Fiona MacAulay, Echo Energy CEO

Echo Energy plc, the Latin American focused upstream oil and gas company, announces its unaudited interim results for the six months ended 30 June 2018. 

Highlights

• Completion of Argentinian farm-in and re-admission to AIM in January 2018
• 3 well workover campaign at Fraccion D completed ahead of time and under budget during the period
• 4 well back-to-back exploration campaign across the licences on independent structures commenced in May 2018
• Gas discovery and extended well test on the CSo-85 well on the Eastern flank of the Cañadon Salto Field at Fraccion D
• H1 2018 oil sales of US$2.1 million and gas sales of US$2.1 million
• Cash balances of £26.1 million as at 30 June 2018

CHIEF EXECUTIVE OFFICER'S STATEMENT

"Our bold growth strategy in Latin America has provided us with access to a balanced portfolio in the region where we are focused on multiple exploration opportunities, including the high impact Tapi Aike licence, and have the potential to add production, cash flow and additional reserves to the portfolio."

The first six months of this year have been incredibly busy for your company, and post period this level of activity has continued. In January the Company was readmitted to trading on AIM following completion of the farm-in agreement with Compañía General de Combustibles S.A. ("CGC") which saw the company take a 50% interest in a number of assets in Argentina. Our work on these licences, both technical and operational, has formed the bulk of our activity year to date. 

Starting in April this year the company executed a three well workover campaign on its Fracción D licence. This activity was completed ahead of time, under budget and with adherence to the highest standards of health and safety. The highlight of the campaign was the gas discovery and subsequent extended well test on the CSo-85 well on the eastern flank of the Cañadon Salto Field for which we are currently developing plans for a commercial gas project. 

The workover activity will also result in an increase in oil production across the fields and will contribute to our oil sales in Argentina, with ongoing oil sales delivering a combined US$2.1 million to the Company in H1 2018 alongside gas sales of US$2.1 million. 

A subsequent exploration campaign comprising the drilling of four back to back exploration wells on independent structures began in May 2018, producing positive results from the Tobifera formation across the licences, but the company notes caution should be applied prior to testing of the well due to the complex nature and petrophysics of the volcaniclastic reservoir. The company is still in the process of evaluating the considerable volume of data generated for assimilation into the regional model.

Post period the ELM-1004 well which displayed positive readings during the drilling phase yielded dry gas to surface on initial testing and a well stimulation programme to improve the rate is now being developed, while the testing of the EMS-1001 well is due to commence later this year.  

In May, we announced the completion of an £8.5 million placing to fund an extended seismic campaign on the Tapi Aike licence. We moved rapidly to secure this additional funding as a window of opportunity had opened in which we were able to secure pricing for a total of 2,000 km2 of 3D seismic acquisition across both the Tapi Aike and Fracción C, Fracción D and Laguna De Los Capones ("CDL") licences, with a c.US$7 million saving to the previously estimated total for Tapi Aike alone. This saving is broadly in line with the gross cost of an exploration well on Tapi Aike and the early commencement of seismic acquisition will accelerate the likely spud date for a well on this extremely exciting frontier scale acreage. 

Looking ahead, I expect the level of activity seen in the first half of the year to continue throughout 2018. The test rig is currently in the CDL licence area completing the testing programme for the wells drilled during the exploration campaign and is also engaged in a pilot project of workovers in the Cañadon Salto Field to reinstate or increase production in four selected wells.

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.

I look forward to updating you on our progress throughout the remainder of 2018 and would like to thank all of our shareholders for their continued support. 
 
FIONA MACAULAY
CHIEF EXECUTIVE OFFICER