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Echo Energy sees 50% jump in annual gas revenue following two gas contracts wins
StockMarketWire.com
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Oil and gas company Echo Energy said it expected gas revenue to jump by as much as 40% after winning two new gas sales contracts at significant premiums to both prevailing spot market rates and 2020 contracted rates.
'We believe that as a result of these agreements, our contracted gas USD revenues for the year could be as much as 50 per cent higher when compared to May 2020 to April 2021, meaning they will deliver a material improvement in cashflow during 2021,' the company said.
Following the contract wins, a minimum of approximately 70% of gross daily gas production from Santa Cruz Sur allocated to industrial customers will now be committed under secured contracts until April 2022, the company said.
The contracts had a term of 12 months, with gas sales beginning in May 2021, providing for a 126% increase over annual industrial contract pricing previously achieved by the company in May 2020 and a 39% premium above current local spot price.
The contracts provided gross 6.5 MMscf/d of committed production, 4.6 MMscf/d net to Echo, at an average price of $2.64 per mmbtu, with 'the company able to elect to sell additional volumes of up to 1.9 MMscf/d net to Echo under the contracts, the company said.
At 10:02am: (LON:ECHO) Echo Energy Plc share price was 0p at 0.43p
Story provided by StockMarketWire.com
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