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Operational and Corporate Update

8 Jul 2020 07:00

RNS Number : 3204S
Hurricane Energy PLC
08 July 2020
 

8 July 2020

Hurricane Energy plc

 

("Hurricane" or the "Company")

 

Operational and Corporate Update

 

Hurricane Energy plc, the UK based oil and gas company focused on hydrocarbon resources in naturally fractured basement reservoirs, provides an operational and corporate update.

 

Lancaster EPS Quarterly Production Update

 

 

 

Q1 2020

Q2 2020

Oil Production(1)

Million barrels (MMbbls)

1.4

1.3

Average Oil Rate

Barrels of oil per day (bopd)

14,900

14,300

Average Water Cut(2)

% total fluids

17%

21%

1. The table shows the combined oil production from the 205/21a-6 and 205/21a-7z wells during each quarter.

2. Expressed as total water produced divided by total fluid (oil and water) production in each quarter

 

Since the Company's last update on 8 June 2020, the 205/21a-6 well on the Lancaster field has produced at an average rate of c. 12,000 bopd. The increase in oil production from the 205/21a-6 well implemented on 5 June 2020 has, as expected, been accompanied by an increase in produced water. Prior to commissioning of the Electric Submersible Pumps ("ESPs"), the volume of water production from the 205/21a-6 well represented a water cut of c.11% compared to 8% immediately prior to 5 June.

 

Following the relaxation of COVID-19 restraints on UKCS offshore operations, on 3 July 2020 the Company began commissioning the ESPs in the Lancaster production wells. Both the 205/21a-6 and 205/21a-7z wells are currently flowing with use of the ESPs and delivering combined production of c.15,000 bopd. The Company plans to continue testing both wells on ESPs for a short period of up to two weeks before finalising its near-term production strategy. Further updates, including a stabilised water production rate, will be announced in due course.

 

The Aoka Mizu FPSO has maintained a high level of operational uptime. A planned annual week long maintenance shut down is provisionally scheduled for September 2020.

 

The 14th cargo of Lancaster oil was lifted in late June 2020, with the next lifting scheduled for late July 2020.

 

Technical review

 

As disclosed on 8 June 2020, the Technical Committee of Hurricane's Board is re-examining the full range of possible geological and reservoir models for the Lancaster field. The 2017 Competent Person's Reports attributed independently certified reserves to the Lancaster EPS development and contingent resources associated with the overall West of Shetland portfolio. The outcome of the technical review may lead to a material downgrade of these contingent resource estimates. Any such revisions would be formally reflected in a new Competent Person's Report, currently scheduled for release no later than the end of Q1 2021.

 

A decision on future operational activity will be informed by the technical review. While no decisions have been made on the nature and timing of future activity on Lancaster, the Company believes that, given the design and procurement lead times likely to be involved coupled with the constraints of the operational weather window West of Shetland during the winter months, any well operations activity at the Lancaster field location would commence late in the first quarter of 2021 at the earliest.

 

Results of the technical review and future production plans are expected no later than the Company's interim 2020 financial results, which are provisionally scheduled for 11 September 2020.

 

Greater Warwick Area ("GWA")

 

The Oil and Gas Authority ("OGA") has given notice to the GWA joint venture of a proposed field determination area over local structural closure at the Lincoln discovery. Hurricane is committed to working with its partner Spirit Energy on the best route forward for the Lincoln discovery.

 

Hedging

 

During June 2020, the Company hedged a portion of its forecast production for the second half of 2020. A total of 1.8 MMbbls, or c.10,000 bopd, has been hedged through the purchase of put options with an average strike price of $35/bbl. The average strike price of $35/bbl represents a floor for the hedged volumes of 1.8 MMbbls, with the Company retaining any upside in oil prices above this level. The cost of acquiring the put options was $3.4 million.

 

-ends-

 

 

Contacts: 

 

Hurricane Energy plc

Beverley Smith, Interim Chief Executive Officer

Philip Corbett, Head of Investor Relations

 

+44 (0)1483 862 820

Stifel Nicolaus Europe Limited

Nominated Adviser & Joint Corporate Broker

Callum Stewart / Ashton Clanfield

 

+44 (0)20 7710 7600

Morgan Stanley & Co. International plc

Joint Corporate Broker

Andrew Foster / Tom Perry / Alex Smart

 

+44 (0)20 7425 8000

Vigo Communications

Public Relations

Patrick d'Ancona / Ben Simons

hurricane@vigocomms.com

+44 (0)20 7390 0230

 

About Hurricane

 

Hurricane was established to discover, appraise and develop hydrocarbon resources associated with naturally fractured basement reservoirs. The Company's acreage is concentrated on the Rona Ridge, in the West of Shetland region of the UK Continental Shelf.

