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It's often mentioned in posts about the 'kicking the can down the road', and Echo need to repay the bond in 2025. With a vastly improved commercial/financial position, and if Echo does add a 'green' string to their bow, there's no reason why Echo couldn't pay a bit of the bond off, restucture the rest on improved terms (potentially with a different lender) and a longer time horizon to repay. Many O&G firms carry debt afterall. The key is being demonstrate to the market that it can be repaid without putting the balance sheet under pressure. Of course, that's all dependent on Echo seeing improved success with the wells; workovers and CL/MA of course and getting a good price for oil/gas produced.
Well of course that's a private matter ranger104uk, but as things stand, we're not having any sleepless nights. But I would say, that not all contributors to this board are sitting on a loss, or even a paper one at that, and that is true for us also. Anyhow, I'll check back in when we have the next RNS. Nothing more to add at the current time.
I can see why you would say that Ranger104uk but we voted against the equivalent AGM resolution because we didnt like the non qualified use of newly issued shares. The current position and what's been put forward is acceptable to our family and it has certainly not impacted our personal strategy with Echo. The price may fall from where it is (it could just as easily jump into the high 1p/2p range as a result of the added certainty passing these resolutions provides), but we believe there to be significant upside potential with Echo and frankly I don't think the company has ever been in a stronger financial position than where it is currently. That's why we're still accumulating during the dips.
I can substantiate everything nyforver has set out in his post earlier this afternoon. I had a very good conversation with Martin last week and we covered all these points in our meeting. I will be voting in favour of the resolutions as imho, not doing so will undoubtedly constrain Echo's ability to execute on strategic objectives if/when opportunities present themselves. I don't think it's great for shareholders to have a Board that's essentially operating with one hand tied behind their backs and new share issuance is an important tool to have in Echo's armoury, but it can't be one that's used too freely and easily, and this has been one of my main criticisms of Echo historically. I've shared with Echo my concerns with dilution too, but I do like the idea of a minimum dilution price though. I also 'hope' to see a set of interims which show a net operating profit and solid H1 performance with hopefully revenues more than enough to meet opex and running costs.
Echo have a great opportunity here and we (as in my family office) are certainly going to wait to see what the Interims show as surely with the improved Gas/Oil economics, Echo shouldn't be far off being able to report a gross operating profit after cost of sales.
After the years of mismanagement by the previous crew, Echo appear to be in a strong position both operationally and commercially. I was (and still am) very pleased that Martin has taken the CEO reigns of Echo as we need a CEO that is financially disciplined and ensures financial discipline and prudence runs through all strands of the company. There has after all, been far too much wasted money in previous years. Martin is proving himself in this regard and I greatly respect that.
But we need to see Echo embark on a really thought through and sustainable PR drive. They have a great story to sell, but they’re not doing it at the moment and we can all speculate as to the reasons why and what the real constraints are. But by any measure, the market cap for Echo is simply ridiculously low, but that has been driven by low trading volumes, so it’s no surprise.
We’ve seen before and recently, what happens when momentum shifts, and I hope we’re on the cusp of something very different here and when even the hint of a monk’s fart of buying pressure returns, we’ll start to see things move and quickly. That’s why we (as in our family office) are still holders, maybe a touch less strong as we once were, but still firm believers and we are actually still accumulating as we believe Echo will have their day and the current share price presents (in our view) an opportunity.
But Echo need to prepare and work hard to realise their day. It must be underpinned by steady & strong organic growth, no hype, but sell their vision to the market and get the market to sit up and take notice, get some analyst coverage, when they've had those meetings, get some more analyst coverage and fire Vigo Communications if they’re not up for the job for the advisory services they provide.
It’s a shame the Lombard Odier short happened when it did as they killed off the momentum with this stock when things were getting interesting again. It will come again though (I believe anyway). The financial noose has been removed, some would say kicked down the road for 4 years, but 4 years is a lot of time, and if Martin is true to his belief and strategy, then the debt should be much easier to service and repay in 4 years time.
My advice to Martin and the Board, would be to listen to what their existing investors want to see, how past failings have hurt through debt burden/unnecessary dilution, what to do to get and keep existing and loyal shareholders on board, anticipate what their future investors expect, and if necessary replace existing PR advisory with a market leading PR firm and one that has already earned their stripes and central London location!
