Last checked at 8 Dec 2020 07:00
8 December 2020
Echo Energy plc
("Echo" or "the Company")
Operational Update
Oil Production Increases
Echo Energy, the Latin American focused upstream oil and gas company, is pleased to provide an update on operations at its Santa Cruz Sur blocks onshore Argentina.
As a result of the continued improvement of market conditions, the Company continues to successfully bring oil wells back into production that had been shut in earlier this year. Since 17 November 2020, three additional Springhill fields and 1 Tobifera field have now been brought back online in the Chorrillos and Palermo Aike licences increasing gross oil production by around 50 bopd to approximately 300 bopd (c.210 bopd net to Echo's 70% interest). This recent increase in oil production represents an uplift of approximately 19% across the Santa Cruz Sur assets. Gross gas production from Santa Cruz Sur continues at a rate of 14 MMscf/d (10 MMscf/d net to Echo's 70% interest). The production levels from individual wells previously shut in continues to indicate that the shut in period has not had a determinantal impact on reservoir behaviour. The programme to restore previously shut-in production is ongoing and given these positive results, and continuing market improvements, the Company and its partners are reviewing options to accelerate production reopening.
In addition, post-shut in production levels at the Palermo Aike field suggests that new opportunities may be available to capture additional production potential. In this field, post-shut in pressure and production data indicate the potential for significantly increased production levels through a combination of production optimisation on the existing field and, later, with new development wells. With just the existing well stock, the data indicates a gross production potential of between 126 bopd and 189 bopd (88 bopd to 132 bopd net to Echo's 70% interest) subject to availability of increased liquid storage and separation facilities at the field. This compares to an estimated restricted gross production rate of 31 bopd pre-shut in earlier this year.
The Palermo Aike field was historically overlooked due to a lack of infrastructure in the area, which restricted production rates. However, the seven-month shut in period and subsequent production start up has provided important subsurface data to assess the field's potential in more detail. The Company now believes that there is also exciting commercial potential with future development wells targeting other parts of the field. These will be assessed and included in the portfolio of production opportunities across the Santa Cruz Sur assets as the 2021 operational plan is progressed.
Martin Hull, CEO of Echo Energy, commented:
"This has been a very busy period for Echo. Further to recent announcements on the debt restructuring and fundraise which have provided Echo with a materially strengthened financial platform, and positive steps to recoup and streamline our VAT payments in country, I am very pleased to announce that we have continued to reopen previously shut-in fields leading to material production increases.
Across these fields, we are pleased to have seen no evidence of any reservoir deterioration as a result of the shut in periods and in the case of the Palermo Aike field, we have in fact seen a material increase in production levels. We see significant potential for further field reopenings and production optimisation activity across our production assets both this year and throughout 2021 in what is shaping up to be a busy operational period for the Company."
Enquiries:
Echo Energy via Vigo Communications
Martin Hull, Chief Executive Officer
Vigo Communications (PR Advisor) +44 (0) 20 7390 0230
Patrick d'Ancona
Chris McMahon
Cenkos Securities (Nominated Adviser) +44 (0) 20 7397 8900
Ben Jeynes
Katy Birkin
Shore Capital (Corporate Broker) +44 (0) 20 7408 4090
Jerry Keen
The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.