Echo Energy makes positive progress at Santa Cruz Sur

(Sharecast News) - Latin America-focussed upstream oil and gas company Echo Energy updated the market regarding its Santa Cruz Sur assets, onshore Argentina, for the third quarter on Tuesday.
The AIM-traded firm announced that, further to its announcement on 26 August, a further three wells from the Campo Molino oilfield have been brought online.

All of the recently-reactivated wells were producing in-line with expectations, the board said, with a maximum daily reported production achieved of around 350 barrels of oil per day net to Echo.

That represented a further 20% increase from the production levels announced on 26 August.

In the month of September, liquids production net to Echo averaged about 290 barrels of oil per day.

That continued to represent an almost 50% increase in the total daily liquid production rate at Santa Cruz Sur, when compared to the period immediately prior to the restoration of production from the Campo Molino field just over a month ago.

Production levels from the seven reactivated wells continued to indicate that the shut-in period had not resulted in a "detrimental impact" on reservoir behaviour in the Campo Molino oil field, with those wells now being managed to deliver the same average monthly rate as had been achieved prior to shut-in in April last year.

Liquids produced at Santa Cruz Sur can cater for a variety of blend types, as and when required from customers.

Given the opportunity presented by improving markets, and increases in realisable prices for higher-quality products, the company said it had optimised its commercial position by focussing production and sales on the highest-quality blends, the prices of which had increased more quickly than other blends.

As a result of the demand and increased realised prices of higher-quality blends, production from Santa Cruz Sur would, in the short-term, be managed to focus on production to deliver the "highest-quality and highest-priced" blend which could be delivered from existing producing wells.

"Our pursuit of value for shareholders continues as we look at ways of maximising the price of our sales," said chief executive officer Martin Hull.

"The work we have done in recent months has borne fruit and we are now seeing materially higher prices for our higher-quality blend.

"This, coupled with increased production levels from the reactivated wells at Campo Molino, means we are seeing stronger cash flows as we head towards the end of the year."

At 0910 BST, shares in Echo Energy were up 5.08% at 0.62p.