Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Currently, we are studying around five or six new potential workover targets. If we can generate anywhere above 20bbls/d of revitalised production from a workover well, then it will be well worth it, economically speaking. We have put together a plan so we can get the workover rig back in and launch a pretty rapid regeneration programme for several wells. We are hoping to deliver a slow and steady track of workover news.� Fraccion C Programme: The piece of the picture that is massively important is that in the success case any of these wells can be brought into production literally within a couple of months of completion. They are all close to infrastructure, and this is about getting incremental barrels into the facilities. The relative operational expenditure for additional gas, for example, is just 14 cents per MMBtu. So, the more we can get going through these facilities that are running at about 10pc of their capacity, the better.� �In our modelling assumptions, we assume that two out of the four exploration wells are successful, and if we do that, we think we are in line for a 4X growth of EBITDA throughout the year. What that tells you is that we are more than covering OPEX costs, and any new molecules produced have a high impact on EBITDA. Depending on success, we will then look at putting a contingent well into Fracci�n C at the end of the programme.� Tapi Fully completing the 3-D seismic at Tapi Aike will be a transformational piece of the picture for Echo. We have done some independent analyst economic modelling that goes along with our thoughts on the site�s potential and believe that it could generate a value net to Echo of about $500m. Just one discovery there could be incredibly valuable and lead us into a different sphere of valuation.� �The FX exchange risk in Argentina is kind of under control. The country�s government has to control the peso and ensure it comes down to an appropriate value to get funding from the IMF. There is no longer any short-term requirement to pay back bonds that had been due to expire imminently, and we have had a settling of the peso/dollar rate over the last few days. That gives us a good indication of where things lie. It is not ideal for the volatility to have occurred, but Argentina is an emerging market, and these things happen. I think the responses that the government have made and the speed at which they have made them show they are working effectively, as far as the outside world is concerned.� At the end of the day, I need to build a strong enough core NAV to ensure we have an appropriate valuation. We are doing that slowly but surely by transferring prospective resources into contingent resources and even reserves. We intend to build up a strong offering that is difficult to knock back. Once we get that intrinsic value, we will slowly bring the value up.�
You did mentioned if we didn�t hit all four wells then another place would be needed to fund TA but I think drilling cost if I remember rightly are 5mill or 7mill something like that, I think from what we know already from the exploration wells is there is a decent amount of Gas and Oil we are able to offload efficiently and at a good price, along with working costs being low we are in a better situation now than we have expected previously and would like to think 3/4 or 2/4 will still be a good results and give us a healthy revenue stream going forward. My main concern on the placing though was to do it right in the middle of what seemed to be a nice sentiment change and upwards momentum, but if it means nearly twice the amount of sq/k�m being shot for seismic at TA, quicker process and a saving of 7mill then great. More info would of been nice though and that�s obviously just my opinion.
Jobb - my comment was in response to Franko suggestion the success of these exploration drills are make or break my comment of the chat live chat the other day was regarding the placing price, the fact they have said they were fully funded this year and the lack of information and I was letting my thoughts known. I do know however have a slightly different opinion due to understanding a little more about why they did it in the first place, which would of been better knowing at the time of the RNS. Plus I am in here for the long run, sometimes short term decisions you can have a disgruntled opinion on and being a shareholder voice that opinion but sticking by the company and moving forward is necassary. I have also emailed Fiona since
Do you really think the placee�s would of participated in tasing the cash if there wasn�t necessary funds and revenue coming in for the foreseeable? They would of done extensive due deligience and have a lot better understanding of the projected results/revenue/profit over the coming months. And don�t forget first results were better and expecting which bodes well for 4thwo, so to say if we don�t hit all 4 we are in trouble is not true.
Not long at all until news now, as long as it's positive which hoping it is we can stay around these silly prices! Surely? We have been lingering around here for what seems a very long time! Whilst it's been good to add more at these levels we have to start building from here and heading north
For what it is worth I think we will likely see a much bigger turn around here in a lot shorter time than we think. Once this project is done, we should hopefully be around levels of 20-25p (hopefully more) and then onto the next, along with a decent amount of revenue coming in and cash in the bank, there's nothing to say there won't be further announcements re assets elsewhere and work on numerous amount of wells but once we start over at Tapi it should start to get even more exciting and see price around 50p+. I think there could be a possibility that if SOU sorts itself out at some point in the future and agrees a sale whilst ECHO is continuing to become a mid-cap co then we might see further involvement from JP and who knows, could be takeover offers along the way or that could be the end game...
getting tested - still 3.5p off placing price! If we get back around placing price in the next few days, which is a more realistic SP and then we get next lot of news we could see new highs and into the mid-late 20's in 2-4 weeks