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Echo Energy details plans for projects in Argentina

Starting in March, the company is planning a three-well workover programme which will be followed by four new exploration wells.
oil and gas operations
“We are now ready to initiate an exciting programme"

Echo Energy Plc (LON:ECHO) has revealed plans for its projects in Argentina where it will drill four new exploration wells this year.

First, however, the company will carry out three back-to-back workover programmes on existing wells at the Fracción D project area. The exploration wells, meanwhile, will be positioned in the Fracción C and Laguna De Los Capones areas.

READ: Echo Energy “ready to initiate” busy exploration campaign in Argentina

A new seismic exploration programme is also planned, at the Tapi Aike exploration block. A recent competent persons assessment identified some 41 leads here, with the potential estimated in excess of 22 trillion cubic feet. The assessment included five individual leads which were each seen to have the potential for 1-3.8 trillion cubic feet of gas.

The Tapi Aike seismic is due to get underway in the fourth quarter, allowing for exploration drilling in 2019. Echo described the potential drill programme at Tapi Aike as “transformational”.

In a stock market statement, Echo chief executive Fiona MacAulay highlighted the “real progress” made by the company since it took up the Argentina assets in 2017.

“It is very pleasing that we have been able to move so rapidly to the operational phase after the completion of the transaction to enter Argentina,” she said.

“We are now ready to initiate an exciting programme of back-to-back workovers, exploration drilling, seismic acquisition and prospect generation.

“Our onshore exploration wells are all located close to existing facilities and in the success case can be commercialised into gas hungry markets at advantaged pricing in very short order. We look forward to updating investors on our progress in due course.”

Drill plans detailed

Echo will start exploration drilling in May with the Estancia La Maggie X- 1004 well targeting 20 billion cubic feet of gas. The well is estimated to have a 40% chance of success. Echo’s stake in the prospect is valued at around US$16.9mln.

It will be followed by the Los Alamos well which targets 21bn cubic feet of gas and is seen to have a 36% chance of success.

The Molino Sur oil target is third in the schedule, anticipated in either later June or July, and it will test a potential 11mln barrel resources. The chance of success is seen at 36%, and Echo’s stake in the project could potentially be worth US$69mln.

Echo plans to end the four-well programme with the Los Joaquines well, in July or August, where it is targeting a 15bn cubic feet prospect with a 36% chance of success.

Each well in the programme has an estimated gross drill cost of US$1.8mln and gross completion costs are budgeted at US$1mln per well. Each is expected to take around 15 days to drill.

The preceding three well work-over programme aims to open up suspended gas wells. Each well is expected to take 10 days, at a cost of US$0.55mln per well. It is planned that the wells will undergo extended well testing, ahead of the sanctioning of commercial production operations.

 

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