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ECHO ENERGY PLC (ECHO) Share Price Overview

Posts: 212
Opinion: No Opinion
Posted: August 28, 2018

CSo-2001(d) Completion and EMS-1001 Test Planning

RNS Number : 9350Y
Echo Energy PLC

28 August 2018

Echo Energy plc

("Echo" or the "Company")

CSo-2001(d) Well Completion and EMS-1001 Test Planning

Echo Energy plc, the Latin American focused upstream oil and gas company announces the completion of testing of the CSo-2001(d) well and its suspension for a period of pressure monitoring at the Company's Fracción D asset, onshore Argentina, operated by Compañía General de Combustibles S.A. ("CGC").

The CSo-2001(d) well reached a total depth of 1,511m in the Upper Jurassic Tobifera formation across which, as previously reported, significant gas and hydrocarbon shows were recorded both on driling and wireline log data.

The testing programme has demonstrated that long term production from the adjacent Springhill formation has caused significant pressure depletion across this western flank of the field, and that the remaining gas in the underlying Tobifera will likely be insufficient to contribute economically to the Fraccíon D gas project.

This depletion does not impact the Eastern flank of the Canandon Salto field, which has demonstrated through testing and pressure monitoring of the CSo-85 well that the extensive gas resource to the east remains economically viable for a monetisation project and that the information gathered will now enable the appropriate planning, sizing and timing of the required infrastructure.

As previously announced, following the successful workover of the CSo-80 well earlier in the year, a pump will now be installed on that well, and additionally a further 3 candidates for workover activities (pulling jobs) have been selected to restore or improve existing production. The Quintana-1 rig will now remain in the field area to complete these activities which are anticipated to be completed within the next 6 weeks.

The Company will also now work to finalise preparations for testing on the important EMS-1001 well, including the potential stimulation of select intervals which were interpreted as hydrocarbon bearing upon drilling. The Company again cautions that log results in this complex reservoir may not be conclusive indicators prior to testing of the well.

Fiona MacAulay, Chief Executive Officer of Echo, commented:

"Whilst disappointing to see the extent of the depletion effects of the Springhill formation production into this reservoir, the CSo-2001(d) well was drilled in part to help us understand the volumes to be dealt with for the gas monetisation project in Fracción D, and phasing of that development. The focus of any plan will now concentrate on the dry gas of the Springhill Formation contained within the eastern flank of the field area to enable the right sizing of that project. The pulling projects that the rig is now moving to, including the pump installation project on the CSo-80 well, will enable a near term boost to oil production whilst we finalise planning for both the stimulation of the ELM-1004 well and further evaluation and testing of the EMS-1001 well, both anticipated later this year."

Posts: 212
Opinion: No Opinion
Posted: December 18, 2017

ECHO Proposed Acquisition and Notice of General Me

RNS Number : 5748Z
Echo Energy PLC
18 December 2017


18 December 2017

Echo Energy plc

("Echo" or the "Company")

Proposed acquisition of interests in oil and gas assets in Argentina

Placing of 36,391,412 Ordinary Shares at 17.5 pence per Ordinary Share

Intended Open Offer of up to 11,428,572 new Ordinary Shares at 17.5 pence per Ordinary Share

Admission of Enlarged Share Capital to trading on AIM

Notice of General Meeting

Echo Energy plc, the South and Central American focused upstream gas company, is pleased to announce that an admission document detailing the proposed farm-in to 50 per cent. interests in each of the Fracción C, Fracción D and Laguna De Los Capones concessions (the "Concessions") and to a 50 per cent. interest in the Tapi Aike exploration permit (the "Exploration Permit"), each located onshore in Argentina (the "Transaction") has been published and posted to Shareholders. The admission document contains a notice convening a general meeting of the Company for 2.00 p.m. on 3 January 2018 at the offices of Link Asset Services, 65 Gresham Street, London EC2V 7NQ. The admission document includes a Competent Person's Report on the Company's proposed new assets.

The Company expects that trading in the Company's Ordinary Shares on AIM will resume at 8.00 a.m. today.


· The Company announced on 1 November 2017 that, in line with its stated strategy, it had entered into a conditional farm-in agreement with Compañía General de Combustibles S.A. ("CGC") for the acquisition by the Company of 50 per cent. working interests in certain of the onshore Argentinian gas and oil assets of CGC.

· Echo is to acquire 50 per cent. working interests in each of the Fracción C, Fracción D and Laguna De Los Capones Concessions and in the Tapi Aike Exploration Permit each located in the Austral basin of Santa Cruz province, onshore Argentina, and covering a total of 11,153km2.

· The Acquisition is expected to provide the Company with a compelling blend of multi tcf exploration potential, appraisal and production.

