Echo Energy Canada Inc.
Listing: TSX Venture Exchange ("EEI.V")
Issued Common Shares: 60,208,086
TORONTO, Oct. 28 /CNW/ - Echo Energy Canada Inc. ("Echo") announced today that it is implementing significant cost savings measures in response to the recent declines in gas prices. The changes relating to cost sharing, staffing and delivery systems will help address financing issues and will improve liquidity and long term profitability.
A reorganization of administrative staff has resulted in significant reductions in costs of overheads. Charles Edey, President, has reduced his time and salary by 2/3. The Chief Financial Officer, Peter Pistor, has resigned as CFO and has assumed the role of Controller on a part time basis. Brian Monrad, VP Finance and Administration, has reduced his time and salary by 1/2 and assumed the duties of Chief Financial Officer.
Negotiations with Greentree Gas & Oil Ltd. regarding cost sharing and joint operations are proceeding well and are expected to result in significant reductions in the costs of operations.
The oversized compressor designed to handle 6 GJ/day of gas has been shut in. It was consuming over 10% of gas produced when handling less than 1 GJ/day. Arrangements have been made to deliver gas through the neighbouring Talisman pipeline over the next few months while we determine when to replace the oversized compressor with a 2 GJ/day compressor which will operate with a significantly lower parasitic load and lower costs. Net revenues should be maintained, as the lower volumes and prices while delivering through Talisman will be offset by reductions in parasitic load and compressor costs. Right-sizing the compressor will enhance long term profitability when the Company resumes deliveries through its own pipeline.
The changes relating to cost sharing, staffing and delivery systems have improved the prospects of obtaining new financing. The Company has made significant progress in arranging new financing through another financial institution, and the current debenture holder has indicated that they will allow another two months to enable alternate financing and further they will accept the payment of interest only while the negotiations with the new lender continue.
About Echo Energy Canada Inc.
Echo Energy Canada Inc. is a publicly traded energy company with revenue producing natural gas production operations near Port Burwell Ontario, Canada on the shores of Lake Erie.
Statements in this news release that are not historical facts, including statements about plans and expectations regarding properties, reserves, transactions and opportunities, capital resources and future financial results are forward-looking. Forward-looking statements involve risks and uncertainties, which may cause the Company's actual results in future periods to differ materially from those expressed. These uncertainties and risks include changing gas and commodity prices and currency exchange rates, demand for gas, lack of success of future exploration and development, competition and other factors discussed from time to time in the company's filings with the Ontario Securities Commission.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
SOURCE Echo Energy Canada Inc
For further information: For further information: Charles Edey, President, at 1-877-396-3540, firstname.lastname@example.org, http://www.echoenergycanada.com