TIDMHUR
RNS Number : 1528X
Hurricane Energy PLC
30 April 2021
30 April 2021
Hurricane Energy plc
("Hurricane", the "Company" or the "Group")
Proposed Financial Restructuring
Hurricane Energy plc, the UK based oil and gas company, provides
an update on the previously announced stakeholder engagement
process and discloses operational and financial projections which
have been shared with an ad hoc group of bondholders (the "Ad Hoc
Committee"), holding in aggregate approximately 69% by value of the
Company's $230 million convertible bonds due 24 July 2022 (the
"Convertible Bonds") as part of business planning, financing and
balance sheet restructuring discussions.
As part of this process, in recent months, the Company has been
engaging with the Ad Hoc Committee. Hurricane can now announce that
it has entered into a lock-up agreement (the "Lock-up Agreement")
with the Ad Hoc Committee, pursuant to which the Ad Hoc Committee
agrees to support a transaction that will materially deleverage the
Company's balance sheet, enhance its liquidity position and extend
its debt maturity profile (the "Restructuring"), thereby providing
Hurricane with the required financial flexibility to pursue a
revised business strategy.
To implement the Restructuring, the Company is proposing a
restructuring plan with holders of the Convertible Bonds (the
"Bondholders") under Part 26A of the Companies Act 2006 (the
"Restructuring Plan"). The Company will today issue a practice
statement letter to Bondholders, in which further information in
respect to the Restructuring Plan is contained. A copy of the
practice statement letter will also be uploaded to the Company's
website at www.hurricaneenergy.com for information purposes only.
The Restructuring Plan is expected to be considered by the High
Court of Justice at a convening hearing on 21 May 2021 virtually in
London. Further information regarding the Restructuring Plan will
be announced in due course and, where appropriate, uploaded to the
Company's website at www.hurricaneenergy.com . The impact of the
Restructuring Plan on the shareholders of the Company is further
explained below.
Further information regarding the Group's operational and
financial projections, which are summarised in this announcement,
can be accessed in full through a slide pack, which has been
uploaded to the Company's website at
www.hurricaneenergy.com/investors/presentations . These slides
contain information which was provided to the Ad Hoc Committee. The
slides are not a standalone presentation and should be read in
conjunction with this announcement, which provides important
context to the operational and financial information shared with
the Ad Hoc Committee.
The main components of the Restructuring are as follows:
-- The Company will execute a debt for equity conversion, which entails (amongst other things):
o A $50 million release of the principal amount outstanding
under the Convertible Bonds in exchange for the issue of ordinary
shares in the Company (the "Exchange Shares") comprising 95% of the
fully diluted pro forma equity of the Company immediately following
the Restructuring.
o An amendment to the terms and conditions of the remaining $180
million of Convertible Bonds in accordance with the revised terms
detailed below, including the provision of security and subsidiary
guarantees.
-- The Company will pursue a revised business strategy which
contemplates (i) an extended production case (which would see
production from the Lancaster 205/21a-6 well (the "P6 well")
continue until its economic limit is reached) and (ii) if supported
by the Bondholders in the future, an opportunity for subsequent
investments in the Lancaster field (notably a potential P8
production well drilled during the summer weather window in
2022).
As a result of entering into the Lock-up Agreement, an Event of
Default (as defined in the trust deed dated 24 July 2017 in
relation to the Convertible Bonds (the "Trust Deed")) has occurred.
However, as explained further below, the Company expects that the
Ad Hoc Committee will not take further action in relation to such
Event of Default whilst the Lock-up Agreement is in effect.
The Company invites Bondholders who are not currently members of
the Ad Hoc Committee to accede to the Lock-up Agreement. Any such
interested Bondholder should contact Lucid Issuer Services Limited
as Information Agent by email to hurricane@lucid-is.com for details
on how to accede to the Lock-up Agreement. Further information on
accession to the Lock-Up Agreement is
set out in the section entitled "Next Steps for Bondholders"
below.
