Argentina-Focused Echo Restructures Debt

Argentina-focused junior Echo Energy has restructured its €5mn ($6mn) debt facility and has also raised £0.7 ($0.9)mn in new funds, it said on December 1.

Echo, which has interests in five licence blocks in Argentina's Santa Cruz Sur area, has entered a deal with Lombard Odier Asset Management on the conditional restructuring of the facility, delaying its maturity date by three years until April 2025.

There will be no further cash interest repayments due before this date, as they will be instead added to the sum due at the end. This is unless the lender uses an option to receive interest in the form of ordinary shares in Echo from September 2021, at a 10% discount to the prevailing share price.

The principal debt facility will need to be repaid in five quarterly instalments of €600,000 starting in March 2024, with the remainder due at the maturity date. Lombard will also secure warrants for 74.2mn shares in Echo, actionable at a price of £0.03/share that expire at the maturity date, replacing warrants it had for the same amount of shares under different terms.

Echo also announced it had completed a £0.7mn fundraise through the issue of 233.3mn new shares, helping to build up its working capital resources. The company netted 1,990 barrels of oil equivalent/day of production from its 70% position at the Santa Cruz Sur fields in the year up to November 17, including 10.3mn ft³ of gas, it said.