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Echo Energy PLC (ECHO) – Further re Issue of Warrants

Echo Energy, the Latin American-focused full cycle energy company, announced on 22 December 2020 that, in connection with a subscription and warrant issue then announced, the issue of 83,921,568 warrants to subscribe for new ordinary shares in the Company would be subject to receipt of share issuance authorities.

As a result of the Company having sufficient share issuance authorities to allow the issue of the Warrants ahead of the Company’s 2021 annual general meeting, the Board has now issued the Warrants. The Warrants expire two years after the date of issue, with 50% of the Warrants exerciseable at 0.7 pence per new ordinary share and 50% of the Warrants exerciseable at 0.75 pence per new ordinary share.

For further information, please contact:

Echo Energy

Martin Hull, Chief Executive Officer

via Vigo Communications

Vigo Communications (PR Advisor)

Patrick d’Ancona

Chris McMahon

+44 (0) 20 7390 0230

Cenkos Securities (Nominated Adviser)

Ben Jeynes

Katy Birkin

+44 (0) 20 7397 8900

Shore Capital (Corporate Broker)

Jerry Keen

+44 (0) 20 7408 4090

Echo Energy Plc #ECHO – Argentina: VAT Update

Argentina: VAT Update

Echo Energy, the Latin American focussed energy company, is pleased to provide an update on the  Argentine value added tax (“VAT) reclaim process, and the successful monetisation of a further proportion of the Argentine VAT owed to the Company.

Disbursements totalling Ars$ 48.4 million (approximately US$ 0.5 million), consisting of Ars$ 33.1 million plus interest of Ars$ 15.3 million of PP&E VAT owed to Eco Energy TA Op Limited (the “Subsidiary”), the Company’s subsidiary which holds a 25% interest in the Santa Cruz Sur assets (of Echo’s total 70% interest), have now been received. This cash payment demonstrates the continuing successful processing of VAT refunds owed to the Company by the Argentine authority, AFIP, as it resumes normal activity following months of COVID – 19 related shut down.

Following these most recent disbursements, historical reclaims regarding VAT owed to the Echo group  related to operations at Santa Cruz Sur totalling approximately US$0.7 million remain in progress.

The Company is also pleased to announce that the 2020 PP&E VAT claim of Ars$ 54.8 million (approximately US$ 0.6 million) for Eco Energy TA Op Limited has been accepted by the Argentine VAT office.  The Company’s subsidiary, Eco Energy CDL Op Ltd, which holds Echo’s remaining 45% interest in Santa Cruz Sur, has also had its 2020 PP&E VAT claim of Ars$ 8.1 million approved. Further processing of these claims will now take place ahead of future expected reimbursement.

The Argentine VAT office has also separately now approved the Free VAT application Eco Energy CDL Op Ltd of Ars$ 9.5 million and Echo have completed a sale of this VAT credit in exchange for cash.

The unlocking of the Argentine VAT refund process is, and is expected to continue, to provide material cash funds in the coming months and provides further evidence of the normalisation of in country activities following delays in 2020 caused by COVID 19 restrictions.

For further information, please contact:

Echo Energy

Martin Hull, Chief Executive Officer

via Vigo Communications

Vigo Communications (PR Advisor)

Patrick d’Ancona

Chris McMahon

+44 (0) 20 7390 0230

Cenkos Securities (Nominated Adviser)

Ben Jeynes

Katy Birkin

+44 (0) 20 7397 8900

Shore Capital (Corporate Broker)

Jerry Keen

+44 (0) 20 7408 4090

Echo Energy plc (ECHO) – Final results

Final Results

Echo Energy plc, the Latin American focused full cycle energy Company, is pleased to announce its audited results for the financial year ended 31 December 2020.

2020 Highlights:

  • Fourfold increase in revenue to US $11.1 million (2019: US $2.6 million)
  • Favourable fiscal environment have led to the receipt of certain VAT payments, improving business cashflow.
  • Santa Cruz Sur net daily production in 2020 totalled 1,966 boepd:
    • 10.2 mmscf/d of natural gas
    • 259 bbls/d of oil and condensate
  • In 2020, Echo’s net cumulative production was 0.72 MMboe:
    • 3,750 mmscf of natural gas
    • 94,693 bbls oil and condensate
  • Company estimated reserves and resources as at 31 December 2020 net to Echo’s 70% interest:
    • 1P (Proved): 3.13 MMBoe
    • 2P (Proved & Probable): 4.06 MMboe
    • Contingent Resources (High estimate): 7.20 MMboe (Best estimate 6.51 MMboe)
  •   Adapted swiftly during the period to challenges presented by COVID-19, reorganisation along value chains enabled Echo to lower operating costs and improve efficiencies

Post period end

  • Company successfully completed the restructuring of both the Company’s EUR 20.0m 8.0% secured notes and the Company’s EUR 5.0m 8.0% secured convertible debt facility loan. This represented a landmark step for the business by materially improving the financial outlook through the deferral of maturity until Q2 2025 and no cash interest payments prior to the maturity date. The agreement, with the support of the debt holders not only substantially strengthens the balance sheet it enables for the reinvestment of cashflow into the business to drive further growth.
  • Secured new gas sales contracts at premium rates to the prevailing spot markets in early Q1 2021.
  • Echo entered into a cooperation agreementwith GTL International S.A. (“GTLI”) to seek future opportunities in Bolivia.

