Echo Energy PLC Operational Update (4001Y)
09 September 2020 - 4:00PM
UK Regulatory
TIDMECHO
RNS Number : 4001Y
Echo Energy PLC
09 September 2020
9 September 2020
Echo Energy plc
("Echo" or "the Company")
Operational Update
Echo Energy, the Latin American focused upstream oil and gas
company, is pleased to provide an update on operations at its Santa
Cruz Sur blocks onshore Argentina.
Infrastructure Investment
The Santa Cruz Sur Joint Venture has recently purchased four gas
compressors, which were previously leased on a monthly basis. Two
of these compressors are located on the Cerro Norte field, one on
Oceano and one on Campo Bremen.
The compressors are used to increase the pressure of the gas for
pipeline transportation from the fields. The purchase of these
compressors at a gross cost of US$2.2 million will be paid off over
thirty-six monthly instalments, with a three-month grace period
before the first payment is required.
This arrangement is expected to reduce gross monthly operating
expenditure by around US$100,000 when compared to the previous
lease arrangement, as well as providing security for future gas
production.
By securing ownership of this important infrastructure the Santa
Cruz Joint Venture is better able to facilitate anticipated future
increases in production levels resulting from planned production
enhancement activities.
Production Increases
As a result of improved market conditions, the Company has been
undertaking upfront work focused on increasing liquids production
at Santa Cruz Sur, in a phased approach, by bringing wells back
into production that had previously been shut in earlier this year
as a response to the oil price at that time.
The initial phase of these operations have focused on oil wells
that have historically shown a lower volume of produced water and
five oil wells have now been successfully brought back on stream.
This has increased average gross liquids daily production by 108
barrels of oil per day across the Santa Cruz Sur assets. Projected
forward into Q4 2020, this additional oil production from the
initial phase of reinstated wells is expected to generate gross
additional monthly operating revenue from liquids (oil and
condensate) of approximately US$120,000, assuming a Brent oil price
of US$45/bbl..
The wells which have now successfully been brought back online
are producing at an average rate approximately 13% higher than the
pre shut-in levels potentially due to pressure build up in the
reservoir during the period of shut-in. The Company continues to
closely monitor this development with a view to understanding
whether similar initial production increases can be achieved across
the remaining inventory of wells which had previously been shut in.
Net 2020 Santa Cruz Sur production (net to the Company) over the
period 1 January to 7 September was an aggregate of 511,416 barrels
of oil equivalent with an average production rate of 2,040 barrels
of oil equivalent per day.
Martin Hull, CEO of Echo Energy, commented:
"We are now moving into a period where we are both looking to
invest in infrastructure in anticipation of future growth, to add
value for shareholders wherever we can, such as through our
purchase of the compressors at Santa Cruz Sur, and also increase
output from certain wells to maximise returns from our assets. This
combination of investment and active management of the portfolio
demonstrates that we are now entering an important period of growth
for Echo, as we look to the future and deploy both time and
resource above and beneath the surface to build our business."
Enquiries:
Echo Energy via Vigo Communications
Martin Hull, Chief Executive Officer
Vigo Communications (PR Advisor) +44 (0) 20 7390 0230
Patrick d'Ancona
Chris McMahon
Cenkos Securities (Nominated Adviser) +44 (0) 20 7397 8900
Ben Jeynes
Katy Birkin
Shore Capital (Corporate Broker) +44 (0) 20 7408 4090
Jerry Keen
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END
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