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My thoughts are quite simple.
This first Tapi Aike well is very important.
More for CGC as they own 81% of the asset, as Operator they will be ultra careful with this drill.
The "High Case" estimate for this target is 1.1 Tcf, which is a shedful of gas.
A gas pipeline, to export any discovered gas to is, a stones throw away.
CGC are good at building pipelines and the related infrastructure.
All of the above is fact, not ramping.
But absolutely NOTHING can be taken for granted.
This is Oil & Gas Exploration, this IS a risky business.
Until the prospect is drilled AND tested we will not KNOW what is there AND how much.
So we have all hung in with Echo for Tapi Aike.
CGC and Echo have decided that this is the best shot in the Eastern Cube that has the greatest chance of producing an economic result AND derisking the surrounding area.
All, we have to do now, is sit on our hands, and wait.
Being patient, I think that we should know within 8 weeks.
Others may say less, but what evidence will they have for a quick and trouble free drill, no requirement for hydraulic fracturing and then testing. They may need to bring in hydraulic fracturing equipment and materials, test equipment also. And Christmas may play a part in crew availability. So the middle of January, if sooner then terrific!
And no doubts, the rampers will start with their illogical and speculative nonsense shortly.
Seen it all before, those with decent memories will remember the "HALF GRABEN" TOSH of last autumn.
That was utter rubbish predicated on a spectacular misreading of the geology.
ONLY drilling and testing will answer the question of whether Tapi Aike will produce hydrocarbons in economic abundance at this location.
We can only hope, but not too long to wait!
WT
Well done to Martin and the team on the Santa Cruz maps and explainer.
The only things that I am not certain of is quite where the Campo Limite well is located, is it in the Palermo Aike permit area.
And quite when do we start getting the Santa Cruz production income begin to stream into our Corporate account.
WT
I could not agree more.
I have never been comfortable with James Parsons Esq. having any role within Echo Energy.
After Sound, whatever his reputation originally was, surely is in tatters?!?
I imagine him now as having the reputation of being the Kryptonite of AIM!!
He brought in Ms Macauley, and please excuse me for being unkind, but the Princess was as big a ramper as he was at Sound. It is entirely possible though, that she was only obeying orders.
We have a number of Sound executives in Echo, taking salary for I do not know what.
Are we a salary generator for his mates??
I do wonder what they bring to the party.
As far as I know, it is Martin Hull who runs the show here.
He was touted as the Financial and Merger/Acquisitions guy and after last years debacle he has found us assets that may well from the numbers, pay for themselves within 18 months.
Sound are on a new pathway, not the one touted by JP.
And many there have lost their shirts, some their vests too.
We, at Echo are heading in another direction, hopefully after a short sojourn without JP and his parasitic crony's!
I was taught many years ago, that change was inevitable - don't fight it but embrace it.
WT
I think that one reason for our SP being held back is the political situation in Bolivia.
The government there is in disarray, there is now, no Hydrocarbon's Minister - mind you, if I remember correctly he was most adept at shooting from the hip with respect to discoveries. He required a Sir Humphrey to keep him in check!! lol!
Bolivia is an asset of ours, ok a minor one and like all Energy Companies - political upheaval is not great for economic stability.
https://www.rigzone.com/news/wire/bolivia_crisis_thwarts_shell_gas_exploration-12-nov-2019-160305-article/
WT
Correction
I stated that the 1st Drill target in the Eastern Cube was High to Low case 420 -160 -100 Bcf.
On rereading the numbers actually are 1.1 Tcf - 420 Bcf - 160 Bcf.
This makes far more sense, as I presume this drill will also derisk the adjacent area and not ignoring that success here will enable an economic find to be produced to the nearby gas pipeline. Ergo, monetisation would be relatively cheap and quick.
Even a 500 bcf discovery on this 1st drill should give the SP a decent shot in the arm.
Apologies for my error.
https://www.echoenergyplc.com/media/1499/echo-energy-tapi-aike-drill-programme-presentation-nov2019.pdf
WT
We have had positive and hopeful messages regarding the Bolivian block in the past but nothing of late.
It was always obvious that we could not afford to drill it ourselves, possibly the only way forward would be a carry where we retained a small interest. I am not aware how other drills have done on adjacent blocks, was the Repsol drill actually a success? And the Shell drill?
We have spent cash here and have a Bolivian manager on our books. So bleeding expenditure with what prospects of recouping our investment?
Like our outdated website, we should be looking to tidy up our portfolio. A statement of intent would be useful!
And an indication of what the 3D on Tapi Aike produced? I am not looking for absolutes but did the new information confirm what the 2017 CPR said? Can we be hopeful or is Tapi Aike less than hoped for?