Martin Hull, Echo’s Chief Executive, commented:

“Echo’s resilience during a very challenging year has ensured that we have been able to continue our operations efficiently and build firm foundations commercially and operationally despite the difficult external conditions. Not only have we made significant cost-saving efforts across the Company and rebalanced our financial position to provide increased flexibility, but we have also achieved tremendous operational progress across our SCS assets where we currently benefit from a favourable fiscal environment and attractive gas sales agreements with key customers. Moving forward, we are excited by the continuing expansion opportunities at our SCS assets, where we aim to maximise production potential, and we are also encouraged by the potential for new hydrocarbon and/or renewable energy prospects in neighbouring Bolivia and elsewhere in the Region. The framework for 2021 and beyond has now been set in place, and we look forward to capitalising on our various growth catalysts.”

 

For further information, please contact:

Echo Energy

Martin Hull, Chief Executive Officer

 

via Vigo Communications
Vigo Communications (PR Advisor)

Patrick d’Ancona

Chris McMahon

 

+44 (0) 20 7390 0230
Cenkos Securities (Nominated Adviser)

Ben Jeynes

Katy Birkin

 

+44 (0) 20 7397 8900
Shore Capital (Corporate Broker)

Jerry Keen

+44 (0) 20 7408 4090

 

Link to the full announcement and statements here.

Echo Energy #ECHO – Operational and Commercial Update Q1 2021

Echo Energy, the Latin American focused upstream oil and gas company, is pleased to provide an operational and commercial update regarding its Santa Cruz Sur assets, onshore Argentina, for the quarterly period ended 31 March 2021.

Operational Update

Daily operations in the field at Santa Cruz Sur continue with the delivery of produced gas to customers as expected and without interruption. Production over the period from 1 January 2021 to 31 March 2021 reached an aggregate of 152,673 boe net to Echo, which included 17,814 bbls of oil and condensate and 809 mmscf of gas.

As a result of a series of optimisation activities being implemented in the field around the current production, average net daily liquids production in March 2021 increased to 230 bbls/d, a 24% increase over production in February 2021.

The Company is pleased to confirm that the materials required for the infrastructure upgrades of 23 km of pipeline, announced on 24 February 2021, are now being fabricated by the supplier in Buenos Aires following contract execution and the installation schedule remains in line with that announcement.

Commercial Update

Domestic energy demand in Argentina has continued to improve through 2021 to date and the Company has recently sold a significant domestic cargo of 8,812 bbls of oil net to Echo, at the Punta Loyola terminal, with a price linked to the Brent benchmark subject to typical local discount. Following this sale, net oil stock at the Punta Loyola terminal (excluding inventory in field tanks) is currently 4,237 bbls.

Following the Company’s announcement of 24 March 2021, relating to new gas sales contracts for 2021-2022, the Company has now agreed summer and winter pricing for its annual industrial clients, with the contracted winter premium providing substantially increased cashflow in the near term for future operations and production enhancement work programmes. For the committed production over the key southern winter period (May to September), the Company will sell natural gas at an average price of $3.52 per mmbtu, which compares to $1.35 per mmbtu for industrial clients the previous year.

Martin Hull, Chief Executive Officer of Echo Energy, commented:

“Advancing into 2021, Echo has been set on optimising its existing production portfolio and low-risk development upside across the Santa Cruz Sur asset base. The benefits of these earlier efforts are now being seen. Additionally, I am pleased to report that Echo continues to benefit from increasingly strong local energy demand and pricing, which has led us to obtaining premium seasonal pricing to current prevailing spot market prices, and more than double the price of the previous winter period. Against this improving domestic energy price backdrop, we have also executed a significant domestic oil cargo sale which marks an important milestone linked to the improved economic outlook.

Furthermore, we are pleased with the progress we are making on our production optimisation activities across Santa Cruz Sur. Liquids production has recently increased in advance of the upgrades to the 23 km pipeline infrastructure which are progressing at pace. These upgrades will not only unlock previously shut-in liquids production but will also provide additional capacity with which to open up future incremental enhancement projects that have already been identified.”  