The Company has conducted a thorough review of the various
alternatives to the Restructuring and has carefully considered the
likely consequences for the Group and its stakeholders if the
Restructuring is not implemented. In the course of its review the
Company has also consulted where possible with key stakeholders
including the Ad Hoc Committee. Having considered the position
carefully, the Company has concluded that in all the circumstances
and taking into account fluctuating oil prices, future production
levels and the scope and timing of future activity on the West of
Shetland portfolio and the impact of these on the Company's ability
to repay or refinance its convertible bond debt in full at
maturity, the implementation of the Restructuring via the
Restructuring Plan is likely to provide the best outcome for the
Group and its stakeholders.
Antony Maris, Chief Executive Officer, commented:
"This has been a difficult period for Hurricane and its
stakeholders. Following the significant downgrade to Lancaster
Field reserves and future production profiles, coupled with oil
price volatility, current financial projections show we will not be
in a position to repay our convertible bonds at maturity from
Lancaster Field cash flows. Significant time and effort has been
focused on all available technical, financial and commercial
options and, after careful consideration, we believe that
implementation of the proposed Restructuring will deliver the best
possible outcome. We acknowledge that this proposed course of
action entails significant dilution for our existing shareholders,
but it marks an important and necessary step in the Company's
efforts to secure a viable capital structure."
Background and Corporate Update
Hurricane is engaged in the production and development of
hydrocarbons from upstream assets located in the West of Shetland
basin in the UK, with a focus on the exploitation of fractured
basement reservoirs. The Company's key asset, the Lancaster field,
was developed utilising an early production system ("EPS") with two
production wells, P6 and 205/21a-7z (the "P7z well"), to assess the
performance of this complex reservoir type, provide dynamic data to
help refine reserves and resource estimates, and inform potential
future development phases.
However, the field has significantly underperformed, with
production rates, water cut and reservoir pressure all
disappointing compared to pre-production expectations. This
culminated in the shut in of the P7z well in May 2020 due to high
water cut, and the subsequent suspension of production
guidance.
Field underperformance triggered a full technical review, which
was announced to the market in June 2020. The initial results of
the technical review were announced in September 2020, which
included major changes to the geological model, and a significant
downgrade to the reserves and resources associated with the
Lancaster field. A Competent Person's Report ("CPR") by independent
third-party reserves auditor ERC Equipoise Limited ("ERCE") was
commissioned and published by the Company on 27 April 2021, the
conclusions of which are broadly consistent with the revised
estimates originally produced in September 2020.
The Lancaster field is currently only producing from the P6
well, which utilises artificial lift via an electric submersible
pump ("ESP") to support production. In March 2021, pressure
variability was observed in the P6 well while utilising the lower
ESP, with subsequent investigations suggesting a potential partial
obstruction to fluid flow above the lower ESP. Production was
restored to prior rates after a well intervention which switched
over to utilising the upper ESP in the well. Investigations are
still ongoing into the root cause of this issue. Should the upper
ESP in the P6 well fail in the future, there is a risk that the
lower ESP cannot be restored to full function, in which case the
Company might need to flow the well at lower rates.
Following several changes to management and its subsurface team,
and with the benefit of over 18 months of production data, the
Company believes it now has a much-improved technical understanding
of the Lancaster field. Updated and refined business plan scenarios
have therefore been developed by the Company, further details of
which are included below. However, in all the scenarios currently
under consideration, absent the implementation of an appropriate
restructuring, the Company will not be in a position to repay its
Convertible Bonds at maturity in July 2022.
Key Features of the Proposed Restructuring
The key features of the proposed Restructuring are as
follows:
Pursuant to the Lock-up Agreement, the Ad Hoc Committee has
undertaken to support the implementation of the Restructuring on
the basis of the agreed terms set out below.
Under the Lock-Up Agreement, if implemented, the Restructuring
will result in:
-- an extension to the maturity date of the Convertible Bonds to 31 December 2024;
-- a release of $50 million of the principal outstanding amount
of the Convertible Bonds, in exchange for which the Bondholders
shall be issued shares in the Company representing 95% of the fully
diluted pro forma equity of the Company immediately following the
Restructuring; and
-- the terms and conditions of the Convertible Bonds being
subject to various amendments, and associated documents being
entered into to provide additional guarantees and security to the
Bondholders (the "Amended and Restated Convertible Bonds").
