Member Info for The_Linns

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.

Hi folks, any particular thoughts on Marco. Worth his seat on the board or time to cut loose?

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.

And something else to ponder over. I did find it quite surprising that Echo went to the trouble of organising the TWTT on Wednesday, without anything new to report. No update to the Q1 2020 presentation (they know fine well it's being updated as I was informed as such in December). No update on the pipeline upgrade. Instead we got a pleasant regurgitation of news already announced by Echo and in the public domain. It's almost as if Echo may have been planning to tell us something 'new', something 'exciting' perhaps, but weren't able to for other reasons and needed to proceed none-the-less with the TWTT as scheduled. Maybe they got wind of Lombard Odier opening their short position, so decided it wouldn't be the best week for 'new & exciting' news. This has boombastic written all over it when the volumes return.

"45 days from conclusdion of successful procurement" as announced on 24th Feb.
"It is anticipated that once the pipelines are fully operational, gross daily liquids production will be restored to levels of between 480 bopd - 600 bopd (336 - 420 bopd net Echo)."

Now, knowing the discipline and "steely focus" that Martin has brought to Echo, we can safely assume that this news was only released when Echo and their Santa Cruz Sur partners had their ducks suitably lined up. After all, Echo for their part will have been working on this work in anticipation of a successful restructuring of the Notes, concurrently, not consecutively! So we're now at DAY 45 since the announcement.

Thanks to Lombard Odier, I've topped up handsomely in recent days. Echo is so grossly undervalued imo.

Couldn't agree with you more there Bobby. Once the news streams are unlocked, things will heat up massively and the share price growth of the last few days will be drops in the ocean in comparison.

Taking note of the Gas/Oil production/revenues for H1 as announced in the interim report for H1 2020, you can extrapolate that full 2020 figures when accounting for the c45% better pricing, to deliver cUS$13.8m for the full year. Going forward, if the revenue achieved from a stabalised production at Monte Aymond delivers an average rate of 5 MMscf/d when brought into production, that's 50% of Echo's existing daily gas production to add into the mix. And if CLix-1001 & the additional 16 workovers gives (at least) another 50% uplift to rates of current daily production, then these initiatives alone would propel Echo's daily gas production and put annualised revenues (purely based on current pricing and not higher LPG pricing) in the range of cUS$23m for a full year when everything here comes on stream. Similar production rates compared to the likes of President Energy which carries a market cap US$30M. President don't carry as much debt as they did, but they've been paying that off through their 'organic growth strategy'. So, it just goes to show where Echo could be in the not too distant future and how the share price could in my opinion increase 10-fold from where we are (still only 4p per share). Interesting also to reflect on the 23,000,000 Options granted to Martin in Dec 2019 and the 15p 'value cap' which was set at a 5.75 x the option price 2.6p. Gives us a good insight into where the company is setting their growth targets for the medium term.
Once the news starts flowing, I can only see this going one way, but that's just my opinion.

Nice work Abzzba. Hopefully not long now until we know. I would seriously love it if Martin annouces a series of catalysts over the next few weeks and months to start getting the valuation of Echo on the upwards trajectory. The long-term investors here have sufferred far too long. The pandemic can be a convenient excuse for the lack of news, but there's been plenty of desk time for Echo management to work behind the scenes on the next stage of Echo's development. So it's time they got their collective fingers out, and start getting this company noticed for what it has and where it can go.

While frustrated too around the lack of (thus far) much communicated progress over the past few months, I do trust Martin and very much look forward to the hotly anticipated updated presentation and interims at the end of the month. This should shed some light on exactly what progress has been made over the past few months.

Picking out a few observations ...

We have Martin commenting on 9th Sept that “we are now entering an important period of growth for Echo”.
One of the purchased compressors is sitting on the Cerre Norte field, adjacent to Palermo Aike.
Martin has expressed his excitement earlier in the year regarding CLix-1001 and noting the primary target was shallower than expected meaning there's possibly more in the reservoir than previously estimated and perhaps the Springhill formation across the wider acerage.

These points together with the fact that the local Covid-19 lockdown in Argentina has nicely delayed (depending on how you look at it) Echo’s ability to prove-up by getting the right technical expertise into country, and have independently verifiable increases to proven 1P reserves (which would ultimately trigger the deferred $1.5m of the transaction price that’s been deferred). Extract from the 2019 report - Santa Cruz Sur Licences - "Purchase of the assets was finalised on 11 November 2019 for a non-contingent fee of US $8.5 million and a contingent cash consideration of US $1.5 million if as of 1 October 2020 there is an increase in the proven reserves attributable to the Santa Cruz Sur assets."

