSE) discovered its first oil at Jethro-1 on the Orinduik block in offshore Guyana and as such, Pareto increased its target price on the company to GBp170 per share from GBp120 (Eco Atlantic's current share price is about GBp117).
Kristiansen pointed out the benefits of the Jethro-1 success, which he described as a "company making event." For one, the discovery further derisks any subsequent targets on the block, including Joe, which is expected to spud soon and has "a relatively high geological chance of success," he wrote. Two, it makes Eco Atlantic an attractive acquisition target.
Also positive for the oil/gas company is its "substantial exploration resource inventory," highlighted Kristiansen. Unrisked gross recoverable resources for Orinduik's tertiary fairway are an estimated 740 million barrels (740 MMbbl) and from the deeper Cretaceous targets, about 2.8 billion. These represent an aggregate resource base net to Eco of about 530 MMbbl with its 15% working interest.
Further, the company looks forward to yet another potential stock moving event later this year, in addition to Joe, Kristiansen noted. That is drilling of the Carapa-1 well on a nearby block, targeting the Cretaceous section.
Pareto has a Buy recommendation on Eco Atlantic.[NLINSERT]
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