For further information, please contact:

Echo Energy

Martin Hull, Chief Executive Officer

 

via Vigo Communications
Vigo Communications (PR Advisor)

Patrick d’Ancona

Chris McMahon

 

+44 (0) 20 7390 0230
Cenkos Securities (Nominated Adviser)

Ben Jeynes

Katy Birkin

 

+44 (0) 20 7397 8900
Shore Capital (Corporate Broker)

Jerry Keen

+44 (0) 20 7408 4090

Note

The assignment of Echo’s 70% non-operated participation in the Santa Cruz Sur licences is subject to the authorisation of the Executive Branch of Santa Cruz’s Province, which is part of the overall process of title transfer that is proceeding as anticipated. boe means barrels of oil equivalent; bbl/d means barrels of oil per day; boepd means barrels of oil equivalent per day; MMscf mean million standard cubic feet of gas; MMscf/d means million standard cubic feet of gas per day.

Certain of the information contained within this announcement is deemed by the Company to constitute inside information as stipulated under The Market Abuse Regulation (EU 596/2014) pursuant to the Market Abuse (Amendment) (EU Exit) Regulations 2018. Upon the publication of this announcement via a Regulatory Information Service (“RIS”), this inside information is now considered to be in the public domain.

Echo Energy #ECHO – Successful Completion of Debt Restructuring & TVR

Echo Energy, the Latin American focused upstream oil and gas company, is delighted to announce that at the adjourned meeting of the holders of the Company’s Luxembourg listed EUR 20.0m 8.0% secured notes (the “Notes”) held earlier today (the “Noteholder Meeting”) to consider the Company’s proposals for the restructuring of the Notes (the “Proposals”), the Proposals were duly approved by the requisite majority.

At the Noteholder Meeting voting instructions representing EUR 12.5m of the Notes were lodged by holders of the Notes (“Noteholders”) with 84 per cent. of votes cast in favour of the Proposals. As a result:

  • Maturity of the Notes will be extended by three years to 15 May 2025 (the “Maturity Date”); and 
  • All cash interest payments on the Notes rolled to the Maturity Date.

Further details of the Proposals were set out in the Company’s announcement of 22 February 2021.

As a result of Noteholder approval of the Proposals, the previously announced conditional restructuring of the Company’s EUR 5.0m 8.0% secured convertible debt facility (the “Debt Facility”), details of which were announced by the Company on 1 December 2020, will now also become effective.

The restructuring of the Debt Facility will, inter alia, see its final maturity extended to April 2025, with no further cash interest payments required prior to final maturity.

Martin Hull, Echo’s Chief Executive Officer, commented:

“I am delighted that Echo has now successfully completed the restructuring of its debt obligations.  The new arrangements result in no cash payments to Noteholders until maturity in 2025.  This enables the Board to focus on rapidly delivering on its strategy to improve shareholder returns.  

Commodity price strength, including the very material increases in gas price recently announced, combined with the more than doubling of oil production following the ongoing infrastructure upgrades, provide a markedly improved and positive outlook for shareholders.

This is a landmark moment for Echo and I am confident that we can now drive forward and reward shareholders in the future.”

With the Proposals approved by Noteholders, the Company will issue a total of 11,473,929 new ordinary shares in the Company (representing c.0.9% of the Company’s current issued ordinary share capital) to Noteholders pro rata to their voting instructions cast in favour of the Proposals at the Noteholder meeting (the “New Ordinary Shares”).

Application has been made for the 11,473,929 New Ordinary Shares to be admitted to trading on AIM (“Admission”) and it is expected that Admission will occur at 8.00 a.m. on or around 1 April 2021. Following Admission of the New Ordinary Shares, the Company’s issued ordinary share capital will comprise 1,219,367,987 Ordinary Shares, none of which are held in treasury.

Therefore, following Admission of the New Ordinary Shares, the total number of Ordinary Shares with voting rights in the Company will be 1,219,367,987, which may be used by Shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the Financial Conduct Authority’s Disclosure Guidance and Transparency Rules.

For further information, please contact:

Echo Energy

Martin Hull, Chief Executive Officer

via Vigo Communications

Vigo Communications (PR Advisor)

Patrick d’Ancona

Chris McMahon

+44 (0) 20 7390 0230

Cenkos Securities (Nominated Adviser)

Ben Jeynes

Katy Birkin

+44 (0) 20 7397 8900

Shore Capital (Corporate Broker)

Jerry Keen

+44 (0) 20 7408 4090

Echo Energy #ECHO – New gas contract wins for 2021-2022 significantly above 2020 annual pricing and current spot price

Echo Energy, the Latin American focused upstream oil and gas company, is pleased to provide a commercial update regarding the Company’s gas sales from the producing Santa Cruz Sur assets, onshore Argentina.

