Echo Energy PLC Operational Update (1627Q)
February 24 2021 - 1:00AM
UK Regulatory
TIDMECHO
RNS Number : 1627Q
Echo Energy PLC
24 February 2021
24 February 2021
Echo Energy plc
("Echo" or the "Company")
Operational Update
Facilities upgrade to enable increased short and long-term
production
Echo Energy, the Latin American focused upstream oil and gas
company, is pleased to provide an update on operations at its Santa
Cruz Sur assets, onshore Argentina.
Investment in facilities to enable increased liquids
production
Following continued improvements in market conditions the
Company has agreed, together with the Santa Cruz Sur partners, to
capital expenditure to upgrade and debottleneck the existing
liquids pipelines in the Santa Cruz Sur assets to accelerate the
return to full oil production and to bring the remaining volumes
previously shut in in Q2 2020 back online. The pipeline upgrades
will also provide additional capacity for future production
enhancement projects that have been identified in the Company's
opportunity portfolio at Santa Cruz Sur.
Capital expenditure net to Echo's 70% working interest of around
US$ 275,000 will be injected by the Company to replace and upgrade
parts of the infrastructure primarily in the Chorillos, Campo
Molino and Cerro Convento fields with installation expected to take
approximately 45 days from conclusion of successful procurement.
Ten individual upgrade projects will be completed to enable the
upgrade of around 23 km of pipeline.
It is anticipated that once the pipelines are fully operational,
gross daily liquids production will be restored to levels of
between 480 bopd - 600 bopd (336 - 420 bopd net Echo). The actual
level of production resumed will be dependent on reservoir
behaviour and pressure build up since this element of production
was shut in in April 2020.
In light of current attractive market conditions this
infrastructure project is considered an attractive investment with
the ability to result in strong cashflow generation and a short
payback period of months.
Production Update
Daily operations in the field at Santa Cruz Sur continue with
the delivery of produced gas to customers as expected. Production
levels remained in line with the Company's expectations with
average daily production, net to Echo's 70% interest, from Santa
Cruz Sur throughout 2020 of 1,966 boepd (including 10.2 MMscf/d of
gas). Total cumulative production from Santa Cruz Sur during 2020
net to Echo was 720,000 boe (including 3,750 MMscf of gas) and 2021
production remains strong. Gross cumulative production from Santa
Cruz Sur for the period 1 January 2021 to 14 February 2021 was
116,040 boe (net 81,230 boe).
Increased frequency of Oil Sales
Given the indications of an improving macro-economic outlook
and, specifically, the increase in oil prices from the start of
2021, there has been an increased demand for Santa Cruz Sur oil,
resulting in improved pricing and, as a result, more frequent oil
sales. Oil sales to date in 2021 have totalled 17,600 bbls net to
Echo.
Martin Hull, Echo's Chief Executive Officer, commented:
"We are very pleased to be making continued progress across the
portfolio as market conditions continue to improve. The Company's
investment in improved and renewed infrastructure at Santa Cruz Sur
is both consistent with Echo's commitment to HSE in the field and
provides additional capacity for the opportunities the portfolio
holds to increase production and revenue. With stable production
and several growth opportunities to pursue, we feel positive about
the Company's prospects for 2021, especially having announced
earlier this week, pending noteholder approval, progress in the
restructuring of the Company's balance sheet. With a firmer
financial footing and material operational upside which we are
actively pursuing, I look forward to updating shareholders with
further good news in due course ."
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; 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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