17 Dec 2021 18:30
17 December 2021
Hurricane Energy plc
("Hurricane" or the "Company")
Greater Warwick Area Update
Hurricane Energy plc, the UK based oil and gas company, provides an update on its activities in the Greater Warwick Area ("GWA").
As announced on 14 October 2021, the GWA Joint Venture ("JV") has been engaging with the Oil & Gas Authority (the "OGA") on the technical re-evaluation and interpretation of the GWA licence potential, and requesting a regulatory amendment of the obligation to drill a well on the P1368(S) Lincoln licence, which must be commenced on or before 30 June 2022, to a later commencement date. The OGA has indicated, as part of its considerations, that it is not content to support a deferral of the obligation well unless the GWA JV partners satisfy the OGA that they will be able to fund an obligation well in a timely manner.
In parallel with these discussions with the OGA, the Company has been exploring options to realise value for its equity share of the GWA assets, including through third party funding for the drilling of the Lincoln obligation well. To date, discussions with external parties have not resulted in formalising any interest to secure third party investment in the GWA assets.
The Company notes the announcements on 8 December 2020 by Spirit Energy and its largest shareholder, Centrica plc, regarding the strategic focus of its remaining UK assets and the limitation of any further investment in exploration and appraisal.
Following discussions within the JV, the GWA JV has elected to continue its plans to suspend further funding towards well planning and drilling of the obligation well on Lincoln in 2022. However, funds continue to be made available in 2022 to promote the area's prospectively.
Given both the Company's financial circumstances and the related challenges of securing additional funding for the Lincoln obligation well, the Company currently believes there is a reasonable prospect that, unless the Company can secure an alternative source of funds, the GWA JV will be unable to either drill the obligation well in 2022 or to obtain a deferral of the obligation well. As such, it is reasonably probable that the P1368(S) licence sub area will be relinquished on or before 30 June 2022.
In the event that the P1368(S) licence sub area is relinquished, the carrying value of the Lincoln asset in the Company's accounts of c.$54 million would be impaired and a non-cash impairment charge recognised.
The Company will continue to actively explore potential options over the coming months to retain the P1368(S) Lincoln Licence. Further updates will be provided in due course.
-ends-
Contacts:
Hurricane Energy plc Antony Maris, Chief Executive Officer communications@hurricaneenergy.com
| +44 (0)1483 862820 |
Stifel Nicolaus Europe Limited Nominated Adviser & Joint Corporate Broker Callum Stewart / Jason Grossman
| +44 (0)20 7710 7600 |
Investec Bank plc Joint Corporate Broker Chris Sim / Jarrett Silver | +44 (0)20 7597 5970 |
Vigo Consulting Public Relations Patrick d'Ancona / Ben Simons hurricane@vigoconsulting.com
| +44 (0)20 7390 0230 |
About Hurricane
Hurricane has a 100% interest in and operates the Lancaster field, the UK's first field to produce from a fractured basement reservoir.
Hurricane also has a 50% interest in the Greater Warwick Area licence, which contains the Lincoln and Warwick assets.
Visit Hurricane's website at www.hurricaneenergy.com
Glossary
GWA | Greater Warwick Area, comprising the Lincoln and Warwick fields located on UKCS licences P1368 South and P2294 |
GWA JV | Greater Warwick Area joint venture (Hurricane 50%, Spirit Energy Resources Limited 50%) |
OGA | Oil and Gas Authority |
Inside Information
This announcement is released by Hurricane Energy plc and contains inside information under Regulation (EU) 596/2014 on market abuse, as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (the UK MAR). For the purpose of the UK MAR, this announcement is made by Antony Maris, Chief Executive Officer at Hurricane Energy plc.