The Company confirms that, following a successful auction process for industrial clients, it has secured two new gas sales contracts at significant premiums to both prevailing spot market rates and 2020 contracted rates (the “Contracts”).

The Contracts have a term of 12 months, with gas  sales beginning in May 2021, and provide for a 126% increase over annual industrial contract pricing previously achieved by the Company in May 2020 and a 39% premium above current local spot price.

The Contracts provide gross 6.5 MMscf/d of committed production, 4.6 MMscf/d net to Echo, at an average price of $2.64 per mmbtu, with the Company able to elect to sell additional volumes of up to 1.9 MMscf/d net to Echo under the Contracts. This optionality, at the election of the Santa Cruz Sur partners, provides flexibility to respond to market conditions including rising spot prices.

As a result of the Contracts, a minimum of approximately 70% of gross daily gas production from Santa Cruz Sur allocated to industrial customers will now be committed under secured contracts until April 2022.

Martin Hull, Chief Executive Officer of Echo Energy, commented:

We have previously commented on the improving market conditions for our business as commodity prices increase, and the Company’s ability to secure  these new contracts with industrial customers via a competitive auction process reflects the increasingly supportive commercial environment. It is encouraging to now go further and see the improved market conditions translate to tangible improvements in future revenue We believe that as a result of these agreements, our contracted gas USD revenues for the year could be as much as [50] per cent higher when compared to May 2020 to April 2021, meaning they will deliver a material improvement in cashflow during 2021. We continue to pursue an innovative and flexible commercial strategy, enabling Echo to secure this type of premium pricing. These contracts also confirm that the Company is viewed as a reliable and attractive supplier to the Argentine industrial sector, and can achieve strong pricing for our output.”

For further information, please contact:

 

Echo Energy

Martin Hull, Chief Executive Officer

 

via Vigo Communications
Vigo Communications (PR Advisor)

Patrick d’Ancona

Chris McMahon

 

+44 (0) 20 7390 0230
Cenkos Securities (Nominated Adviser)

Ben Jeynes

Katy Birkin

 

+44 (0) 20 7397 8900
Shore Capital (Corporate Broker)

Jerry Keen

+44 (0) 20 7408 4090

Note 

The assignment of Echo’s 70% non-operated participation in the Santa Cruz Sur licences is subject to the authorisation of the Executive Branch of Santa Cruz’s Province, which is part of the overall process of title transfer that is proceeding as anticipated. MMscf/d means million standard cubic feet of gas per day; and Mmbtu means million British thermal units.

The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014 as amended by the Market Abuse (Amendment) (EU Exit) Regulations 2019/310. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

Echo Energy #ECHO – Noteholder Meeting Results – 84% vote in favour

Echo Energy, the Latin American focused upstream oil and gas company, announces the results of the meeting of the holders of the Company’s Luxembourg listed EUR 20.0m 8.0% secured notes (the “Notes”) held earlier today (the “Noteholder Meeting”) to consider the Company’s proposals for the restructuring of the Notes (the “Proposals”).

Voting instructions representing EUR 12.5m of the Notes were lodged by holders of the Notes (“Noteholders”) with 84 per cent. of votes cast in favour of the Proposals.

With votes representing 62.5 per cent. of the aggregate principal amount of the outstanding Notes  cast, the Noteholder Meeting was therefore adjourned for want of the necessary quorum and an adjourned Noteholder Meeting, to consider the Proposals in unchanged form, will now be held at 10.00 a.m. on 30 March 2021 (the “Adjourned Noteholder Meeting”).

The Adjourned Noteholder Meeting will require a reduced quorum of 25 per cent. of the aggregate principal amount of the outstanding Notes, being considerably lower than the 75 per cent. of the aggregate principal amount of the outstanding Notes that had been required for the Noteholder Meeting.

Voting instructions already lodged by Noteholders remain valid for the Adjourned Noteholder Meeting and the relevant Noteholders need take no further action to be represented at the Adjourned Noteholder Meeting.

In the event that current votes remain unchanged at the Adjourned Noteholder Meeting, the restructuring of the Notes would be approved as proposed by the Company.

A circular providing Noteholders with notice of the Adjourned Noteholder Meeting will be sent to Noteholders later today and will be available from the Company’s website at www.echoenergyplc.com shortly thereafter.

For further information, please contact:

Echo Energy

Martin Hull, Chief Executive Officer

via Vigo Communications

Vigo Communications (PR Advisor)

Patrick d’Ancona

Chris McMahon

+44 (0) 20 7390 0230

Cenkos Securities (Nominated Adviser)

Ben Jeynes

Katy Birkin

+44 (0) 20 7397 8900

Shore Capital (Corporate Broker)

Jerry Keen

+44 (0) 20 7408 4090

Note

The information communicated within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement, this inside information is now considered to be in the public domain.

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