ECHO.L Share News (ECHO)

LONDON (Alliance News) - Oil and gas firm Echo Energy PLC on Monday said it encountered difficulties isolating gas zones during recent testing of its ELM-1004 well.

During the work on its Fraccion C asset in Argentina, Echo said the well operator found it "challenging" to fully isolate all gas bearing zones from a deeper, "highly" productive water-bearing zone.

This was probably due to the breakdown of cement behind the production casing, it said, due to an acid simulation.

Nevertheless, after isolating an eight metre interval Echo said the operator was able to draw gas to the surface, and the company is now looking at options for boosting deliverability, as productivity is not currently generating sufficient production.

Chief Executive Fiona MacAulay said: "Establishing dry gas production to surface in this initial phase of testing on the ELM-1004 well is significant and encouraging for the Estancia La Maggie accumulation.

"Having now isolated the upper zone of the well, a further rig-less stimulation can now be planned and completed without the testing rig on site and the rig will therefore shortly be moving to Fraccion D to commence testing operations on the CSo-2001(d) well."

Shares were 13% lower on Monday, trading at a price of 14.66 pence each.