LONDON (ShareCast) - (ShareCast News) - Echo Energy confirmed the signature of its first transaction in Bolivia on Wednesday, following its recently-announced onshore gas strategy across Latin America.
The AIM-traded company said it signed a binding joint evaluation agreement with Pluspetrol Bolivia Corporation, which positioned the company to secure an 80% operated interest in the Huayco block in Southern Bolivia.

It said the Huayco block lies within the Tarija Basin, benefits from full 3D seismic coverage, with the company internally estimating that it has "significant" multi-Tcf gas potential.

The block spans 75 square kilometres and lies close to key export gas pipeline infrastructure which would connect any discovery to high value gas markets in Brazil and Argentina.

Echo said the agreement would commence with a technical evaluation, after which - subject to the usual regulatory approvals - Echo would take an 80% operated position.

Whilst Echo would pay 100% of the first well - and 80% of the wells thereafter - the evaluation agreement only committed Echo to fund the agreed technical studies, and as such no back costs or consideration was payable.

Both companies were said to view the deal as the start of a longer-term partnership in which other potential opportunities could be explored in country.

The company also confirmed on Wednesday that it was "close" to securing other exploration and production assets in the region, which would be subject to separate announcements.

"We are delighted to reveal our first transaction in Bolivia as part of our recently announced Latin American upstream gas strategy," said chairman James Parsons.

"We are confident in the multi Tcf scale and technical quality of this acreage and believe it will also be of interest to strategic partners in due course."

Parsons said Echo understood the strategic value of establishing relationships with key regional industry participants, and saw Pluspetrol as a long-term partnership across the region, which could assist Echo whilst it built its operating capability.

"This initial move also demonstrates our ability to move quickly in securing access to world class assets as we build a broad exploration portfolio in the gas hungry Central and South American region.

"The transaction comes quickly after our recent appointment of senior members of our new executive team, and I am very pleased that we are continuing to build momentum."

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