Unless waived by a 75% majority in value of the Bondholders who
are party to or have acceded to the Lock-up Agreement, the
implementation of the Restructuring is conditional on, inter alia,
the Company receiving consent from the OGA to amend the Lancaster
Field Development Plan (the "FDP") to permit production with
flowing bottom hole pressure up to 300 psi below the bubble point
of the fluid (1,605 psia at 1,240 metres TVDSS).
Event of Default
As a result of entering into the Lock-up Agreement, an Event of
Default (as defined in the Trust Deed) has occurred pursuant to the
Condition 10(F) of the terms and conditions of the Convertible
Bonds. As the Company's ability to repay the Convertible Bonds at
maturity is dependent on the implementation of the proposed
Restructuring, a Potential Event of Default (as defined in the
Trust Deed) has also arisen. The Company has provided notice of the
Event of Default and Potential Event of Default to the Trustee as
required by the Trust Deed. Noting that approximately 69% by value
of the Convertible Bonds are held by the Ad Hoc Committee, and the
Lock-up Agreement contains certain forbearances and an agreement
not to take or encourage any action which would, or would
reasonably be expected to, delay, frustrate, impede or prevent the
implementation or consummation of the Restructuring, the Company
does not expect the Ad Hoc Committee to take action in relation to
the Event of Default while the Lock-up Agreement is in effect.
Amended and Restated Convertible Bonds
If implemented, the Restructuring would result in the release of
$50m of the outstanding principal amount of the Convertible Bonds,
such that the amount due on maturity of the Amended and Restated
Convertible Bonds will be $180 million (subject to rounding). The
Amended and Restated Convertible Bonds would bear cash interest at
a rate of 9.4% per annum, payment-in-kind (PIK) interest at a rate
of 5% per annum and mature in December 2024 (3.5 years from the
expected closing date of the Restructuring). A mandatory redemption
provision, whereby excess cashflow generated by the Group will be
applied in mandatory redemption of the Amended and Restated
Convertible Bonds on each interest payment date, and various
general, restrictive and information covenants will be added to the
Amended and Restated Convertible Bonds and included within
associated documents.
If implemented, the Restructuring would result in the removal of
the existing conversion options of the Convertible Bonds, and the
introduction of a new maturity conversion option exercisable by the
Company after December 2024 provided that, amongst other things,
all production at Lancaster has ceased permanently and all
remaining free cash of the Group has been applied towards
outstanding liabilities under the Amended and Restated Convertible
Bonds, all of which is intended to ensure continuing solvency for
the Company.
The Amended and Restated Convertible Bonds will be secured and
will be granted additional guarantees by certain Company
subsidiaries.
Key Terms of Lock-up Agreement
The parties to the Lock-Up Agreement have undertaken to support
the Restructuring, and in particular to:
-- promptly take all actions which they are reasonably requested
to take in order to support, facilitate, implement, consummate or
otherwise give effect to the Restructuring;
-- provide or agree to certain amendments, waivers and
forbearances in connection with the implementation of the
Restructuring;
-- not take or encourage any action which would, or would
reasonably be expected to, delay, frustrate, impede or prevent the
implementation or consummation of the Restructuring; and
-- not transfer or sub-participate any of their debt subject to
the Lock-Up Agreement unless the transferee or sub-participant
agrees to be bound by the terms of the Lock-Up Agreement.
Implementation
For the purpose of implementing the Restructuring, it is
proposed that an English Restructuring Plan under Part 26A of the
Companies Act 2006 will be utilised, which will require the support
of at least 75% (by value) of the Bondholders present (virtually)
or by proxy and voting at a meeting convened by the court. The
convening hearing of the court will be held virtually on 21 May
2021. Thereafter, details of the Bondholder plan meeting convened
by the court will be published in due course. The Bondholder plan
meeting is intended to be held virtually via video conference.
If sanctioned by the court, the effect of the issue of the
Exchange Shares will be to substantially dilute the shareholdings
of existing shareholders. The Company considers that the
restrictions on the directors' power to allot shares, which would
otherwise require approval of the shareholders, and the
shareholders' statutory pre-emption rights in connection with an
allotment of shares, will be disapplied in relation to the Exchange
Shares by sections 549(3A) and 566A of the Companies Act 2006 upon
sanction of the Restructuring Plan by the court. There will
therefore be no meeting of shareholders to vote on the proposed
issuance of Exchange Shares, nor will shareholders have a right of
pre-emption in relation to the issue of the Exchange Shares.
