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.
Echo Energy shares are down 53.72% from their April high of 1.88p to their current price of 0.87p.
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Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading