Echo Energy PLC (LON:ECHO) has signed up a contractor for a 3D seismic programme across its assets in Argentina, starting with the ‘high impact, frontier scale’ Tapi Aike exploration area.
The programme is due to get underway at Tapi Aike in November, to be followed by the Fraccíon C and Fraccíon D areas and it is scheduled to complete in the second quarter of 2019.
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At Tapi Aike, some 41 exploration leads have already been identified, typically each is presently estimated between 50bn and 600bn cubic feet of potential gas resources – with a total of 22 trillion cubic feet estimated in the ‘high case’ across the project’s whole exploration inventory.
Tapi Aike has previously been assessed by 2D seismic, and, three independent exploration plays have been observed in the existing data.
New 3D seismic will be shot over 1,200 square kilometres, specifically designed to de-risk four possible exploration well locations.
"We are very pleased to have been able to finalise the contract award for seismic acquisition with UGA Seismic SA, a renowned Argentinian operator and part of the South American Seismic group of companies,” said Fiona MacAulay, Echo chief executive.
“The negotiation of the competitively priced contract has provided us with significant cost savings against our originally forecast budget and means that we will be able to shoot the entire committed seismic in one of our most exciting licence areas over the next few months.
“We look forward to updating our shareholders further as the programme progresses."
In late afternoon trading, Echo Energy shares were 0.8% lower at 12.55p.
In a note to clients, analysts at 'house' broker Shore Capital commented: "We are pleased to see signature of this competitively-priced seismic contract confirmed today and, with a very active work programme underway across the portfolio in Argentina, including in the shorter term planned stimulation of the ELM-1004 well and testing of EMS-1001, we look forward to further updates as activities progress."
-- Adds share price, analyst comment --