Echo Secures Favourable Argentine Gas Price
Echo Energy has signed a new sales contract for its Santa Cruz Sur assets onshore Argentina, it said January 6. The price is higher than the prevailing spot price. The new contract replaces one that expires this month and the buyer is "a key gas customer" – but it only lasts for four months.
The volume is about 1.4mn ft³/day/d gross, of which Echo's share is 1mn ft³. 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/mn Btu representing a significant 28% premium to the prevailing local spot price in the fourth quarter of 2020.
Echo said it continues to sell gas under a combination of secured contracts of up to a year in duration and spot sales and the result of the new contract is that now about 60% of daily gas production from Santa Cruz Sur is going at a significant premium to this quarter's spot price.
The execution of this new contract is in line with Echo's strategy to secure market leading pricing for its products in anticipation of increasing production pursuant to its future work programmes.
An NGW interview with Echo CEO Martin Hull conducted last month, where he explains the company's gas strategy, may be read here.