new-recommended-broker-banner new-recommended-broker-banner
Practice Stock Trading Your capital is at risk

Echo Energy Shares Are Down 53.7% From Their April Highs, Can They Recover?

Updated: 27 May 2021

Shares of Echo Energy PLC (LON: ECHO) are down 53.7% from their April 1st highs, and many are wondering whether the company’s shares can recover and post some gains in future.

The company’s shares are trading near a support zone that could relieve shareholders if buyers step in and push prices higher in the near term.

Investors appear disillusioned with the Latin America focused oil and gas firm despite taking substantial steps to secure its future.

Echo Energy completed the restructuring of its debt obligations worth €25 million with the maturity of its €20 million 8% secured notes, listed in Luxembourg, extended to 15th of May 2025 with no interest payments before the maturity date.

The maturity of the remaining €5 million 8.0% secured convertible debt facility was also extended to April 2025.

Echo Energy's upbeat full-year 2020 financial results were largely ignored by the markets, given the brief spike in its shares price quickly reversed as the bears took over, pushing prices lower.

The oil company’s CEO Martin Hull noted that the debt restructuring would allow the board “to focus on rapidly delivering its strategy to improve shareholder returns.”

Martin noted that the recently announced increase in gas prices combined with the doubling of oil production at its Santa Cruz Sur project in Argentina bodes well for its future earnings.

Investors have wholly ignored Echo Energy’s positive announcements in the past, which does not inspire confidence in a potential rally.

From a technical perspective, we could get a rally from the current support level. However, nothing is guaranteed in the markets, and we could see the price break below the 0.84p support level bringing the 0.54p support zone into focus.

*This is not investment advice.

Echo Energy share price.

IG chart of Echo Energy share price 27-05-2021
Source: IG

Echo Energy shares are down 53.72% from their April high of 1.88p to their current price of 0.87p.

Should you invest in Echo Energy shares?

Echo Energy shares are traded on the London stock exchange's AIM market (the alternative investment market), which is the submarket specifically for smaller companies. AIM stocks are attractive to investors as they have tax advantages and smaller companies have the potential to benefit from rapid growth. But are Echo Energy shares the best buy? Our stock market analysts regularly review the market and share their picks for high growth companies

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage . 75 % of retail investor accounts lose money when trading CFDs with this provider . You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money .