TIDMECHO

RNS Number : 2546T

Echo Energy PLC

24 March 2021

24 March 2021

Echo Energy plc

("Echo" or "the Company")

Argentina Commercial Update

New gas contracts for 2021-2022 significantly above 2020 annual pricing and current spot price

Echo Energy, the Latin American focused upstream oil and gas company, is pleased to provide a commercial update regarding the Company's gas sales from the producing Santa Cruz Sur assets, onshore Argentina.

The Company confirms that, following a successful auction process for industrial clients, it has secured two new gas sales contracts at significant premiums to both prevailing spot market rates and 2020 contracted rates (the "Contracts").

The Contracts have a term of 12 months, with gas sales beginning in May 2021, and provide for a 126% increase over annual industrial contract pricing previously achieved by the Company in May 2020 and a 39% premium above current local spot price.

The Contracts provide gross 6.5 MMscf/d of committed production, 4.6 MMscf/d net to Echo, at an average price of $2.64 per mmbtu, with the Company able to elect to sell additional volumes of up to 1.9 MMscf/d net to Echo under the Contracts. This optionality, at the election of the Santa Cruz Sur partners, provides flexibility to respond to market conditions including rising spot prices.

As a result of the Contracts, a minimum of approximately 70% of gross daily gas production from Santa Cruz Sur allocated to industrial customers will now be committed under secured contracts until April 2022.

Martin Hull, Chief Executive Officer of Echo Energy, commented:

" We have previously commented on the improving market conditions for our business as commodity prices increase, and the Company's ability to secure these new contracts with industrial customers via a competitive auction process reflects the increasingly supportive commercial environment. It is encouraging to now go further and see the improved market conditions translate to tangible improvements in future revenue. We believe that as a result of these agreements, our contracted gas USD revenues for the year could be as much as 50 per cent higher when compared to May 2020 to April 2021, meaning they will deliver a material improvement in cashflow during 2021. We continue to pursue an innovative and flexible commercial strategy, enabling Echo to secure this type of premium pricing. These contracts also confirm that the Company is viewed as a reliable and attractive supplier to the Argentine industrial sector, and can achieve strong pricing for our output."

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. MMscf/d means million standard cubic feet of gas per day; and Mmbtu means million British thermal units.

The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as amended by the Market Abuse (Amendment) (EU Exit) Regulations 2019/310 . Upon the publication of this announcement, this inside information is now considered to be in the public domain.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

MSCDKNBBKBKBQNB

(END) Dow Jones Newswires

March 24, 2021 03:00 ET (07:00 GMT)

Echo Energy (LSE:ECHO)
Historical Stock Chart
From Mar 2024 to Apr 2024 Click Here for more Echo Energy Charts.
Echo Energy (LSE:ECHO)
Historical Stock Chart
From Apr 2023 to Apr 2024 Click Here for more Echo Energy Charts.