(Alliance News) - Hurricane Energy PLC shares were rising on Thursday after it reported a swing to an interim profit.
"The first six months of 2021 have proved very challenging. The focus has been on exploring ways to provide a stable financial platform for the company, whilst in parallel delivering production as safely and efficiently as possible from Lancaster," Chief Executive Antony Maris said of Hurricane's field offshore west of Shetland.
Shares in the Godalming, Surrey-based oil exploration and production company were 14% higher in London on Thursday at 4.70 pence each. The stock is up 88% so far in 2021, though well down from its 2017 peak of 64.00p.
In the six months to June 30, Hurricane swung to pretax profit of USD42.9 million from a loss of USD258.5 million a year prior.
The improvement was driven by a USD49.1 million gain on revision of lease term, while it recorded no hit from oil and gas assets impairment after an impairment of USD238.9 million a year ago.
Revenue improved by 52% to USD124.5 million from USD81.9 million.
Hurricane generated USD75.9 million of operating cash flow in the first half, up sharply from USD21.9 million the year before.
During the first half, its Lancaster field production averaged 11,100 barrels oil per day, down from 14,600 bopd a year before. It noted the 205/21a-7z well was shut in to manage reservoir voidage and pressure decline
"Recent stronger oil prices combined with the impact of the bond buyback, internal cost cutting, and other cost reduction measures, has brought the possibility of bridging the funding gap for the repayment of the bonds within reach. However, the challenge of funding investment in our assets remains," CEO Maris said.
Looking ahead, Hurricane continues to guide for production in the second half of 8,500 barrels of oil per day to 10,000 barrels.
"Going forward our near-term priority remains the repayment of our convertible bonds, and as such we move into the second half of the year with an overarching focus on capital discipline and operational performance. We are optimistic that, despite the economic and operational uncertainties that exist, even if a shortfall remains it may be possible to find a solution to repay the bond in full at maturity," Maris added.
Hurricane completed the repurchase of about 34% of its outstanding USD230 million 7.5% convertible bonds due in July 2022 at a cost of USD62 million, reducing the par value of the bonds held by third parties to USD152 million.
Hurricane also said on Thursday it has hired Philip Wolfe as non-executive director, with immediate effect. He was previously CEO of AIM-listed Phoenix Global Resources PLC.
By Paul McGowan; paulmcgowan@alliancenews.com
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