Echo Energy plc (LON:ECHO), the Latin American focused full cycle energy Company, has announced 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 agreement with GTL International S.A. 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.”