This is mildly reminiscent of the way the bad news was delivered early this year, with equipment "delays" and then catastrophe as far as all 2018 drills were concerned.
It is all very well to say that Martin Hull does not ramp as Ms Macauley or Dr Bessa did. I know that we have just taken on board a "new" asset for us, we will be relying on the Operator to keep production on track. Close oversight will be required to maintain production levels, slippage is always a possibility due to equipment failures, operational difficulties and the like. Being brutal, why did the previous owner sell the asset? I could go on but will refrain!!
I for one would like to see an overall assessment as to where Echo is today.
Having the prospect of 2 drills done by partners does not do it for me.
Remember, the Chance of Success number is very often in the 30% region.
And that number will be lower when you define CoS.
We are looking for a drill that produces hydrocarbons that can be commercially exploited to produce an acceptable profit.
So gas shows is failure.
As is a sub-optimal accumlication of gas. i.e. not enough hydrocarbons to warrant extraction.
Anything less will be defined as a failure.
We should all go into the next few months will our eyes wide open, bullish optimism does not cut it for me.
Maybe not the message that you want to read on these pages!
All that I am looking for a message that realistically defines where Echo actually stands today.
As it is, there are many unanswered questions.
Is that too much to ask for?
WT
Drule
To be honest, I think that we would have to find a 2 Tcf gas field to get back to a 13P share price.
Agree or disagree, that is my opinion!
O/T
trellis 35.
Rioja, never a favourite of mine where many wines are like "chewing a plank of oak!"
Ribero del Duero more to my taste, but give me a Northern Rhone Syrah every time as my preference.
Hi v2cola
Rereading the various RNS's that we got, the one on the 20th of May struck a chord with me when it said "The CDL licences currently deliver declining production to Echo Energy at an unacceptable financial return for shareholders. Last year we went from 4 workovers that produced an increase in production. We were then bullishly looking to identify more wells to workover, to the New Year when we then reassessed and suspended the program. Finally we were not happy with the outcome of the workover program and gave them back to CGC.
Workovers in my Oilfield experience can produce great value for the investment, I have seen a number of wells that after work, for a short while produced good numbers but then rapidly reverted to the production rates pre-workover. CGC are the local experts, if this was going to be such a terrific investment why did they not do it when they were the 100% owners?
Being brutal, CGC 100% owned these Austral Basin assets, we went in, spent our money and CGC have got the asset back AND 62% of our Tapi Aike ownership. That was great business for them!
That is now history.
My big question is, from the outset we were told that there is MULTI TCF potential on Tapi Aike. Also that the licence for this block was hotly contested.
What I do not understand is the mid case success for CLMx-1 is a mere 160 bcf. Admittingly on a CPR done in 2017 without the benefit of the very recent 3D survey and state of the art geophysical and interpretive tools which one must presume were employed here. Maybe, they saw something on the 3D that was not on the 2D, I certainly hope so.
On one hand, I can imagine that they (CGC & Echo) moving the Petreven - 205 rig from East to West as I imagine that the last drilling assignment was to the East of this well location. So maybe this was the best prospect in the Eastern Cube, with the benefit of the 3D. Then it will move to the Western Cube where high pressure gas was seen on previous drilling.
It is entirely possible that this 1st well location has far more gas in place than was postulated in the last CPR. I really would have liked to have been given a current CoS, that would have been useful.
But this is all speculation, the 1st RNS on this drilling program will speak volumes!! LOL!
WT
Hi trellis35
Believe me, I take no pleasure in being critical of the last 12 months at Echo.
Happily, the moronic donkeys who "screamed" Half Graben and the like with every fibre of their being have decamped elsewhere, to ply their ramping trade.
We seem to have dumped the Austral after the unmitigated disaster that it was for a similar(ish) asset. What bothers me is that it would have presumably been Dr Bessa with Ms Macaulay who rated the Austral with overblown confidence. This latest acquisition must be ALL ON Dr Bessa, as Martin Hull is no oilman. Apparently 15 workovers to do, we all should remember how that turned out the last time. Without wishing to be unkind, he had better get it right this time, or else all he may hear is the clatter of the slamming door as he exits the building.
I note that his incredibly bullish YouTube video that caused many to invest in Echo has been taken down!!
This must be day one of Echo Energy V2, I personally expect nothing from Bolivia. All gone quiet there. if, and it is a big IF it turns out to have some value - then terrific. Not holding my breath though!
As investors we need to see in map and tabular form quite what we have recently acquired. And an updated CPR.
We need to have the website brought up to date.
I am not at all interested in a video of seismic trucks trampling all over the Pampas (lol!), that is history.
I am more interested in the interpreted results of all of that vehicular diesel that was used, otherwise we will have Extinction Rebellion on our tails.
