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The plan is to use cash generated from the asset to complete the workover and add value. This was mentioned on the QA.
"Once the oil markets return to normal and we reverse the shut ins we will again be generating substantial revenue with a very reduced cost base. The successful debt restructuring also adds to this positive picture. Our goal is to use the positive cash generation to get after the upside projects we have been maturing, which we are very excited about."
Again using cash generating from assets makes a lot ps sense per Martin
"The important cost reduction decisions that we made have in recent weeks, have markedly improved our cashflow position. As has the successful debt restructuring. these steps combined with the improving gas pricing environment (VAT registration, contract improvements and winter pricing) provide a positive context. The economics of the workover program are very clear and whilst it makes sense to pursue these as quickly as possible we will make a commercial decision as to how best to fund, including the impact on timing etc. We are in the enviable position whereby with substantial revenue generation we can make the best commercial decision as how to generate shareholder value. Naturally using existing cash generated by the assets makes lots of sense"
QA session Martin's reply conforms.
"Given the well drill has been completed the testing now is a relatively small cost from this point on. Additionally, given our deal with the vendor when we bought the asset, they are practically covering the costs of the well testing. Funding for the test is not a concern. "
Not sure if people were expecting a cash balance of 10 million or something. We cut production, prices are low and we still have a positive cash balance. There is only an upside from here as the wells open and production trumps up and prices recover. Plus we have a vat retention pay. We have 3 more drills one test and multiple workover. We may need additional fund money at point point but we are a business and this is what businesses to do grow. Again for us long term holders who thought ECHO was going to go bust a few months ago this is music to our ears. Aimo
"In answer to (1) The western seismic data are being worked hard by the Tapi Aike partnership in order to fully understand volumes and chance of success for each prospect. Given the optionality in drilling locations it would be too early provide guidance on the location of the next well and CoS. The figures (volumes and CoS) from the CGC 2017 CPR remain valid as work continues on the new data.(2) With regard to Palermo Aike the range in prospective resource volumes for the Campo Limite area are 1.92 MMBoe (P90) 4.97 MMBoe (P50) and 14.12 MMboe (P10) Pmean value 7.00 MMboe. The testing of this well is a key priority for the Santa Cruz Partnership."
"The important cost reduction decisions that we made have in recent weeks, have markedly improved our cashflow position. As has the successful debt restructuring. these steps combined with the improving gas pricing environment (VAT registration, contract improvements and winter pricing) provide a positive context. The economics of the workover program are very clear and whilst it makes sense to pursue these as quickly as possible we will make a commercial decision as to how best to fund, including the impact on timing etc. We are in the enviable position whereby with substantial revenue generation we can make the best commercial decision as how to generate shareholder value. Naturally using existing cash generated by the assets makes lots of sense"
so far so good, "The initial portfolio of workovers have been focussed on e the Campo Bremen area (predominantly gas) & the Chorillos area. In Campo Bremen there is an intial gas opportunity that is a pulling job & hook up and the incremental initial production could be 2.0 MMscf/d. In the nearby Estancia das Lagunas block there is a hydraulic stimulation that has the potential to increase gas production by 1.3 MMscf/d. To the south in the Nortero Noreste there is a Springhill gas hydraulic stimulation that has the potential to increase gas production by 1.5 MMscf/d and a nearby oil opportunity which is a well recycling (bring that well back onstream) has the potential to add 84 bopd production. These are just from four initial opportunities from a larger 16 well portfolio that has been evaluated. The cost of these operations is low with a hydraulic stimulation being around US$ 420k gross and a puling job/well cycling being US$ 120,000 gross. The payback periods consequently is very quick from 2 months to five months for the initial four opportunities described here, with NPV (10) values from US$ 1mln to US$ 3.3 mln. This is based on a realised sales price of US$42/bbl and a gas price of US$3.5/mmbtu"