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 is pleased to confirm that it has secured a further gas sales contract at a premium to prevailing spot market rates. This new contract, for volumes which had previously been supplied to another party under a gas sales contract expiring in early January 2021, is with a key gas customer for four months until end April 2021 pursuant to which the Company will supply the customer with approximately 1.4 MMscf/d gross (1.0 MMscf/d net to Echo) of natural gas. In the absence of the new contract these volumes would have been sold to the spot market.
The gas price under the contract is a flat $2.00 per mmbtu representing a significant 28% premium to the prevailing local spot price in the fourth quarter of 2020.
The Company continues to sell gas under a combination for secured contracts of up to a year in duration and spot sales and the result of the new contract is that approximately 60% of daily gas production from Santa Cruz Sur, under current market conditions, continues be sold under secured contracts at significant premia to the current spot price during Q1 2021.
The execution of this new contract is in line with the Company’s strategy to secure market leading pricing for its products in anticipation of increasing production pursuant to its future work programmes.
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. 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. Upon the publication of this announcement, this inside information is now considered to be in the public domain.
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