Echo Energy upbeat after signing of technical evaluation agreement at Rio Salado

South and Central America-focussed upstream gas company Echo Energy announced the signature of a technical evaluation agreement (TEA) for the Rio Salado Block, onshore Bolivia on Wednesday.

The AIM-traded firm said the TEA between itself, Pluspetrol and YPFB (Yacimientos Petrolíferos Fiscales Bolivianos) was signed on 25 July 2017 at the YPFB 2017 Gas & Oil Congress in Santa Cruz, Bolivia.

It said the agreement would enable the companies to progress a technical evaluation of the block over the next 12 months.

On completion of the technical evaluation, the companies would have the opportunity to negotiate a commercial agreement with YPFB which would define a work programme, and was reportedly likely to include the drilling of an exploration well.

“We are delighted to announce the signature of the technical evaluation agreement, further strengthening our relationship with our partner Pluspetrol and YPFB, the state oil company in Bolivia,” said chief executive Fiona MacAulay.

“This agreement enables the company to evaluate the highly prospective and potentially multi TCF exploration area which extends around the Huayco block.”

Echo said the Rio Salado Block, which surrounds the Huyaco Block, contains an extension of the structure previously identified by the company.

As a result, the firm;s seismic reprocessing programme for the Huayco Block would now be extended to incorporate additional data over the Rio Salado acreage for a minimal incremental cost over the greater Huayco area.

The acquisition of an interest by Echo Energy in Rio Salado remained contingent on final commercial terms being agreed, and accordingly the company confirmed it does not have an interest or the right to acquire any interest at this stage during the non-exclusive evaluation period.

“This is the second of many pre-identified strategic transactions in Bolivia demonstrating Echo's ability to move quickly and deliver on its stated strategy,” Fiona MacAulay added.

“This is an exciting time for the Company and I look forward to updating the market in due course.”