Each new bbl of oil flowrate produced, is worth around £8.5K gross p.a. to Echo.
After a w/over, the initial flowrate can be misleading. After a month of production, you get a reasonable indication of what the new rate is. As time goes on, this will drop off with the perforations getting clogged up again. On a 4 well program, and and an optimistic average increase of 5bbls/day per well, the gross to Echo before tax might be in the region of £170k/p.a.
2. Oil and Gas sales numbers - are we now making a profit? The next Production RNS should answer that question.
3. Palermo Aike.
There are a number of possible scenarios here. Echo have indicated that the historic seismic was inaccurate. They must have found something, given they are awaiting specialised equipment from outwith the region. All "normal" kit would be available locally, CGC no doubt would be happy to help. Maybe Echo are imposing a news lockdown on this well, if that was the case - you really have to wonder!!
4. Being realistic, Bolivia and the Eastern Tapi Aike well, should be considered as write off's. No point in spending a penny more, on these failures.
5. News on the Tapi Aike Western Cube well program. 3 wells to be drilled. Mobilisation date and well location to be advised.
That is where I see Echo now. News might come in a different order, but the topics should be the same.
No surprises with this failure in Bolivia.
Ms MacAulay deserves the "brickbats" but we should not forget Dr Bessa, the "Doctor of Rocks" who aided and abetted her!!
He has, as yet NOT produced an economic discovery.
The location of the Palermo Aike well was included in the acquisition, so should not count.
And I expect CGC will have the major say in the Tapi Aike well program well locations.
Geologically speaking, our strike rate so far has not been stellar!!
A minor top up from me.
It might be seen as rude or even impolite, not to have done so! lol
Unless we are all being taken for a MacAulay(esque) ride on this Palermo Aike Well , I think that at long last Echo have , as the major stakeholder; actually found a hydrocarbon accumulation worthy of monetisation.
And, believe me - that is not ramping, like some on this board.
It is down to continual positivity from Echo, knowing that another failure after unremitting encouragement might see many long term holders running for the hills; clutching what little cash they have left from their original investment; with a very bitter taste in their mouths.
Now, very well into 7 figures, so if and when Echo issues RNS's of note, my investment will actually be worth more than pennies!!
To my mind, there is absolutely nothing from what Echo have released regarding Campo Limite to indicate that it was not highly promising. For anyone to disagree, let them quote negative comments from Echo.
Why would Echo say that they are awaiting specialised equipment from abroad to finish the testing program?
De-rampers have been the bane of this board as have the tub thumping, unrealistic investors who grab onto the smallest fact and build it up to Everest(ine) proportions.
Currently, I look at this board maybe once or twice a week, I rarely see comment from those with oilfield, or operational experience; and who can blame them?
How many would have been part of a well workover program let alone be aware of probable flowrate, post the intervention??!!
From here on in, listen to Martin and be patient.
Campo Limite and Tapi Aike, that's the ball game!!
Yes, of course; there are not enough movable storage tanks in all of Argentina to hold 7 days worth of production.
And they will need to import them from another country.
I would never have thought of that!
Thanks for solving that conundrum!!
They require non-standard testing equipment, in a country that has a thriving oil industry.
Does CGC not have access to it? Perhaps not?
Is there not an International service company, located in Argentina that has it?
Would asking a local company for something, let a cat out of a bag?
Is it for flowrate, material spec or analytical? It could be something else?
I am sure that there are those on this board who might hazard a guess??
This is fun!!
From the TWTT, I do wonder which bit of specific kit that required for the Palermo Aike testing? Martin did NOT elaborate!!
Well testing kit is fairly generic, one might presume that they require something specialised?? Size, material??
Answers on a postcard to.......! lol
And there lies the clue??
Given where we were a week ago, we have had a good 7 days, compared to where we might have been.
Speaking realistically, better to forget about Bolivia and the Eastern Tapi Aike well.
Potential in the Palermo Aike well, but according to the website that is unlikely to be cash generative for a year or so.
Still, if it delivers could add value to Echo.
Our focus should be on Western Tapi Aike.
I think that is why many of us got involved in Echo, not the hairbrained schemes of Ms MacAulay or Dr. Bessa!!!
And if you give it some thought, if there REALLY was little potential in Western Tapi Aike, do you think that we would have got these financial instruments in place without excellent prospects in the West.
We have not been privy to the recently shot, up to date 3D from the Western Cube.
But I do imagine that those who have, even in a general report scenario, might well have been enthused by what they saw.
Echo and CGC have had more than enough time to devise and plan the Western Tapi Aike drilling campaign.
It should run like a Swiss Watch, not the Sekonda we got last go around.
So let's just wait for the lambing season to finish, and the drilling (I imagine) may well commence in December.
Patience, that is all that is required.
Have a good weekend.
I did notice that the Argentinean Government has cancelled ALL ingoing or outgoing flights, both international & internal until 1st September.
So we cannot expect much progress on operations, given this prohibition!!
So hunker down, and hope that the gas operations are not interrupted by this government decree.
I saw Brent Crude collapse to $7/bbl in 1987, the cutbacks that ensued made North Sea Oil & Gas platforms resemble the "Marie Celeste," so draconian were they. Todays WTI of $13.15 is the modern equivalent. Mr Trump, the CEO of Exxon etc will be apoplectic with elections just over the horizon. Crude may be worth less than water today!!
It will come back, it must otherwise there will be a wholesale collapse of the economies of OPEC nations. Mr Putin will feel his sphincter tightening as the Coronavirus starts to ravage Mother Russia, and it's citizens begin to lose confidence in him.
These are strange times, and at Echo we must wait out what is in front of us!!
I imagine that Echo will be battening down the hatches for the short to medium term.
The imperative will be a successful outcome from the meeting on May 1st.
A prudent approach to cost-cutting is key, reducing expenditure where possible whilst remaining focused on being ready and able to resume production as and when the oil price allows. Brent fell from $65 to $28 over a 3 month period. For many producers, the current price is uneconomic; so no matter who or where they are -the price must go up. In the USA, with so many jobs in the oil/supporting sectors under threat, Mr Trump cannot afford to see so many well paying jobs consigned to the latrine. Even in a recession, there will be a push for stability; especially with only 7 months to the next election!!
On the exploration front, with Palermo Aike operations are suspended it is good to hear that the Eagle rig has been redeployed in order to bring other assets on stream. None of these piecemeal operations are about big numbers, but cumulatively they will increase our income; and in these troubled times that is really important. And we have the Winter gas sales income to look forward to.
With Eastern Tapi Aike not being successful, it will be off to the West later this year. I do not know about you, but it was that prospect that brought me to Echo. They have all of the enhanced 3D seismic, and they have had plenty of time to plan the campaign. The well locations, the permitary from the regional authorities, what drilling rig that will be employed, the well design, preparations for drilling into over pressured reservoirs and the respective procedures - yes, the entire 9 yards. This first well, should be the one that might really deliver; not point drilling anything less than the best prospect FIRST.
The pressure will be on, this is high risk, high reward Exploration, this is why we are here!!
It was NOT those first 4 failed wells that chewed up our cash!!
But for a while, we will just tick over, until the autumn.
So for the time being, I'm just going to enjoy some great wine and plenty of good food.
And buy some more wine, that in time will make a great return!!
And look out for those ignorant, duvet surfing morons who know nothing, post everywhere - that get off on their cretinous diatribes. They will be back soon, disrupting; because they have nothing else to do because they are unemployable!! LOL
Take care, keep safe and I hope that you and your families are well and stay that way.