Echo Energy PLC (AIM:ECHO) shares dropped some 40% in Tuesday morning trade after the company flagged a fall in production at its Santa Cruz Sur assets in Argentina.
The company, in a statement, reported that it produced a total of 113,270 barrels oil equivalent. The daily gas rate fell to around 6.3mln cubic feet per day, from 7.3mln in the prior quarter, meanwhile, Echo’s liquids rate was down 29% at 213 barrels of oil per day (bopd), down from 298.
It noted that Argentina's National Secretary of Energy has extended the Gas Plan regime to the Santa Cruz basin, enabling companies to tender for long-term contracts until December 2028. Echo Energy's local subsidiaries are authorised to participate, with tenders closing on 30 April 2023.
Echo noted that it previously reported (on 2 February) that as of early January 2023, it had US$1.1mln of cash and US$19.5mln of creditors, mostly in Argentina which has been impacted by COVID-19 and subsequent inflation (currently running at 100%).
In the UK account, the company said it had less than £100,000 though it is expecting a revenue receipt net to Echo of approximately £500,000 by the end of April.
Echo added that it is currently considering a proposal from a significant Argentine investor to inject cash and assets into the business, while the board explores financing options to secure additional working capital resources.
In London, Echo shares were down around 37% at 0.042p each, having been as low as 0.035p at one point this morning. The share price gives the firm a market value of just over £2mln.