James Parsons is looking to revive another moribund oil stock in the form of Echo Energy (ECHO:AIM). He has form, turning Sound Energy (SOU:AIM) from a micro-cap with a messy portfolio of assets and legacy of failure in South East Asia into a major force in the Mediterranean.
Now he's intent on transforming Echo (formerly Independent Resources). First announced in March, his plans for the business really got going in late April with a £23m cash injection from institutional investors. That was accompanied by a share consolidation, change of name and a new strategy to expand in the Latin American natural gas space, specifically targeting Bolivia, Colombia and Brazil. Parsons is in the chairman’s seat.
TRANSFORMATION GATHERS PACE
Unashamedly Echo will follow Sound's blueprint. Today, the process gathers pace as the group announces the appointment of Rockhopper (RKH:AIM) chief operating officer Fiona MacAuley as its new CEO. Parsons, who chairs the South American focused company, also unveils former BG man Julian Bessa as vice president of exploration. The news generates some excitement with the share rising 12% to 17.5p.
MacAuley was central to the Sea Lion project where several discoveries have been made off the coast of the Falkland Islands.
Bessa was BG’s vice president of exploration Brazil. BG’s large Brazilian deep-water discoveries were a key part of the company’s appeal to Royal Dutch Shell (RDSB) before its multi-billion pound takeover in 2016.
The company has £26m at its disposal and further access to capital if required to execute on its acquisitive strategy.
WHAT'S GOING ON WITH SOUND
There’s no let up for Parsons in his other role as chief executive of Sound. In an update on its current operations the company says it is commencing a re-entry on the Koba-1 well on its Sidi Moktar project in Morocco and continues drilling on its key Badile prospect in Italy.
The shares dip 1.7% to 65.8p despite this update and Cantor Fitzgerald analyst Sam Wahab says: ‘With a number of drilling catalysts in the short term, supported by a robust financial position, and a funded 2017/18 drilling campaign, we see Sound's current share price as representing a compelling entry point for investors. We therefore reiterate our BUY rating and 76p TP.’