· On the Tapi Aike Exploration Permit the Competent Person's Report has identified 41 leads over three independent plays, each typically with gross (100%) prospective resources of 50-600 Bcf at the best estimate level; the largest two are assessed as potentially containing 3.8 Tcf and 2.6 Tcf of gas in place (on a gross unrisked basis) in the high case, with three others potentially containing in excess of 1 Tcf (on the same basis), all of these numbers confirming the highly prospective value of the Tapi Aike Exploration Permit.

· Existing gross production of a total of approximately 11.2 mmscfe/d (5.6 mmscfe/d net to the Company, pre-royalty) on Fracción C and Fracción D with, the Directors believe, the potential to significantly increase current gross production across the Concessions to over 80 mmscfe/d over a five year period.

· The Acquisition will provide the Company with a material position in Argentina, with strong local gas prices, and a well-respected local strategic partner.

· Completion of the Acquisition is conditional, inter alia, on the passing of Resolution 1 at the General Meeting.

· The Company has conditionally raised £6.4 million, before expenses (£4.7 million net of total estimated costs and expenses relating to both the Placing and Admission) through the Placing of 36,391,412 Placing Shares at 17.5 pence per Placing Share, being equal to the closing mid-market price per Ordinary Share on 27 October 2017, being the last date prior to the Ordinary Shares being suspended from trading on AIM pending publication of the admission document.

· The Placing Shares will represent approximately 9.1 per cent. of the Enlarged Share Capital on Admission.

· Following Admission, Echo intends to deploy the Company's existing cash balances and net proceeds of the Placing towards the development of the Licences, and towards the Company's working capital requirements.

· The Company is grateful for the support of all its Shareholders and therefore intends to undertake an Open Offer in January 2018 of up to 11,428,572 Offer Shares at 17.5 pence per Offer Share to raise up to £2.0 million, before expenses. This is intended to provide qualifying shareholders with the opportunity to subscribe for additional Ordinary Shares at the same price as was available under the Placing.

Commenting on the Acquisition Echo's Chief Executive Officer, Fiona MacAulay, said:

"This Transaction will give the Company a material Argentinian position and I am delighted to announce the publication of our AIM admission document and a fundraise at a price equal to the mid-market price prior to suspension in trading. Trading in the Company's ordinary shares is expected to recommence today, with the Transaction expected to complete, subject to shareholder approval, in January. We are delighted to resume trading so quickly ."

This announcement is inside information for the purposes of Article 7 of Regulation 596/2014.

Posts: 212
Opinion: No Opinion
Posted: November 1, 2017

ECHO Farm-In Agreement

RNS Number : 1824V
Echo Energy PLC
01 November 2017

1 November 2017

Echo Energy plc

("Echo" or the "Company")

Country Entry: Argentina

Signature of Onshore Farm-In Agreement covering 4 assets

Echo Energy plc, the South and Central American focused upstream gas company, is pleased to announce that it has entered into a binding farm-in agreement (the "Farm-In") with Compañía General de Combustibles S.A. ("CGC"), a privately-owned subsidiary of the Argentinian conglomerate Corporación América International, for the acquisition by Echo of a 50% interest in each of the Fracción C, Fracción D, Laguna de los Capones and Tapi Aike licences, onshore Argentina (the "Transaction").

The Fracción C, Fracción D, Laguna de los Capones and Tapi Aike licences (the "Licences") all sit in the prolific Austral Basin of Santa Cruz province in Argentina and cover a total of 11,153 square kilometres. The Transaction will provide the Company with a compelling blend of multi Tcf exploration potential, appraisal and production.

Completion of the Transaction is conditional, inter alia, on receipt of third party, legal and regulatory approvals or consents in relation to the Transaction, including Echo shareholder approval.

The Transaction is expected to deliver:

· A material position in Argentina with a well-respected local strategic partner.

· Access to multi Tcf exploration potential on the Tapi Aike licence.

· Access to transformational exploration and appraisal potential across the Fracción C and Fracción D licences.

· Existing gross production of approximately 11.4 MMscfe/d on the Fracción C & D licences, with potential to significantly increase current production to approximately 80 MMscfe/d, underpinned by strong local Argentinian gas prices.

· First drilling in Q1 2018, followed by a period of significant drilling and operational activity.

· Technical Operatorship of the Fracción C & D licences.

The Company would like to invite investors to a live Q & A session hosted via the Company website at 11:00 a.m. (UK time) on 2 November 2017.

Fiona MacAulay, Chief Executive Officer, commented:

"Echo was launched in March this year to secure multi Tcf potential onshore gas assets across South and Central America counter cyclically. This transaction is a transformational acquisition in the region and will form the backbone of our gas business, blending exploration, appraisal and production.

Echo is now positioned as a leading regional gas explorer with a unique platform for growth and a staged work programme. In line with its strategy, the Company will continue to review further opportunities in the region.

We will now focus on completing this transaction and expect to be drilling our first well in Q1 2018."

Tapi Aike Licence

The Tapi Aike licence, which is one of the largest new block awards in Argentina (5,187 square kilometres), benefits from 3,400 kilometres of existing 2D seismic and 3 existing gas discoveries. The Company internally estimates that Tapi Aike block has multi Tcf exploration potential (unrisked gas originally in place).

