Hurricane Energy PLC Operational and Corporate Update (3204S)
July 08 2020 - 2:00AM
UK Regulatory
TIDMHUR
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
-------------------------- -------- --------
Barrels of oil per
Average Oil Rate 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 14(th) 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 +44 (0)1483 862
Philip Corbett, Head of Investor Relations 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
(END) Dow Jones Newswires
July 08, 2020 02:00 ET (06:00 GMT)
Hurricane Energy (LSE:HUR)
Historical Stock Chart
From Mar 2024 to Apr 2024
Hurricane Energy (LSE:HUR)
Historical Stock Chart
From Apr 2023 to Apr 2024