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No let up in pace as Echo Energy pushes ahead with Argentina projects

Echo recently completed a four-well workover campaign at Fraccion D, while earlier in the year four exploration wells were drilled back-to-back.
Argentina
OVERVIEW: ECHO The Big Picture
Four exploration wells have been drilled this year

Echo Energy PLC (LON:ECHO) has a 50% working interest in four onshore blocks in Argentina.

Of these, Fraccion C, Fraccion D, and Laguna De Los Capones, either have previously or are in production while the fourth is an exploration permit for the hugely promising Tapi Aike block.

READ: Echo Energy puts CFO Martin Hull on board

Echo recently completed a four-well workover campaign at Fraccion D, while earlier in the year four exploration wells were drilled back-to-back.

Of these, three were in Fraccion C and one in Fraccion D.

Two of these, EMS-1001 and ELM-1004, will be subjected to mechanical stimulation tests by the end of the year.

The workovers on the four wells at the Cañadon Salto Field in Fracción D, meanwhile, boosted output to 115 barrels per day from 5 barrels.

Echo will now monitor the performance of the wells before making a decision on a full-scale remediation project across the Cañadon Salto field that might potentially see production levels of over 400 barrels oil per day.

Prior to the workovers, production across all of the three CDL licences (Fracción C, Fracción D and Laguna De Los Capones) was around 500 barrels per day excluding gas.

Elsewhere, a contractor has also been appointed to shoot 3D seismic over Tapi Aike this year and Fraccion C and D in 2019 to identify new drill targets.

Results are due in the second half of 2019.

Seismic planned

In September, Fiona MacAulay, chief executive, said:  “We are currently preparing for the 3D seismic shoot on Tapi Aike which we expect to commence this year.

The seismic acquisition programme should take approximately 4-5 months, with processed results expected in H2 2019.

“Once this new data has been integrated into our current dataset, and the identification and hi-grading of prospects has taken place, we would be anticipating to be drill ready at Tapi Aike by late 2019.”

Shore Capital, joint house broker, said the very active work offers excellent scope for reserves and production growth.

Echo though is still at a very stage of development and at the half year the production operations generated some US$2.1mln of oil sales and US$2.1mln of gas

At the end of June, the company had £26.1mln of cash.

Oil and gas prices moving positively

Argentina has been a difficult place to explore but global oil and gas prices have moved in the sector's favour even if the economic situation in the country remain uncertain.

First oil sales from its Argentine blocks were priced at more than US$70 per barrel or close to a three-year high for Brent crude.

Joint evaluation in Bolivia

Away from Argentina, Echo has an involvement in the neighbouring Latin American country of Bolivia, where it is currently partnered in a joint evaluation agreement with Pluspetrol for the Huayco block in the prolific Tarija basin.

Tarija is believed to be home to 85% of Bolivia’s gas reserves.

Echo also recently agreed a new agreement in Bolivia for the onshore Rio Salado Block.

A technical evaluation agreement (TEA) was signed with state-owned oil and gas firm YPFB that detailed the work commitments for Echo to undertake at Rio Salado.

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