(Alliance News) - Echo Energy PLC said on Tuesday its cash balances have "significantly weakened" amid fall in Argentine production and high inflation.
The London-based Latin America-focused energy company said its production for the first quarter of 2023 in its Santa Cruz assets, onshore Argentina, was 113,270 barrels of oil equivalent.
This includes an average net gas production of 6.3 million standard cubic feet per day, which fell from 2022's final quarter figure of 7.3 MMscf/d. Echo Energy said this drop resulted from maintenance in its facilities in the first three months of 2023.
Echo Energy added that its first quarter net liquids production averaged 213 barrels of oil per day, reflecting a 29% decrease from last year's final quarter. The company said this was due to an overstock of fuel oil in the Argentinian market in February and March, which resulted in its Santa Cruz Sur partners taking the decision to temporarily shut several oil wells at Campo Molino.
Echo Energy said recent reductions in liquid sales volumes during the first quarter of 2023, as well as high levels of inflation in Argentina, have "significantly weakened" the group's cash balances.
As at April 17, Echo Energy's UK cash balances are less than GBP100,000, the company said.
Echo Energy expects a revenue receipt of ARS135 million, around GBP500,000, in Argentina by the end of April.
Looking ahead, the company said it continues to explore means of monetising current liquid stocks in Argentina, and has received a proposal from an undisclosed Argentine investor to "inject cash and an asset into the business." Echo Energy is considering this proposal and continues to explore financing options to provide the company with additional capital working resources to provide near term funding.
Echo Energy shares were down 40% to 0.0041 pence each in London on Tuesday morning.
By Sabrina Penty; Alliance News reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2023 Alliance News Ltd. All Rights Reserved.
Echo Energy (ECHO)