Echo Energy PLC Operational and Commercial Update - Q1 2021 (8079V)
19 Abril 2021 - 1:00AM
UK Regulatory
TIDMECHO
RNS Number : 8079V
Echo Energy PLC
19 April 2021
19 April 2021
Echo Energy plc
("Echo" or the "Company")
Operational and Commercial Update - Q1 2021
Echo Energy, the Latin American focused upstream oil and gas
company, is pleased to provide an operational and commercial update
regarding its Santa Cruz Sur assets, onshore Argentina, for the
quarterly period ended 31 March 2021.
Operational Update
Daily operations in the field at Santa Cruz Sur continue with
the delivery of produced gas to customers as expected and without
interruption. Production over the period from 1 January 2021 to 31
March 2021 reached an aggregate of 152,673 boe net to Echo, which
included 17,814 bbls of oil and condensate and 809 mmscf of
gas.
As a result of a series of optimisation activities being
implemented in the field around the current production, average net
daily liquids production in March 2021 increased to 230 bbls/d, a
24% increase over production in February 2021.
The Company is pleased to confirm that the materials required
for the infrastructure upgrades of 23 km of pipeline, announced on
24 February 2021, are now being fabricated by the supplier in
Buenos Aires following contract execution and the installation
schedule remains in line with that announcement.
Commercial Update
Domestic energy demand in Argentina has continued to improve
through 2021 to date and the Company has recently sold a
significant domestic cargo of 8,812 bbls of oil net to Echo, at the
Punta Loyola terminal, with a price linked to the Brent benchmark
subject to typical local discount. Following this sale, net oil
stock at the Punta Loyola terminal (excluding inventory in field
tanks) is currently 4,237 bbls.
Following the Company's announcement of 24 March 2021, relating
to new gas sales contracts for 2021-2022, the Company has now
agreed summer and winter pricing for its annual industrial clients,
with the contracted winter premium providing substantially
increased cashflow in the near term for future operations and
production enhancement work programmes. For the committed
production over the key southern winter period (May to September),
the Company will sell natural gas at an average price of $3.52 per
mmbtu, which compares to $1.35 per mmbtu for industrial clients the
previous year.
Martin Hull, Chief Executive Officer of Echo Energy,
commented:
"Advancing into 2021, Echo has been set on optimising its
existing production portfolio and low-risk development upside
across the Santa Cruz Sur asset base. The benefits of these earlier
efforts are now being seen. Additionally, I am pleased to report
that Echo continues to benefit from increasingly strong local
energy demand and pricing, which has led us to obtaining premium
seasonal pricing to current prevailing spot market prices, and more
than double the price of the previous winter period. Against this
improving domestic energy price backdrop, we have also executed a
significant domestic oil cargo sale which marks an important
milestone linked to the improved economic outlook.
Furthermore, we are pleased with the progress we are making on
our production optimisation activities across Santa Cruz Sur.
Liquids production has recently increased in advance of the
upgrades to the 23 km pipeline infrastructure which are progressing
at pace. These upgrades will not only unlock previously shut-in
liquids production but will also provide additional capacity with
which to open up future incremental enhancement projects that have
already been identified."
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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END
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