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Echo Energy readies for exploration drilling in Argentina

With well workovers, new exploration drilling and upcoming seismic the oil and gas junior is certainly making a busy start to its projects in Argentina.

oil and gas operations
A drill rig is die on site in early May

Echo Energy Plc (LON:ECHO) told investors it soon expects a four-well exploration drilling campaign will get underway in the Fracción C area, in Argentina.

The Petreven H-205 rig is due to mobilise to the first well site, ELM 1004, imminently and it is expected to be on site in early May.

In an operations update, Echo also gave investors insights into the ongoing workover programme, where testing is underway on the gas discovery in the CSo-85 well. Testing is expected to last for a further three weeks as the company works to investigate the asset’s economic viability.

READ: Echo Energy reveals second well workover success in Argentina

The company highlighted that a recent competent persons report estimated the resources in the targeted C1 and C3 between 8.6 and 82 billion cubic feet of gas (low case to high), with the mid case estimate pitched at 26.7bn.

In order to be considered commercially viable the project would need at least 7-10bn cubic feet of gas.

Additionally, it noted that a separate gas target - located in Cañadon Salto - may now be considered for exploration later this year. Here, some 7 to 49bn cubic feet of gas has been estimated.

Workovers under budget

Echo also updated investors on well workovers in the west and centre of the field, which produced a combination of oil and water.

The CSo-80 well has been suspended pending further development of the project, to install an electric submersible pump. Further potential well candidates have now been identified, and will be incorporated into project planning.

It added that the rig will now be demobilised, and that the programme costs for the first part of the campaign have been materially lower than the budget of US$1.5mln.

Seismic exploration is additionally on the agenda, and the company said that it has received multiple highly competitive tenders for the proposed 2,000 square kilometre survey to span the  Fracción C, D and Tapi Aike areas.

The work is due to start later this year, in the third or fourth quarter.

Exceptionally busy

Echo chief executive Fiona MacAuley said: “This is an exceptionally busy and exciting period for the company and we are delighted to have completed this first phase of the operational programme on the company's Fracción D asset safely and successfully.

“We are pleased that the positive results from the CSo-85 Well will enable us to assess the commerciality of the gas project for the field alongside planning of nearer term interventions to re-establish production from existing oil wells.

She added: “We are also poised to commence our four well exploration programme in Fracción C in early May and alongside that are finalising the tenders for the Seismic Acquisition programme across all the licences scheduled to commence in Q3/Q4 2018.

“I would like to thank all the Echo team for their continued efforts to enable these multiple workstreams to continue.”

Quick facts: Echo Energy PLC

Price: 0.42 GBX

AIM:ECHO
Market: AIM
Market Cap: £3.39 m
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