Eco Atlantic ends 2026 debt-free as BP and Navitas deals reshape exploration portfolio

What do Eco Atlantic's results tell investors?

Eco (Atlantic) Oil & Gas has reported a larger annual loss, but the more important story lies in its balance sheet and portfolio restructuring.

The offshore explorer ended 31 March 2026 with US$10.7 million of cash and no debt. That provides some financial breathing room as Eco works to complete transactions with BP and Navitas across Namibia and South Africa.

The company is still loss-making and does not report production revenue. Its investment case therefore depends heavily on regulatory approvals, partner commitments and future exploration success.

For investors, the year was less about near-term earnings and more about securing well-funded partners while preserving exposure to potentially valuable offshore licences.

Eco Atlantic's key financial figures

Metric	2026	2025
Cash and cash equivalents	US$10.8 million	US$4.7 million
Total assets	US$30.7 million	US$21.6 million
Total liabilities	US$12.9 million	US$1.2 million
Total equity	US$17.8 million	US$20.4 million
Net loss	US$7.5 million	US$2.3 million
Operating cash outflow	US$3.7 million	US$5.5 million
Net loss per share	US$0.023	US$0.006

Cash increased following a direct equity subscription completed in January 2026. Eco raised US$10 million net, equivalent to £7.4 million, through the issue of 26,909,091 new shares to Israeli institutional investors.

Each subscription share also came with one warrant. Warrants give holders the right to acquire shares under specified conditions and can create future dilution if exercised.

The fundraising strengthened liquidity, although it also increased the share count. Since the year-end, a further 2,100,000 stock options have been exercised, bringing US$567,500 into the company.

Why did Eco Atlantic's loss increase?

Eco's net loss widened from US$2.3 million to US$7.5 million.

Several items contributed to this movement. The accounts included a US$1.5 million impairment of the Sharon licence, compensation costs of US$1.6 million and professional fees of just over US$1 million.

The company also recorded a US$5 million fair-value change in its warrant liability. This is an accounting adjustment linked to the valuation of outstanding warrants rather than an equivalent cash payment during the year.

Partly offsetting these costs were US$2 million of income from granting Navitas its portfolio options and a US$4.4 million reversal of impairment on Eco's investment in an associate.

Operating cash outflow improved to US$3.7 million from US$5.5 million. For an exploration company without producing assets, cash consumption remains one of the figures investors should watch most closely.

Total liabilities rose sharply to US$12.9 million, primarily because the balance sheet included a US$10.8 million warrant liability. Meanwhile, total equity fell to US$17.8 million despite the fundraising.

BP deal could reduce Namibia funding pressure

After the reporting period, Eco agreed to farm down a 60% participating interest in offshore Namibia licences PEL97, PEL99 and PEL100 to BP.

A farm-down involves transferring part of a licence interest to another company, often in exchange for cash and funding commitments.

If the transaction completes, Eco will retain a 25% interest and receive US$2.7 million in cash. BP will fund 100% of Eco's retained interest, alongside the relevant partner carries, during the current exploration phase.

The proposed work programme includes seismic reprocessing on PEL97 and a 3D seismic survey covering at least 3,000 square kilometres on PEL99 and PEL100.

If the partners proceed into the second renewal period in 2028 and commit to drilling, Eco could transfer another 10% interest in each licence to BP. In return, BP would fully carry Eco's remaining 15% interest, subject to a US$21 million net cap for each well on each licence.

Across all three licences, the maximum aggregate carry would be US$63 million.

This structure is potentially valuable because offshore exploration wells can require substantial capital. However, completion remains subject to Namibian government approval and acceptance by the TSX Venture Exchange.

Navitas partnership adds funding and execution potential

Navitas paid Eco US$2 million for exclusive options covering the Orinduik Block offshore Guyana and Block 1 CBK offshore South Africa.

The Orinduik option can be exercised within 12 months through a further US$2.5 million payment. Navitas would then acquire an 80% working interest and operatorship while carrying up to US$55 million of gross work expenditure.

That work could include an exploration well or appraisal of existing heavy-oil discoveries. Eco and Navitas are discussing a new licence with Guyana's Ministry of Natural Resources, with Eco expecting the process to complete in the third quarter of 2026.

In South Africa, Navitas exercised its option over Block 1 CBK in May 2026. It agreed to acquire a 37.5% working interest and operatorship, carry Eco's share of the exploration programme and pay Eco US$4 million.

Again, the cash payment and transfer are conditional on regulatory approvals.

At Block 3B/4B, Eco remains fully carried through the first two exploration wells. It is also due a further US$11.5 million from its joint venture partners once the final drilling permit is received and the first well is spudded.

The timing is uncertain because an appeal concerning the environmental approval process remains unresolved.

Falkland Islands transaction adds another moving part

Eco agreed in March 2026 to acquire the JHI Associates shares it did not already own. JHI shareholders approved the arrangement, and the Ontario Superior Court of Justice granted its final order in May.

JHI has an interest in the PL001 licence in the North Falkland Basin. Navitas previously signed a non-binding agreement to farm into PL001 for a 65% working interest.

Eco expects its acquisition of JHI to close soon, but the announcement does not disclose a confirmed completion date.

Dilution and execution risks remain

The stronger cash balance and partner-funded work programmes are clear positives. Eco is reducing the amount of capital it may need to commit while retaining interests across multiple offshore basins.

There are still important risks:

• The BP and Block 1 CBK transactions require regulatory approvals.
• A new Guyana licence has not yet been secured.
• Block 3B/4B drilling depends on the environmental appeals process.
• Exploration may not result in commercially recoverable oil or gas.
• Warrants, options and restricted share units could dilute existing shareholders.

In April 2026, Eco awarded restricted share units that will vest after one year and convert into 6,537,500 shares. This comes alongside the shares and warrants issued in January and the post-year-end option exercises.

Fewer scheduled financial reports ahead

Eco has elected to move from quarterly to semi-annual financial reporting under a Canadian regulatory exemption. It therefore does not expect to publish interim accounts for the three months ending 30 June 2026.

The company will continue publishing audited annual accounts, unaudited six-month reports and timely announcements covering material developments.

This means investors should expect fewer routine financial updates, although Eco must still disclose significant events as they occur.

Approvals and deal completions now take centre stage

Eco Atlantic exits the year with more cash, no debt and several potentially valuable carry arrangements. That is a stronger position from which to pursue high-cost offshore exploration.

However, much of the anticipated cash and operational progress is conditional rather than completed. The next phase will depend on converting agreements into approved transactions, securing the new Orinduik licence and moving Block 3B/4B towards drilling.

The balance sheet provides a useful cushion, but regulatory delivery and capital discipline remain crucial for shareholders.