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Echo Energy extends acquisition agreement for Santa Cruz Sur assets

The group said the extension has been agreed to allow enough time for a waiver to be received from the minority co-owner of the assets, which is expected to be received by 6 November

Echo Energy PLC - Echo Energy extends acquisition agreement for Santa Cruz Sur assets
The transaction will give Echo non-operated 70% interests in five blocks adjacent to its flagship Tapi Aike project

Echo Energy PLC (LON:ECHO) has extended its acquisition agreement for the Santa Cruz Sur asset package in the Austral basin in Argentina.

The South America-focused energy group said the extension has been agreed to allow enough time for a waiver to be received from the minority co-owner of the assets, which is expected to be received by 6 November.

READ: Echo Energy expands Argentina footprint acquiring package of producing assets

If the waiver is not received by this date, Echo said the acquisition will terminate unless there is a further extension.

The acquisition, announced on 21 October, will see Echo pay US$7mln in cash plus US$1.5mln worth of shares, each priced at 2.91p, for the assets, and potentially US$1.5mln of deferred consideration contingent on reserve increases before October 2020 – as part of the deal Echo is also pledging to fund the vendor’s costs in a new well planned in the fourth quarter.

The transaction will give Echo non-operated 70% interests in five blocks which host production, all of which are adjacent to its flagship Tapi Aike exploration project.

"We look forward to further progress towards completion of what we believe is an excellent transaction for Echo, diversifying the portfolio, providing material production and consolidating the company’s position in the Austral basin at a very attractive price", said Shore Capital, the company's house broker.

In early trading on Monday, Echo’s shares were steady at 3p.

Quick facts: Echo Energy PLC

Price: 0.5 GBX

AIM:ECHO
Market: AIM
Market Cap: £3.56 m
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