Echo Weighs up Argentine Gas Project
Latin America-focused Echo Energy is considering development options for the Monte Aymond gas project in Argentina's Santa Cruz Sur region, including a pipeline link to infrastructure in neighbouring Chile and micro-LNG production.
Echo said on September 29 it had completed its initial assessment of the project, situated on the company's Palermo Aike licence west of its Campo Limite prospect. The plan is to work-over a well drilled in 1984 that discovered and test-flowed gas and condensate, achieving an initial flow rate of 2.4mn ft3/day and an average rate of 5mn ft3/d over 10 months of production.
That well was abandoned, although Echo believes that improved local infrastructure and prevailing gas prices now make Monte Aymond "an exciting commercial project." Echo and its partner Roch undertook a conceptual study last year on exporting Monte Aymond's gas via a 2.6-km flow line to processing facilities across the border in Chile. Doing so would require an investment of $570,000 with a payback period of three months, assuming average prices of $45/b for oil and $3.5/mn Btu for gas.
Echo has also begun studying micro-LNG production at Monte Aymond, which would enable the sale of gas to remote customers via truck at potentially higher prices. The company is also considering an alternative plan to develop Monte Aymond and Campo Limite together, with the aim of lowering costs.
Testing of the recently drilled CLix-1001 well at Campo Limite will be scheduled once Covid-19 travel restrictions in Argentina are eased, Echo said.
Echo CEO Martin Hull said the Monte Aymond project was of "great interest," given that it needs only limited amounts of capital and presents limited technical risk.
"Echo Energy is once again entering a phase of enhanced activity as we progress various workstreams to deliver maximum value from our existing portfolio with a balanced risk-reward ethos, ensuring prudent financial management while also keeping our options open to further opportunities in the region," he said.
"Success at Campo Limite has the potential to materially de-risk other projects in the Campo Limite area," he continued. "This may include follow-on exploration wells on other structures, appraisal and development wells, or bringing existing discoveries on stream as part of a larger gas commercialisation strategy for the Palermo Aike licence."
London-listed Echo acquired non-operated 70% stakes in Palermo Aike and four other mature blocks in the Santa Cruz Sur region from UK-based Phoenix Global Resources last November, for $7mn in cash and $1.5mn of shares. Roch operates the blocks with 30% interests.