The consideration for Tapi Aike is:

· No upfront cash consideration.

· Echo to carry CGC for 15% of total Tapi Aike work programme costs during the initial work programme period of 3 years (4 in the event of tight gas classification).

· The work programme over that period comprises reprocessing of selected existing 2D and 3D seismic, acquisition of 1,200 square kilometres of 3D seismic and the drilling of 4 exploration wells. Echo's carry of CGC for the entire work programme anticipated to be in the order of US$9 million (anticipated gross work programme costs in the order of US$60 million).

· Work programme in the first year following completion of the Transaction is anticipated to comprise re-processing and seismic acquisition planning and initiation.

Fracción C & D Licences

Fracción C, which surrounds the Laguna de los Capones licence, is a 5,288 square kilometre area and includes 3 existing production facilities and a gas export pipeline connecting directly to the main pipeline to Buenos Aires (Transportadora de Gas del Sur S.A.). The licence area benefits from 1,192 square kilometres of 3D seismic in addition to extensive 2D seismic coverage and existing gross production of 11.0 MMscfe/d. The Company internally estimates that exploration potential in the block is in excess of 1 Tcfe on a gross unrisked gas initially in place basis.

Fracción D is a 280 square kilometre licence with existing production facilities and a small initial level of production. The Company has identified significant development, appraisal and exploration potential with the field, estimated by the Company to contain gross unrisked gas in place of a mid-case of 183 Bcfe (341 Bcfe upside case, 98 Bcfe low case). The area has a proven gas cap already penetrated by a number of wells. The work programme is designed to explore, appraise and bring into production these resources utilising existing production facilities and a 28 kilometre pipeline to the gas metering point.

All discoveries across these licences are expected to be brought on stream rapidly and with low incremental costs due to the proximity to existing infrastructure.

The consideration payable for Fracción C, Fracción D and Laguna de los Capones will be:

· US$2.5 million cash on signature of the Farm-In.

· Echo to meet 100% of the costs of the initial 18 month work programme (the carry by Echo of CGC's 50% working interest estimated to be between US$9 million and US$12 million) which will include:

o Reprocessing and analysis of existing 3D seismic in the Laguna de los Capones licence.

o Acquisition of c.500 square kilometres of 3D seismic on the Fracción C licence.

o Drilling and testing of 4 exploration wells on the Fracción C licence and their completion as producing wells following a success case.

o Workover of 3 wells on the Fracción D licence and the drilling, testing and completion (or abandonment) of 1 new well in Fracción D contingent on satisfactory results arising from the workovers.

o Acquisition of c.230 square kilometres of 3D seismic in the Fracción D licence subject to satisfactory results arising from the workovers / contingent development well. This seismic requirement may be transferred to the Fracción C licence.

· A deferred cash payment of US$2.5 million on completion of the initial term work programme.

· After the completion of the initial term work programme, the Company has the option to progress to the second term on the licences for which a provisional work programme has been envisaged including expanding the total seismic acquisition across the blocks (including that acquired in first term) to 2,000 square kilometres and drilling a further 8 exploration wells across the licences.

· On election by the Company to progress to the second term, the total carry of CGC's interests by Echo (including all expenditure in the initial term) would be capped at a total of US$35 million and during the term a second deferred payment of US$5 million would be payable which may at the election of the Company be deferred to development costs.

· CGC and the Company will enter into a joint operating agreement on completion of the Transaction with Echo being appointed as Technical Operator of the Fracción C, Fracción D and Laguna De Los Capones licence areas.

The initial consideration payments and the initial term work programme costs under the Transaction can be met from the Company's existing cash balances.

Should the Transaction not be completed by 29 December 2017 or a subsequent date which the parties may mutually agree (the "Closing Date"), the Farm-In will lapse uncompleted and the initial US$2.5 million payment in relation to Fracción C and D will not be refundable, other than to the extent of US$0.5 million in certain limited circumstances. In the event that the Company fails to gain Echo shareholder approval for the Transaction, a further sum of US$2.5 million will be payable by the Company to CGC. This additional US$2.5 million payment would be refundable in certain limited circumstances.

Suspension of Ordinary Shares

By virtue of its size, the Transaction constitutes a reverse takeover under Rule 14 of the AIM Rules for Companies. Accordingly, the Company's Ordinary Shares will remain suspended from trading on AIM, pending publication of an AIM admission document or an announcement that the Transaction has been terminated.

As part of the AIM admission document a competent persons report in respect of the Licences is being prepared by the internationally recognised Gaffney, Cline & Associates.

Further announcements will be made, as appropriate, in due course and, following completion of the Transaction, investors will be invited to view the Company's new Argentinian portfolio in forthcoming investor trips to the region.

This announcement is inside information for the purposes of Article 7 of Regulation 596/2014.