Echo Energy PLC Q1 2023 Production, Commercial & Corporate Update (5076W)
18 Abril 2023 - 1:00AM
UK Regulatory
TIDMECHO
RNS Number : 5076W
Echo Energy PLC
18 April 2023
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.
18 April 2023
Echo Energy plc
("Echo" or the "Company")
Q1 2023 Production, Commercial and Corporate Update
Echo Energy, the Latin American focused energy company, provides
a production update regarding its Santa Cruz Sur assets, onshore
Argentina, for Q1 2023 whilst also providing a commercial and
corporate update.
Production Update
Production over the period from 1 January 2023 to 31 March 2023
was an aggregate of 113,270 boe net to Echo, including 19,205 bbls
of oil and condensate and 564 MMscf of gas.
Net gas production averaged 6.3 MMscf/d during Q1 2023, which
was down on Q4 2022 levels (Q4 2022: 7.3 MMscf/d) as a result of
facilities maintenance, to allow for increased future facilities
uptime, which was carried out across several assets (Oceano, Cerro
Note & Campo Bremen) during Q1 2023 and before the onset of
winter in the southern hemisphere.
Net liquids production in Q1 2023 averaged 213 bopd, a reduction
of c.29% on the Q4 2022 average of 298 bopd, as a result of an
overstock of fuel oil within the Argentinian domestic market during
February and March. As a result, and with a number of customers
either reducing or suspending liquid offtake from the Joint
Venture, the Santa Cruz Sur partners took the commercial decision
to temporarily shut in several oil wells at Campo Molino. This had
the impact of reducing aggregate liquids sales volumes by around
72% in Q1 2023 (Q1 2023: 7,803 boe) when compared to Q4 2022. The
domestic market situation now appears to be improving with a number
of sales from Santa Cruz Sur having already taken place during
April.
The Company also notes that Argentina's National Secretary of
Energy has extended its Gas Plan regime to the Santa Cruz basin
(Gas Plan 5.2). The Gas Plan enables companies to tender for
long-term contracts lasting until December 2028. The Company's
local subsidiaries are on the authorised list of potential
participants, and the closing date for submission of tenders is 30
April 2023.
Commercial and Corporate Update
The Company announced on 2 February 2023 that the Company's
unaudited cash balance as at 2 January 2023 was US$1.1 million,
with total creditors of approximately US$19.5 million reported in
the Company's unaudited Interim Results announced on 30 September
2022. A significant proportion of these creditors continue to be
related to the Company's interest in its joint venture in
Argentina, where the impacts of the COVID pandemic have hit hard
and ongoing costs remain subject to domestic inflation, currently
running at c.100% per annum.
Notwithstanding the recent improvement in the local domestic
market, recent reductions in liquid sales volumes during Q1 2023
and high levels of domestic inflation in Argentina have
significantly weakened both group and, as a result of prohibitive
foreign exchange costs, UK cash balances. As at 17 April 2023, the
Company's UK cash balances are less than GBP0.1m albeit the Company
expects a revenue receipt net to Echo of approximately ARS$ 135
million (c.GBP0.5m) in Argentina on or around the end of April.
Whilst the Company continues to explore means of monetising
current liquid stocks and future liquid sales in Argentina, the
Company has also received a proposal from a significant Argentine
investor which has the potential to inject cash and an asset into
the business. The Company is considering this proposal, albeit
cautions that it is very early stage in its nature and until
definitive documents are signed there can be no certainty of any
proposal concluding.
In the meantime, and whilst the Company has received feedback
that due to its large creditor position and Argentine
macro-economic factors the raising of additional equity without a
transformational transaction would likely be challenging, the Board
continues to explore financing options to provide Echo with
additional working capital resources to provide near term
funding.
Further announcements will be made, as appropriate, in due
course.
For further information, please contact:
Echo Energy via Vigo Consulting
Martin Hull, Chief Executive Officer
Vigo Consulting (IR & PR Advisor)
Patrick d'Ancona
Finlay Thomson +44 (0) 20 7390 0230
Cenkos Securities (Nominated Adviser)
Ben Jeynes
Adrian Hadden +44 (0) 20 7397 8900
Zeus (Corporate Broker) +44 (0) 20 3829 5000
Simon Johnson (Corporate Broking)
bopd means barrels of oil per day; boepd means barrels of oil
equivalent per day; bbl means barrel; MMscf means million standard
cubic feet of natural gas; and MMscf/d means million standard cubic
feet of natural gas per day. The information contained in this
announcement has been reviewed by Echo Energy's Vice President,
Exploration, Dr. Julian Bessa Msc, DPhil, MBA a Fellow of the
Geological Society and a Member of the Petroleum Exploration
Society of Great Britain.
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END
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