In a Jan. 2 research note, Pareto Securities analyst Tom Eric Kristiansen reported that an energy company with property adjacent to that of Eco Atlantic Oil & Gas Ltd. (EOG:TSX.V; ECAOF:OTCMKTS; ECO:LSE) in offshore Guyana, Tullow Oil, hit oil in an exploration well.
Kristiansen relayed that Tullow's Carapa-1 well encountered 4 meters of net pay with high-quality 27-degree API oil. That net pay interval, though smaller than anticipated, demonstrates that "the Cretaceous oil play extends into Tullow's acreage in the region," which includes Eco Atlantic's adjacent Orinduik block, he explained.
Eco Atlantic has not yet announced a drill program for Orinduik, a block with more than 1 billion barrels of oil equivalent of derisked potential, Kristiansen noted. However, when it does pursue drilling there, the Toronto-based oil and gas explorer will likely encompass in its campaign "one or more wells targeting this potential."
Pareto Securities has a Buy recommendation and a GBp100 per share target price on Eco Atlantic. It is currently trading at around GBp57.
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