HUR.L Share News (HUR)

(Alliance News) - Hurricane Energy PLC on Friday reported its 205/21a-6 well in its Lancaster oilfield in its West Shetland portfolio is currently producing at 12,300 barrels of oil per day on artificial lift with an approximately 23% water cut.

This is a decrease from the average rate of 13,600 bopd in its third quarter reported by the Surrey-based oil and gas company in October. As a result, Hurricane Energy expects production between September 1 and December 31 to be within the previously announced 12,000 - 14,000 bopd guidance range.

Shares in Hurricane Energy were 29% at 2.98 pence in London on Friday.

The amount produced in the period was solely from the 205/21a-6 well, except for a short time of testing the 205/21a-7z well to assist in the refinement of the Lancaster reservoir simulation model, Hurricane Energy said.

Since September 11, the Lancaster field has been producing from one well alone, the 205/21a-6, which is exhibiting a limited decline in oil production rate accompanied by a limited increase in water cut.

In order to increase its production, Hurricane Energy said it has completed a remapping exercise to more accurately define the reservoir horizons in Lancaster and is considering a side-track to its existing 205/21a-7z well. Development costs are currently estimated at USD60 million, and subject to a sanction decision in the first quarter of 2021 and securing a suitable rig and equipment, the company said it estimates first production from the well should be possible by late 2021.

Chief Executive Antony Maris said: "We will now commence a period of stakeholder engagement to seek alignment on the merits of this further Lancaster activity and the support and approvals which may be required to execute this programme. While there can be no certainty as to the outcome of this engagement, we continue to believe there is significant value in Lancaster and our broader West of Shetland portfolio, and we remain focused on delivering that value for the benefit of our stakeholders."

By Zoe Wickens; zoewickens@alliancenews.com

Copyright 2020 Alliance News Limited. All Rights Reserved.