viewEcho Energy PLC

Echo Energy invests in infrastructure to boost production operations

The company has bought gas compressors and has begun reopening oil wells shut-in previously as crude prices fell.

Echo Energy PLC - Echo Energy invests in infrastructure to boost production operations

Echo Energy PLC (LON:ECHO) has told investors it is investing in its operations in Argentina to boost performance.

The company has acquired compressors, previously on lease at a cost of US$2.2mln over 36 months, which are used to lift pressure in gas transport pipeline.

The transactions enable some US$100,000 of operating expenses to be saved per month and gives security for future operations.

READ: Echo strikes deal to avoid extra Tapi Aike costs

Echo said it is better able to facilitate anticipated production growth in the future.

"We are now moving into a period where we are both looking to invest in infrastructure in anticipation of future growth, to add value for shareholders wherever we can, such as through our purchase of the compressors at Santa Cruz Sur, and also increase output from certain wells to maximise returns from our assets,” Martin Hull, Echo Energy chief executive said in a statement.

“This combination of investment and active management of the portfolio demonstrates that we are now entering an important period of growth for Echo, as we look to the future and deploy both time and resource above and beneath the surface to build our business," he added.

Echo also highlighted improved market conditions which allow the company to carry out work that will increase liquids volumes at the Santa Cruz Sur operations, bringing back online well that were shut-in earlier in the year amidst falling oil prices.

Five wells have been brought back on-stream so far, adding around 108 barrels of oil per day of production which projected across the remainder of the year is expected to add some US$120,000 of revenue (based on a US$45 per barrel Brent oil price).

Echo noted that the wells that have returned to production have seen around 13% better performance, compared to before, potentially due to pressure build whilst offline. It said it will closely monitor whether this is repeated in other wells.

Santa Cruz Sur produced an aggregate of 511,416 barrels oil equivalent per day (boepd) up to September 7, 2020, with the corresponding daily rate averaging 2,040 boepd.

Quick facts: Echo Energy PLC

Price: 0.66 GBX

Market: AIM
Market Cap: £7.97 m

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