Echo Energy : Statement re Oil Price Volatility

RNS Number : 3727G

Echo Energy PLC

17 March 2020

17 March 2020

Echo Energy plc

("Echo" or "the Company")

Statement re Oil Price Volatility

Echo Energy, the La n American focused upstream oil and gas company, provides the following update in rela on to the continued falls in global oil prices.

In the Company's operational and corporate update announced on 6 March 2020, Echo confirmed that in the context of the then prevailing global oil prices, the Company intended to put in place an addi onal unsecured standby credit facility, ini ally of £0.4m and up to £1.0m (the "Addi onal Facility"), to provide the Company with access to addi onal working capital in the short term, if required, including in the event of a con nued decline in oil demand driven by recent global events.

Since that announcement, and whilst the Company con nues to expect seasonal improvements in realised gas prices during March 2020 and into the Argen nian autumn and winter months, global oil prices have con nued to decline significantly.

The Company confirms that, prior to cost reduc ons, opera ons at the Santa Cruz Sur assets are not currently cash flow posi ve at prevailing oil and gas price levels. The Company's exis ng cash resources, even if supplemented by the proceeds of the Addi onal Facility, will not be sufficient to sustain opera ons at legacy Santa Cruz Sur cost levels beyond the short term.

As a result, the Company confirms that it is exploring all op ons available to it to preserve exis ng cash resources at a corporate level and, together with the operator of Santa Cruz Sur, has iden fied and priori sed a number of field opera ng cost reduc ons to seek to ensure that opera ons are sustainable at current commodity prices, no ng that gas prices are expected to con nue to increase in the coming winter period. Such ac ons could include a delay in the ongoing activities relating to the testing of the Campo Limite (CLix-1001) well at Palermo Aike.

The Company is aware of efforts from industry par cipants in Argen na, including regional authori es, service providers and energy producers to seek the introduc on of suppor ve measures to enable the con nued investment in, and smooth func oning of, the domes c Argen nian E&P industry. In the past such measures have included the stabilisation of domestic oil prices at levels in excess of international market pricing.

Further announcements will be made, as appropriate, in due course.

For further information, please contact:
Echo Energy	via Vigo Communications
Martin Hull, Chief Executive Officer
Vigo Communications (PR Advisor)	[phone]
Patrick d'Ancona
Chris McMahon
Cenkos Securities (Nominated Adviser)	[phone]
Ben Jeynes
Katy Birkin
Shore Capital (Corporate Broker)	[phone]
Jerry Keen

Note

The assignment of Echo's 70% non-operated par cipa on in the Santa Cruz Sur licences is subject to the authorisa on of the Executive Branch of Santa Cruz's Province, which is part of the overall process of title transfer that is proceeding as anticipated.

The informa on communicated within this announcement is deemed to cons tute inside informa on as s pulated under the Market Abuse Regula on (EU) No. 596/2014. Upon the publica on of this announcement, this inside information is now considered to be in the public domain.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] visit www.rns.com.

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