The 3D must have provided an up to date indication of what we "MAY" expect to find on Tapi Aike. Nothing is certain, but an idea of what might be there is now in our hands. It may be terrific or conversely less than we might have hoped for but that is the world of Hydrocarbon Exploration. We need that information.
For example, our recent asset purchase may be predicated on very good 3D Tapi Aike indicators, there again maybe not.
I am not encouraged by the first drill best case estimate of less than half a TCF!
Best to wait and see.
Off topic
Currently enjoying some CdR's and Marsannay from 2013.
If you can find a few bottles of Jaboulet's Crozes Hermitage "Thalabert" then snap them up.
The 2012/13/14 are drinking very well after a few hours in a decanter.
With this amazing run of good vintages in the Rhone Valley, I have a decades worth of drinking but I have to wait until they are ready. Next out of the blocks is Northern Rhone 2018 which will be terrific, less so the South. Bordeaux 2019 excellent and Red Burgundy 2018. And Champagne 2018, possibly the best for half a century, but it will be a decade before they are released. I just snaffled up some Bollinger Grand Annee 2008 which was released last spring. It was scored 98/100 but was expensive with a very big "E!!"
WT
The first drill (CLMx-1) of 4 located in the Eastern Cube of Tapi Aike.
The recent (Friday afternoon on the back of a fag packet) map on the website, gives a mid case estimate of gas discovery of 160 bcf. This number was made in 2017 in the Gaffney-Cline CPR, which turned out to be somewhat off target, given our experience in the 2018 drilling campaign and workovers.
It does not take a mathematical genius that IF (no CoS given) this well is successful and achieves the mid case, no one if likely to get rich.
If the first well in the program has a high case of 420 bcf, the question that I ask myself is why are we NOT drilling leads that have TCF after a number?
I also wonder why the website has not been updated with a map and details of the recent acquisition, or have I missed something? Looking at other Oil Explorers websites, they do a far better job of keeping their investors fully informed with quality maps, great explainers etc. Ours is just plain amateurish!!
And we still have content on the website that refer to our dearly departed CEO and leases that we no longer have any interest in.
https://www.echoenergyplc.com/media/1405/echo-energy-may-18.pdf
Is it any wonder that we have few new investors, poor take up for an investors ( Asda Lunch Meal Deal) lunch with a luke warm glass of Blue Nun, no roadshow program and a website that is historically inaccurate. And when is the next session of "Time with the Team"
Mushrooms are kept in the dark, I think that I know what that is like now.
And NO, I haven't sold a single share!!
Have a good weekend.
WT
When I see the SP at Eco all over the place following their 2nd successful well in Guyana yesterday?
We are potentially a fortnight (Q4) from our 1st well being drilled on Tapi Aike. Improbable, but you never know!?!
Some good news may come from Bolivia.
There might be a leak on what has been seen on the recent 2 cubes of 3D on Tapi Aike. These days, especially in well known geology, it is not that difficult to make a very good estimate of what and how much hydrocarbons might be in place.
I imagine that these 4 wells will be the very best prospects that have been interpreted.
High pressure gas has been found at Tapi Aike, so in my opinion; all to play for.
As far as our SP is concerned, the MM's will play their games ad nauseum; that is what they do.
Whether you are Echo or Eco!
WT
https://www.marinetraffic.com/en/ais/home/centerx:-57.5/centery:8.1/zoom:8
WT
A top up this morning.
WT
Lets say on our 4 well program, we do find a 1Tcf reservoir.
To get that gas to the pipeline, we would have to drill initially appraisal and then production wells.
Lets assume all goes well, a pipeline system to a gas treatment plant and then a single pipeline to connect up with the regional gas export pipeline. Even 19% of that will not be cheap and currently we do not have the cash. So success may well require funds to develop a field.
My best scenario would be to find a cracker of a gas field and then sell it on.
CGC might want to buy it back from us?
The worst case scenario might be, a decent gas find but not big enough to justify the expense of development.
There are a number of outcomes from this drilling program.
No commercial volumes discovered.
A marginally commercial field.
A decent sized field that could be profitably exploited.
A big gas field, 1 Tcf.
A mega gas field, 3+ Tcf.
I think that given that they have done up to date 3D seismic on the greater acreage of Tapi Aike, done the interpretation and proccessing and will have picked the very best of the prospects for this drilling program. The likelyhood is that from the 4 drilling locations it is more than possible that all (or maybe 3 out of 4) will produce better than commercial volumes.
The big question is " How Big?"
We had all that nonsense last winter when rampers said that we virtually could not fail.
Where are they now, I wonder with their "Half Grabens" etc?
Well fail quite spectacularly, is exactly what we did.
The upside here is that this time, we are not talking about "fractured volcanics" but the very well understood and proven sandstone reservoirs.
