Echo Energy (LSE:ECHO) released its final results for 2018 on Thursday revealing it achieved revenues of $8.84m during the period. The firm reiterated that it ended the year with a cash balance of $15.6m and total current- and non-current liabilities of $18.1m. The firm’s losses for the year totaled $23.96m with a sizeable $14.15m chunk a result of impairments relating to intangible assets. Despite an active drilling campaign that saw Echo drill four wells and subsequently test three, no commercial reserves were added and Echo has taken the decision to fully impair the value of the CDL assets.
The firm previously revealed in an operational update in March, that 2018 production net to Echo was 865 barrels of oil equivalent per day (boe/d) or 315,825 boe total for the year. The company is now firmly focussed on the Tapi Aike license with 3D seismic acquisition beginning in early 2019. Echo agreed to carry its partner, CGC, for 15pc of the work programme costs during the initial three year period and are committed to spending $7.9m on the acquisition of seismic data on the licence.
Echo is looking to drill 4 exploration wells as part of its initial work programme at Tapi Aike, with a first drill window opening from November 2019. The firm has sufficient cash to fund the Tapi Aike seismic acquisition programme, progress towards drilling and other working capital requirements. Beyond that the firm will need to raise additional funds. As it states in in its final results:
‘Whilst the directors remain acutely cost conscious and value focused, the Group recognises that in order to pursue organic and inorganic growth opportunities and fund on-going operations it will require additional funding, this may be sourced through debt finance, joint venture equity or share issues’