I'm forever hopeful that Echo starts to engage proactively with shareholders, but sadly there may come a point where my/our patience runs out with this. I'm in waiting and listening mode though.
I don't count RNSs as PR, they are after all obligatory. I don't count Q&A sessions with investors as PR, as all Echo has done is regurgitate what they've reported through RNS. I certainly don't treat old presentations which could be relatively quickly updated as effective PR, especially when they're 18 mths old, and they advised Q4 '20 that a new update was being worked on.
But what I would say, is that Echo are doing a marvelous job in preparing for their Rotten Tomatoes Award submission for ineffective PR.
It's baffling that Interoil with a relatively small 8.34% of the SCS assets, are looking to take over as operator from Selva Maria Oil and Gas S.A. Why, for such a small percentage? Could they be looking to take a greater share going forward?
Thanks, no I wasn't. I guess lse must have judged it not complying with their rules for some reason. Either that or Echo are monitoring the board (which I hope they are having given them a direct link!), and are trying to control information flow. The ball's firmly in their court so let's hope we see a marked improvement on PR efforts and that long awaited update.
Thanks for all your comments and input folks. Looks like we're around the 100m shares mark. That didnt take long. So we're pretty close to the 10% threshold to call an EGM if needed (so long as 10% applies). I've forwarded my email to MH directly using the email address posted earlier, so will see what transpires from that. And then we can work through next steps & questions we feel need to be addressed.
I'll post what (if anything) I receive back. It truly is a sad state of affairs, frustrating & disappointing at the same time, that what the company has managed to achieve themselves (note not as operator of the assets) over the last 18 months can be summarised and written on the back of a fag packet!
Sent the following message to the company ...
Dear management/Martin,
I contacted management last October enquiring about when the next Investor Presentation would be published. I was informed that "We are indeed working on a substantial update to the investor presentation. There have been significant changes and adjustments over the last six months which need to be incorporated, so it is taking a little longer than expected."
Some 9 months down the line (you really are stretching the definition of "so it is taking a little longer than expected!"), we still have no updated Investor Presentation and there remains erroneous and misleading statements on Echo's website that Tapi Aike is still an asset. Now I appreciate you've scaled back staffing during Covid-19, but if you need someone with Powerpoint skills, I'm happy to volunteer my software skill-set to you.
https://www.echoenergyplc.com/our-portfolio/argentina/santa-cruz-sur/.
The website on the whole is incredibly light in detail, doesn't contain any meat at all on what the company's assets are, is seriously lagging behind what other local producers are doing and their approach to investor engagement; setting & achieving targets during Covid-19. Can we get a clear statement from the company please on why after 18 months, it appears impossible for the company to progress testing on CLix-1001 when other local producers (e.g President Energy) have been able to make progress on testing & development of wells? What is the company seeking to achieve over the short, medium, long term horizon. How is the company intending to engage more effectively with current and new investors? To be blunt and frank, the company must do better.
As a private shareholder myself and a representative of a private/family office with in excess of 62m shares in Echo, I remain both puzzled and astonished that Echo are unable to manage shareholders effectively in this regard. There is zero PR with this company and it's a total embarrassment. Is this a priority for the company and Board? Is it time for me/our family office to dump our holding?
I await your reply.
Maybe we should set up a crowdfunder and direct the funds to Interoil so they could mount a takeover for the 70% Echo holds. They seem to be doing a better job of communicating with Echo's shareholders, than Echo are.
Maybe we should set up a crowdfunder and direct the funds to Interoil so they could mount a takeover for the 70% Echo holds. They seem to be doing a better job of communicating with Echo's shareholders, than Echo are.
It would be nice to get an update (and thereafter regular updates) from Echo on how many of the workovers have been completed to date and therefore 'ready to connect'. As the joint venture own the workover rig that's been used for workovers to date, and as (surely) the operational expertise to workover older wells already exists with the operator/current operational team (and isn't impacted by border closures in Argentina), then with 18 months down the track, surely a significant number of the 16 initial priority workover targets will have been completed by now. Or is that being too hopeful? It would be a great position to be in if Echo announce immediate plug-in to the new pipeline infrastructure (whether it's to deal with water injection/increased oil flow or a mixture of both) when the pipeline works are complete. Plus where's the new investor presentation and why does the website still refer to Tapi Aike front and centre (nearly 6 weeks after the last TWtT when Echo said they would be updating the website). I remain a strong buyer on this stock.