Gaffney Cline gave a gross recoverable estimate for Tapi Aike:
Low 1.4 TCF
Best 4.2 TCF
High 12.4 TCF
A word of caution though, their estimates for other parts of our previous Argentinean portfolio, were inaccurate.
But there is the question as to whether any gas in place will flow to surface. There is evidence that on previous drills into this strata at Tapi Aike, the gas did not flow, the reservoir was tight. But fracking techniques over the last 40 years have improved immeasurably, evidenced by the Chilean Oil Company (ENAP) having achieved commercial flowrates from similar resevoirs a scant 60 km South of Tapi Aike.
There is a history of very high pressure gas and blowouts here, so I am certain that great care will be taken during drilling ops. Forget the hydrocarbons, we do NOT want to see anyone hurt.
So optimistic, well yes.
But as I have said many times; this is Oil and Gas Exploration so absolutely nothing can be taken for granted.
In the North Sea, Shell has produced a high temperature 200 deg+, high pressure 1000 bar and very sour gas field.
So Tapi Aike in the relative scheme of Oil & Gas should be a relative doddle! LOL!!
Lot's to look forward to, I do wonder quite what is causing the upswing in our SP.
I am not complaining though, maybe others have done some r
Plain and simple, a leak on news.
It may be on an update on what they see in Tapi Aike. Keep Dr Bessa away from that one!
Or it may be Bolivia.
Or more improbably, it may be M & A. I am aware that Mr Hull has been away, travelling of late.
But whatever the reason for the upswing in the SP, we require patience for the drilling campain to get underway.
We are the minnows in Tapi Aike now, CGC call the shots.
To be honest, after last winters drilling debacle, I do not see us as having very much expertise to contribute to drilling location, well infrastucture or the like. Last year, if I remember correctly, Echo did not even have a representative at the drilling locations whilst operations were progressing.
WT
O/T
trellis35
Sauerkraut goes incredibly well with slow cooked gammon (a favourite of mine) and your Mosel would compliment it well!
crudehope
By your lack of a riposte, you seem to have missed your misspelling of "Cwmraeg!"
You could pop down to Caerdydd at the Principality on Saturday and cheer on the "bachgens!" when the Irish are in town.
I hope that you enjoy your trip.
WT
trellis35
A Riesling would be fine but I detest the grape.
Also a Pinot Noir would be fine!
WT
Cwmraeg!! The correct letters, sadly in the wrong order. Was it ever thus?!?
Diolch
WT
Can anybody enlighten me regarding the following questions?
1. Are we fully funded for our 19% share of drilling costs on the 4 well Tapi Aike drilling program later this year?
I clearly remember last winter, that drilling operations were to suspended for the operations crews to have a Christmas/New Year break with their families. Due to equipment failure that did not occur. But this year with a 4 well program, if holidays must be taken as per union negotiations; we might find drilling suspended. I did ask this question at the last "Time with the Team" session and Dr Bessa answered saying that drilling does NOT stop for holidays. Given my experience, that is the general rule. BUT if the equipment failure had not occurred last December, we were definitely told that there would be a holiday break.
2. So my question is whether the same applies to Tapi Aike, or will drilling go on through the holiday period?
My feeling is that drilling will NOT START in December, if a holiday break is to be taken
.
It is not good operational practice to begin drilling a well and then suspend it part the way through. Operational and security staff should be in attendance to monitor a partly drilled well and to look after the onsite equipment, if the drilling crew have left the wellsite.
Note that I have emailed Mr Hull with the same two questions, as yet no reply received - but it is early days or he might be on holiday.
WT
Surely we must have sufficient cash to fund 19% of the 4 well Summer drilling program?
If we did not, that information should be in the public domain.
I do however believe that we will not start drilling ops until January, 2020.
@Trellis35
A bottle of Gigondas Cazaux Sarrasine 2013 with the Rib Roast ce soir. It is drinking very well.
Sadly not a fan of Malbec, which might make a trip to Patagonia fairly miserable!! lol!
Enjoying the cricket at Lords, after a miserable weekend last week due to the result at HQ, made better by yesterdays victory at the Principality Stadium. C'est la vie!
WT
I clearly remember being told by Echo last year that the drilling crews took holidays over Christmas/New Year.
If this still applies, then I think it fairly unlikely that TA drilling will start before Q1/2020.
And we do not know how Well results will be handled.
Well by well, or some other way. CGC hold the cards in that department, and they are not a public company.
Some scally might want to take a look at drilling sites with IR detectors, particularly at night for evidence of flaring.
Or a drone.
Or Satellite photographs.
Who needs a smartphone or an RNS? LOL!!
Not a particularly informative "Time with the Team," but given the constraints of financially sensitive information, they never will be. More a reassurance to investors with rehashed, previously released information.
WT