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Not quite record highs for oil ;) but perhaps next year.
Market is waiting to hear plans for dev of their new prospects and assets in Santa Cruz Sur. Campo Limite and the rest.
Can’t be long with current cash gen. ‘21 has been a recovery year.
Key takeaways for investors:
1) Direction of travel, vis a vis operational progress & developments
2) Broader market context
Both +ve
I’m fed up with all this BS about Parsons. If you don’t trust him push-off ASAP. I would!
Well it’s all about balancing risk vs reward, & think I’m correct the business is now targeting around 40 active, liquid wells which de-risks future operations even further and provides stable, solid cashflow to fund higher risk / higher reward projects.
…and while attention will soon (inevitably) be back on CL, you can’t refer to it in isolation as MA is part of the Springhill gas play in Palermo Aike ;)
Not been an easy year, 2021, by any means - but reckon as do others, that the tide of fortune has decisively turned here.
Key takeaway this week…The work-over programme the team have in mind has great potential.
Little point guessing at this stage but I would imagine Martin has his eye on consistently achieving >1k bopd liquid production by interims next year. With 35 wells eventually online that’s no stretch.
Alongside gas sales at premium contract rates and ongoing sales of addn new production at elevated spot rates, two preconditions are now met - and in an O&G mkt that shows no sign of softening anytime soon.
The initial Chorillos de-risks the entire w/o programme (their hunch was right) and that alongside current reopenings and steadily improving cashflows probably provides the final boost they needed to now set out intentions (with their partners) for the Campo Limite test.
It’s been a long wait, no thanks to Covid jack-knifing markets, but we’re coming back nicely now, a much leaner, fitter and more commercially disciplined business.
Massive kudos to Martin for what he’s achieved. Huge year ahead for ECHO.
No great surprise this update.
But I sense the turnaround of this company is now largely complete.
All about picking off the low hanging fruit, keeping a tight rein on costs, and cementing that virtuous circle, of cash into operational enhancements the deliver rapid payback.
Year end results should see the SP comfortably back to preCovid levels. Many will now be holding for that next trading update, and for good reason. That means all we need are a few buyers returning and…wallop!
Expect some big moves in the coming months.
Re-rate
The naysayers have had their cake for too long but the boot is now firmly on the other foot!
A) Risk is down
B) Cashflow is up
C) Oil price is way up
D) Gas price is way up
E) …further production increases in progress
MH is chasing a low risk/high return strategy exactly as he said he would. I’m buying that.
8p target is not a stretch if CL/MA Hub becomes a reality. IMHO Palermo Aike holds far more promise than pie in sky TA. It’s a classic springhill play, in this basin about as low risk as it gets. DYOR
Util, you have far too much to say. You are not the oracle.
The fact that you complain so much (and seemingly exclusively about SOU and ECHO) says a lot about you and your ‘interest’ in this Co.
“…in the basement”? LMAO - A yawning gap with OG prices now. Gas is going insane!
Games being played out? Wouldn’t be surprised. May see a 15-25pc drop - clear out and then 40-60pc rise within a few days - keeping powder dry - nibble, nibble.
Fair value? Not sure mr mkt has this one right.
100pc emc and ducks must now be in a row with energy costs skyrocketing (globally) - as a low cost producer it's a golden backdrop. 1st indication of production returning to 2k+ boepd after infrastructure upgrades should see that re-rate.
Doesn't matter how you cut it , energy costs generally are skyrocketing - as a low cost producer something of an encouraging backdrop for ECHO. The first clear indication of production returning to 2k+ boepd after essential infrastructure fieldwork will see a sharp re-rate IMO.
"I`m not sure if y7our thick or just refuse to accept the truth. Ok i was wrong..."
LMAO
And the significance of SOU's daily SP movements is...? Still, you're adding a lot of value with your masterful understanding of Begg, Dornbusch & Fischer. The board appreciates those S&D 101 insights I'm sure.
Not with you there Util,
ECHO's contracts were put out for commercial auction last year - at the time 3Q-4Q20 a pretty sharp move, which provided premium rates against spot (emph, at the time) - difficult to call where local contracted prices will be this next year, but contracts are are an 'option' - are term based and fwd looking, which will take into account southern hemisphere winter 2022 ;o)
2022 contracts may or may not see 50-75-100% premiums on this last year's auction/contract rates but I for one wouldn't bet on let alone expect to see any fall either, or Argentina finding itself miraculously immune from the ongoing global gas (energy) crisis - though that would be a +ve for the local economy were it true.
I think we can trust MH knows the importance of getting the highest price for whatever comes out of the ground and would think the option for incremental production to be given exposure to premium price Intl markets now an attractive CTM. He's a smart guy.