# Echo Energy New gas contract at premium to prevailing spot pricing

- Link: https://www.directorstalkinterviews.com/echo-energy-new-gas-contract-at-premium-to-prevailing-spot-pricing/412948514
- Published: 2020-12-17T07:24:13+00:00
- Author: Giles

**[Echo Energy](https://www.directorstalkinterviews.com/company/echo-energy-plc/echo.l)
plc** ([LON:ECHO](https://www.directorstalkinterviews.com/company/echo-energy-plc/echo.l)),
the Latin American focused upstream oil and gas company, is pleased to provide a
commercial update regarding the Company’s gas sales from the producing Santa Cruz
Sur assets, onshore Argentina.

The Company has confirmed that it has secured a new contract at a premium to prevailing
spot market rates with a key gas customer for four months until end April 2021 pursuant
to which the Company will supply the customer with approximately 1.8 MMscf/d gross(
1.3 MMscf/d net to Echo) of natural gas. In the absence of the new contract these
volumes would have been sold to the spot market. The gas price under the contract
is a flat $2.00 per mmbtu representing a significant 26% premium to the prevailing
local spot price in November 2020.

Echo Energy continues to sell gas under a combination of secured contracts of up
to a year in duration and spot sales and the result of the new contract is that 
approximately 60% of daily gas production from Santa Cruz Sur, under current market
conditions, will be sold under secured contracts at significant premia to the current
spot price during Q1 2021.

The assignment of Echo Energy’s 70% non-operated participation in the Santa Cruz
Sur licences is subject to the authorisation of the Executive Branch of Santa Cruz’s
Province, which is part of the overall process of title transfer that is proceeding
as anticipated. Mmbtu means million British thermal units.

Share on: