Echo Energy Plc (LON:ECHO) told investors that it has confirmed that its third Argentinian well will be suitable for mechanical stimulation, and, it will now move on to the next stage in operations.
The company, in a statement, updated on the EMS-1001 well at the Fraccion C – which was drilled into the Jurassic Tobifera formation, previously described as “material and transformational”.
Latest operations saw the company perforate and perform inflow tests on two intervals, to ensure there’s no mobile formation water presence ahead of rigless mechanical stimulation work.
The drill rig has now been demobilised, meanwhile, design and planning are being finalised for the stimulation work. The company expects to start the stimulation of both the EMS-1001 and ELM-1004 wells before the end of this year.
Separately, Echo also announced that it has signed a new agreement in Bolivia for the onshore Rio Salado Block.
A technical evaluation agreement (TEA) was signed between Echo Energy Plc and state-owned oil and gas firm YPFB (Yacimientos Petrolíferos Fiscales Bolivianos).
It details the work commitments for Echo to undertake at Rio Salado, including the interpretation and integration of 2D seismic data with a view to better understand deep structures which have been mapped as crossing between the Rio Salado and Huayco blocks.
Echo highlighted that it has estimated the whole structure at around 1.75 trillion cubic feet of gas in place.
At the end of the TEA period, Echo will have the right to negotiate a longer-term contract with YPFB.
The company also said that it will continue to advance its joint venture at Huayco where, in the past year, it has completed a full reprocessing of 250 square kilometres of 3D seismic data.
'We are delighted to have signed the TEA with YPFB for the Rio Salado block, as well as extended our agreement with Pluspetrol regarding Huayco, given the potential we see running across both blocks,” said Fiona MacAulay, Echo chief executive.
“Much technical work has been done and we are pleased that by extending our agreement with Pluspetrol we have given ourselves time to further analyse what we still believe to be exciting potential as we evaluate newly available industry data across the licence areas.”
Echo noted that it does not yet hold an interest in Rio Salado, and any acquisition of a stake in the exploration venture remains contingent upon agreeing to commercial terms in the future.