Echo Energy PLC Operational Update - Q2 Update 2021 (4668C)
21 June 2021 - 4:00PM
UK Regulatory
TIDMECHO
RNS Number : 4668C
Echo Energy PLC
21 June 2021
21 June 2021
Echo Energy plc
("Echo" or the "Company")
Operational Update - Q2 Update 2021
Echo Energy, the Latin American focused upstream oil and gas
company, is pleased to provide an operational update regarding its
Santa Cruz Sur assets, onshore Argentina, for Q2 2021 until 14 June
2021.
Operational Update
The Company is pleased to confirm that following fabrication,
installation of the pipeline infrastructure required to bring back
online the liquids production previously shut in April 2020 is now
complete. The schedule has been delivered in line with the timeline
anticipated in the Company's announcement of 24(th) February
2021.
It is expected that the first tranche of production to be
brought back online will be from ten wells in the Campo Molino and
Chorillos oils fields. This work to bring the initial production
back online is expected to take around 15 days. When these wells
were last online, the combined gross production was approximately
138 bopd gross, 96 bopd net to Echo.
This first tranche of restored production will increase the
number of active producing oil wells at Santa Cruz Sur to 18.
Subsequent tranches of production when brought back online should
increase this active oil well stock to around 35. The programme of
work to bring online the subsequent tranches of wells will be
optimised both to maximise cost efficiencies and accelerate
production increases.
Increasing liquids production represents delivery upon the
Company's strategy to leverage the marked upswing in global
commodity prices. It is expected that the additional liquids
production will contribute to a material cashflow increase.
The Company is additionally pleased to confirm that since 1 May
2021 gas production has been sold under the previously announced
new gas sales agreements, with the significantly increased winter
pricing. Gas volumes not sold under long term contracts are sold to
the spot market.
In May 2021, the company sold a total of 18 MMscf to the spot
market at an average price of $US 5 per mmbtu representing a 151%
in prices compared to the March 2021 average spot price.
Daily operations in the field at Santa Cruz Sur continue with
the delivery of produced gas to customers as expected. Production
over the period from 1 January 2021 to 14 June 2021 reached an
aggregate of 278,600 boe net to Echo, which included 33,910 bbls of
oil and condensate and 1470 mmscf of gas.
Martin Hull, Chief Executive Officer of Echo Energy,
commented:
"As we have moved into mid 2021, Echo has continued to deliver
on its promises, with the pipeline infrastructure delivered to
schedule. We are now moving into a phase of increasing liquids
production enabling Echo to benefit from the upswing in global oil
prices and the improved macro-outlook as demonstrated by our
increased frequency of oil sales. Against this global backdrop,
domestic spot market gas prices have also risen markedly, and we
have been able to take advantage of this improving domestic
situation. With improved economic tailwinds and new infrastructure
installed in the field, we will have additional capacity to
commission incremental enhancement projects within the portfolio.
The increasing cashflows are expected to enable further production
investments to be funded from operations. These preparations to
take advantage of identified material organic growth options
demonstrate Echo's commitment to and confidence in its growth
strategy in the Santa Cruz Sur assets . Our clear focus remains on
creating value for our shareholders and we continue to progress
opportunities to do that across the portfolio connected by our
enhanced infrastructure."
For further information, please contact:
Echo Energy via Vigo Communications
Martin Hull, Chief Executive Officer
Vigo Communications (PR Advisor)
Patrick d'Ancona
Chris McMahon +44 (0) 20 7390 0230
Cenkos Securities (Nominated Adviser)
Ben Jeynes
Katy Birkin +44 (0) 20 7397 8900
Shore Capital (Corporate Broker)
Jerry Keen +44 (0) 20 7408 4090
Note
The assignment of Echo's 70% non-operated participation in the
Santa Cruz Sur licences is subject to the authorisation of the
Executive Branch of Santa Cruz's Province, which is part of the
overall process of title transfer that is proceeding as
anticipated. boe means barrels of oil equivalent; bbl/d means
barrels of oil per day; boepd means barrels of oil equivalent per
day; MMscf mean million standard cubic feet of gas; MMscf/d means
million standard cubic feet of gas per day.
Certain of the information contained within this announcement is
deemed by the Company to constitute inside information as
stipulated under The Market Abuse Regulation (EU 596/2014) pursuant
to the Market Abuse (Amendment) (EU Exit) Regulations 2018. Upon
the publication of this announcement via a Regulatory Information
Service ("RIS"), this inside information is now considered to be in
the public domain.
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