Echo Energy (ECHO ) said the infrastructure of its Santa Cruz Sur assets has now been successfully commissioned for operation and shut-in wells are now being brought online.
The Latin American-focused upstream oil and gas firm has now installed the pipeline which was required to bring back online the liquids production which was shut back in April 2020.
The Group said this follows an upgrade of the electrical infrastructure, which was designed to support the first tranche of production from the Campo Molino and Chorillos oil fields to provide sufficient power to support sustained production from the associated ten wells.
The Company said there remains “further production upsides” within these assets in Argentina as it continues through the programme of reopening previously shut-in wells.
The upgrades are part of its strategy to control critical infrastructure previously rented from contractors. To date, the Campo Molino oil field has been brought back online with four of the shut-in wells now back in operation and producing from the Springhill reservoir, it said.
This first tranche of restored production will increase the number of active producing oil wells at Santa Cruz Sur to 18. As of 23 August 2021, the recently reactivated wells have contributed to an almost 50% rise in total liquids production at Santa Cruz Sur vs the period immediately prior to this (281 bopd gross, 197 bopd net to Echo from 1 -17 August 2021).
Echo said this represents an increase of 137 bopd gross, 95 bopd net to Echo and work continues to bring the remainder of the first tranche of shut-in production back online.
‘The production levels from the initial reactivated wells indicate that the shut-in period has not had a detrimental impact on reservoir behaviour in the Campo Molino oil field,’ it said.
Shares in Echo Energy were trading 5.36% higher during late morning at 0.59p.
Prior to the shut-in, the combined gross production from the ten oil wells was at around 138 bopd gross - that’s 96 bopd net to Echo Energy - approximately the same level now being achieved from the initial four wells, with the associated upgraded infrastructure.
Echo said daily operations at the Santa Cruz Sur asset base continues and that it is delivering produced gas to industrial customers under contract ‘with premium winter pricing.’
Production from 1 January to 23 August 2021 reached an aggregate of 381,243 boe net to Echo, which included 48,211 bbls of oil and condensate and 1,998 mmscf of gas, it stated.
Martin Hull, Chief Executive Officer of Echo Energy, commented: "During Q3 2021 we have continued to make significant operational progress and deliver against our objectives. Successfully increasing our liquids production is an important milestone.”
Hull added that, “Increased production combined with the continuing marked upswing in global commodity prices materially increases our cashflows enabling reinvestment to further drive growth. The ongoing production increases have been achieved while maintaining our careful cost management in order to maximise value for shareholders."
The assignment of Echo Energy'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.
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