Conjecture on my part, but could this mean that if there's no increase in proven reserves by 1 October 2020, the $1.5m deferred part of the acquisition price no longer falls due for payment. That would be a nice Covid-19 bonus to Echo - and possibly a very shrewd piece of work by Martin (he does know his numbers after all).

Abzzba, agree with you. The directors have a responsibility for making shareholders aware that they may need to raise funds in the future as part of their 'going concern' statements. But the source of the funding could just as easily be an extension to the short-term loan facilities, as opposed to share dilution (or where economics can change in the spin of a coin where a discovery is made (immediate term positive news on Campo Limite would clearly change the dynamics). In addition to the things you mention, Echo have oil in storage and wells shut in that can be brought back on line pretty quickly. The other point is that fund raises through share dilution doesn't always equate to a price reduction. Sometimes the very fact a company has an injection of working capital can provide the opposite effect, especially where a company is considered to be undervalued in terms of fundmantals. I've seen this before where a capital raise through dilution results in the share price re-rating upwards, very quickly and quite considerably.

Hi, an interesting article from October 2019 which sets out the legal, regulatory and licensing framework covering exploration and production concessions in Argentina. https://thelawreviews.co.uk/edition/the-oil-and-gas-law-review-edition-7/1210067/argentina

I wonder how much the timing of announcing success of Campo Limite (CLix-1001) is tied to the point at which Echo would need to reimburse Petrolera El Trebol SA the up to $1.1m per the RNS of 02/12/19.

"As previously announced the costs of the Campo Limite well that correspond to Echo's interest will be paid for by Petrolera El Trebol SA, a subsidiary of Phoenix Global Resources plc, the previous owner of the interest. Echo will reimburse up to 60% of these costs at a later date in a mixture of cash and ordinary shares. Total reimbursement will not exceed a maximum amount of US$1.1 million."

Prudent financial management and cost control has been a key point of Echo's strategy of recent weeks, so if I was a betting man (which I am having been invested in this company since IRG dys), I would say it's a case that the Board know very well what's down the hole and are terribly excited by it, but they're drawing out the 'testing' so that this is formally concluded at a time that suits Echo, local economics and the speed at which they can get the gas to market. I think the lifting of the lock-down and the ability to get personnel/ 'testing' equipment on site, is more about the work that's needed to tie the well into the export pipeline. The fact that Echo reference this in the Q1 presentation gives us some insight into how much Echo are prioritasing this drill and 'tie-in' to their immediate/short-term plans.

Hopefully not too much longer to wait before we start to see Echo re-rating towards something which better resembles NPV value. This is long overdue. The company is in a much stornger position than it was 9 months ago yet the share price now is around a third of what it was then. So if we get back to 3p, then we can build from there.

Or exactly the point the 3 month lock-in ended, which if you look at the chart, is when we've seen the most downward pressure on the price. The other 50% of the purchase shares have an extended lock-in of another 3 months, so can we expect similar downward pressure on the share price at the end of May. Anyone with L2 access that can compare shares sold since end Feb with normal trading volume so that we can estimate how much of the overhang is left? Maybe L2 doesn't give this detail, but not sure where else to look for it. Any ideas?

Christ, or even £40,929, but you get gist. Time to have a lie down me thinks.

It's a fag packet calc, but 5,805,555 x 0.015 x 0.47 = £36,575.

I'm taking some comfort from the fact that the volumes of shares being traded each day (example today - so far reported on LSE; 1.65m sells vs 0.7m buys) - is very very low - equating to 0.003% of the shares in issue. As we know, when the buys outstrip the sells, the share price will go up and it won't take much to move this one. What we really need to see from Echo is a marketing plan to get some new investors on board and the next Q&A session presents a good opportunity to ask some pointed questions on this. Unfortunately due to a badly timed volunteering session at the local primary school for all my Thursday, I'll not be able to follow the next investor Q&A in real-time, but I would hope some questions posed to Martin touch on what Echo are doing to maket their asset potential to new and existing investors and in a way which encapsulates a number of key observations made on this board in recent days, on what we feel Echo could be doing differently/better etc - not just on the Tapi Aike western prospect areas where they may be more limited on what can be reported, but the timeline for progress on the Santa Cruz assets; estimated cash-flows (after costs), workovers, CLix-1001 and Santa Cruz Sur potential more generally etc.

You're right there. I've taken the opportunity to top-up over the last couple of days. The volume of shares being traded each day is very low compared to the shares in issue, so the 30%+ fall is overkill. Some good news on Campo Limite and a detailed update on the workover plan, should hopefully give a bounce in the positive direction.

Maybe Sound could get these folks involved. Edge LNG - seem to know what they're doing.
https://www.rigzone.com/news/marcellus_lng_project_to_monetize_stranded_gas-29-jan-2020-160930-article/