Echo Energy PLC - Tapi Aike Restructuring
("Echo" or "the Company")
Successful Tapi Aike Restructuring
In line with the Company's focus within its portfolio on cash generative production and on reducing costs, while maintaining exposure to exploration and development opportunities, Echo has entered into an agreement with the Operator to reposition the Company's 19% participating interest in Tapi Aike such that Echo is relieved of all Licence funding requirements including ongoing pre-drill work and remaining Licence commitments (including well costs, abandonment fees and decommissioning liabilities) through a withdrawal from Tapi Aike with an effective date of
The Western Cube and the exploration potential it provides remains strategically important for the Company and while management's technical view of its prospectivity remains unchanged ahead of final data evaluation, the restructuring affords the Company an opportunity to re-evaluate its ongoing commitment to the Western Cube and to the related future costs and liabilities at a later date - with the benefit of being able to make that commitment with greater visibility of well costs, technical data and market conditions at the time.
Before the exercise by the Company of the Option, the restructuring is expected to save the Company approximately
The Option is exercisable by the Company at any time up until 30 days prior to the drilling of the Relevant Well for an additional payment to the Operator by the Company of
"We have taken a series of steps in recent months to reinforce our financial platform and deliver innovative mechanisms to reduce upfront cost while maintaining both exploration and development optionality. We continue to adapt Echo's strategy for the current oil and gas price environment, with a clear focus on production, cost reduction and on investing where we can most effectively add value for shareholders. We are therefore delighted to have restructured our relationship with CGC which will enable us to sharpen our near term strategic focus on our low-risk production and substantial development and exploration opportunities at Santa Cruz Sur, while also streamlining our overall operational costs by eliminating immediate expenditure at Tapi Aike. It is important that we retain optionality and can, at the Company's discretion, participate in the drilling of the next well at Tapi Aike should we elect to following assessment of the technical data and prevailing commercial circumstances.
We have also continued to screen multiple assets in the LatAm region, looking for opportunities to deploy innovative financing solutions and look forward to updating the market on progress right across our portfolio as we look to progress opportunities both in the near term and further out."
A presentation outlining the new restructured relationship and interest in Tapi Aike is available on the Company website at www.echoenergyplc.com.
For further information, please contact:
+44 (0) 20 7390 0230
Cenkos Securities (Nominated Adviser)
+44 (0) 20 7397 8900
Shore Capital (Corporate Broker)
+44 (0) 20 7408 4090
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.
This information is provided by RNS, the news service of the
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