25 May, 2018 – Echo Energy plc (AIM: ECHO), the South and Central American focused upstream gas company, today announces a successful conditional placing and subscription (the “Placing”) to raise £8.5 million, before expenses, through the issue of 71,185,447 new ordinary shares in the Company (“Ordinary Shares”) at a placing price of 12.0 pence per Ordinary Share (the “Placing Price”).
Since the Company’s acquisition of its Argentinian portfolio and re-admission to AIM in January 2018, the Company has initiated a busy 2018 Argentinian work programme and to date the Company and its partner Compañía General de Combustibles S.A. (“CGC”), operator of the assets, have successfully completed the workover of three existing wells at Fracción D and commenced a back-to-back four exploration well drilling campaign at Fracción C and Laguna Los Capones. As announced on 18 May 2018, the drilling of the first exploration well at Fracción C, ELM-1004, has been successfully completed.
Given the early successes of the Argentinian work programme and the attractive domestic contractor rates available to the Company at the current time, the Company and its Argentinian partner wish to accelerate their commitment to the already planned 2,000 square kilometre seismic acquisition campaign over the Tapi Aike asset (the “Full Tapi Aike Seismic Programme”) to secure favourable current pricing terms. The Board expects that committing to Full Tapi Aike Seismic Programme at currently available terms would result in cost savings to the Company in excess of US$7 million over the previously expected costs over the course of the programme at Tapi Aike. The net proceeds of the Placing will be sufficient to enable the Company to commit to the Full Tapi Aike Seismic Programme and related costs.
As a result, the net proceeds of the Placing will be applied towards the Company’s proposed increased short term commitments in relation to the Full Tapi Aike Seismic Programme and towards the Company’s general working capital requirements.
· The Company has conditionally raised £8.5 million through the issue of new Ordinary Shares at the Placing Price.
· The Placing Price is 12.0 pence per Ordinary Share.
· The Placing Price represents: (i) a discount of 14.8 per cent. to the volume weighted average price per Ordinary Share for the 30 days ended 24 May 2018 of 14.07 pence per Ordinary Share; (ii) a discount of 31.4 per cent. to the Echo placing price of 17.5 pence per Ordinary Share at the time of the Company’s re-admission to AIM in January 2018; and (iii) a discount of 17.2 to the closing mid-market price per Ordinary Share on 24 May 2018, being the latest practicable date prior to the publication of this announcement.
· The Placing consists of: (i) a placing by Pareto Securities Limited (“Pareto”) of 38,710,448 new Ordinary shares with institutional investors at the Placing Price; and (ii) subscriptions for 32,474,999 new Ordinary Shares with certain other investors at the Placing Price.
· Net proceeds of the Placing will be used to fund the Company’s proposed increased short term commitments in relation to an accelerated seismic acquisition campaign over the Company’s Tapi Aike asset following early success in the Argentinian work programme and the Company’s general working capital requirements.
The Placing has been conducted in accordance with the terms and conditions set out in the Appendix to this announcement. The Appendix to this announcement (which forms part of this announcement) sets out the terms and conditions of the Placing.
Full announcement at https://www.echoenergyplc.com