 

The Lancaster field (100% owned by Hurricane) is the UK's first producing basement field. Hurricane is pursuing a phased development of Lancaster, starting with an Early Production System consisting of two wells tied-back to the Aoka Mizu FPSO. Hydrocarbons were introduced to the FPSO system on 11 May 2019 and the first oil milestone was achieved on 4 June 2019.

 

In September 2018, Spirit Energy farmed-in to 50% of the Lincoln and Warwick assets, committing to a phased work programme targeting sanction of an initial stage of full field development.

 

Glossary

bopd

Barrels of oil per day

FPSO

Floating production storage and offloading vessel

MMbbls

Million barrels

UKCS

UK Continental Shelf

 

Inside Information

 

This announcement contains inside information as stipulated under the market abuse regulation (EU no. 596/2014). Upon the publication of this announcement via regulatory information service this inside information is now considered to be in the public domain.

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.
 
END
 
 
UPDKKOBPKBKBNOK
Date   Source Headline
21st Jul 20217:00 amRNSHolding(s) in Company
14th Jul 20217:00 amRNSOperational and Financial Update
7th Jul 20217:00 amRNSCompletion of Lincoln-14 well plug and abandonment
5th Jul 20217:00 amRNSHolding(s) in Company
1st Jul 20217:00 amRNSFurther announcement regarding Restructuring Plan
30th Jun 20216:14 pmRNSResults of AGM
30th Jun 20217:00 amRNSBoard Changes and Withdrawal of GM Requisition
28th Jun 20219:32 amRNSResults of Sanction Hearing
23rd Jun 20214:35 pmRNSPrice Monitoring Extension
23rd Jun 20213:47 pmRNSConclusion of Sanction Hearing
22nd Jun 20217:00 amRNS2020 Environmental, Social and Governance Report
17th Jun 20217:00 amRNSLancaster Field Development Plan Addendum Approval
16th Jun 20217:00 amRNSLancaster Field Update
16th Jun 20217:00 amRNSUpdate on Lincoln-14 well plug and abandonment
11th Jun 20214:08 pmRNSResults of Shareholder Plan Meeting
11th Jun 20211:40 pmRNSLancaster Field Update
11th Jun 202112:09 pmRNSResults of Bondholder Plan Meeting
10th Jun 20217:00 amRNSOperational Update
7th Jun 202112:38 pmRNSNotice of Extraordinary General Meeting
4th Jun 20212:00 pmRNSAvailability of Annual Report
4th Jun 20217:00 amRNSAoka Mizu Charter Update
3rd Jun 20214:40 pmRNSSecond Price Monitoring Extn
3rd Jun 20214:35 pmRNSPrice Monitoring Extension
2nd Jun 20214:59 pmRNSUpdate on Shareholder Restructuring Plan Meeting
1st Jun 20214:41 pmRNSSecond Price Monitoring Extn
1st Jun 20214:36 pmRNSPrice Monitoring Extension
27th May 20214:41 pmRNSSecond Price Monitoring Extn
27th May 20214:35 pmRNSPrice Monitoring Extension
26th May 202111:40 amRNSNotice of AGM
25th May 20217:00 amRNSFull-year Results 2020
24th May 202112:05 pmRNSShareholder Plan Meeting Notice
24th May 202110:21 amRNSUpdate on Proposed Financial Restructuring
20th May 20217:00 amRNSConfirmation of details of the Convening Hearing
19th May 20217:00 amRNSRequisition of General Meeting
19th May 20217:00 amRNSCrystal Amber requisitions GM of Hurricane Energy
14th May 20214:41 pmRNSSecond Price Monitoring Extn
14th May 20214:35 pmRNSPrice Monitoring Extension
13th May 20215:34 pmRNSUpdate on Proposed Financial Restructuring
11th May 20214:40 pmRNSSecond Price Monitoring Extn
11th May 20214:35 pmRNSPrice Monitoring Extension
10th May 20217:00 amRNSCorrection - Proposed Financial Restructuring
10th May 20217:00 amRNSOperational Update and Notice of Results
30th Apr 20218:28 amRNSProposed Financial Restructuring
27th Apr 20217:00 amRNSCPR on West of Shetland Assets
19th Apr 20217:00 amRNSOperational and Financial Update
16th Apr 20214:41 pmRNSSecond Price Monitoring Extn
16th Apr 20214:35 pmRNSPrice Monitoring Extension
15th Apr 20214:40 pmRNSSecond Price Monitoring Extn
15th Apr 20214:35 pmRNSPrice Monitoring Extension
13th Apr 20214:34 pmRNSHolding(s) in Company

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