Maintenance of Trading on AIM
The Company intends to apply for the new ordinary shares
resulting from the Restructuring to be admitted to trading on AIM.
The Company also intends to take the necessary actions to ensure
that the admission of the Company's shares to trading on AIM
continues without interruption. The Board is no longer considering
a Main Market listing.
Failure to Implement the Restructuring
In the event that the Restructuring Plan is not approved by the
Bondholders at the plan meeting, or if it is approved by
Bondholders but not sanctioned by the court the Restructuring Plan
will not be capable of being implemented. In that scenario, it is
likely that there would be a controlled wind-down of the Group's
operations followed by an insolvent liquidation of the Company.
Updated Business Strategy
The Company has developed updated business plan scenarios and
together with its advisers has reviewed in detail these future
development options for the Lancaster field. In particular, this
process has taken into consideration:
-- projected investment requirements and associated liquidity constraints;
-- the need to ensure the viability and sustainability of Hurricane's balance sheet; and
-- current reliance on production from the P6 well.
With these factors in mind, a summary of three investment
scenarios that have been discussed with the Ad Hoc Committee is set
out below . These scenarios incorporate different oil price and
technical assumptions to those included in the ERCE CPR, but are
within the ranges of Reserves and Contingent Resources estimated by
ERCE.
No further activity ("NFA")
-- Assumes no further investment in the Lancaster field, with
Hurricane executing a wind-down of operations commencing when
production from the field is no longer economic. Decommissioning
would follow as soon as practical after production ceases
-- Economic limit: February 2024 (at the forward curve(1) ) with
potential future recovery from the Lancaster field of 10.0 MMbbls
(at 1 Jan 2021)(2)
-- Based on the NFA scenario, the Company expects Lancaster
field production to average 8,500 - 10,500 bopd in 2021, based on
production from the P6 well alone on artificial lift via ESP and a
90% production efficiency estimate. Lancaster has averaged 11,100
bopd year to date and is currently producing from the P6 well at
11,700 bopd with an associated water cut of 28%.
Drilling a side-track of the existing P7z well in 2022 ("P8
2022")
-- Assumes a side-track of the existing P7z well (the "P8 well")
is sanctioned by mid-2021 and drilled in 2022
-- The P8 well would be designed to accelerate production,
achieve a higher operating margin and improve production
resiliency
-- First oil assumed in July 2022
-- Estimated capital expenditure of $84 million, with a material
proportion of this figure committed at project sanction
-- Economic limit: August 2023 (at the forward curve(1) ),
earlier than the NFA case due to accelerated production of
reserves, with potential future recovery from the Lancaster field
of 11.6 MMbbls (at 1 Jan 2021)(2)
Drilling of a water injector well in 2023 ("P8 + WI 2023")
-- Assumes that a water injector is sanctioned by mid-2022
(following completion of the P8 well operations) and drilled in the
summer of 2023 to improve the sweep efficiency of the Lancaster
reservoir and support reservoir pressure
-- A seismic campaign in the summer 2022 may be required to
optimise design and downhole location of the water injector
-- Drilled from a seabed location within 400 metres of the
existing Lancaster manifold utilising existing Lancaster subsea
infrastructure (flowline, riser and umbilical)
-- Requires refurbishment of existing water injection plant onboard the Aoka Mizu FPSO
-- Estimated capital expenditure of $96 million (in addition to
the P8 expenditure above and including a seismic programme during
summer 2022)
-- Economic limit: May 2025 (at the forward curve(1) ) with
potential future recovery from the Lancaster field of 18.7 MMbbls
(at 1 Jan 2021)(2)
(1) Based on YTD actual Brent price and Forward Curve (as of 23 Apr 21)
(2) Assuming extension of Bluewater contract on existing terms -
i.e. for a further 3 year team. Note: this has been assumed for
illustrative purposes only. Hurricane's ability to deliver its
selected business strategy is predicated on amendments to the
existing Bluewater terms, meaning that a 3 year extension is
unlikely to be the chosen outcome. It is therefore envisaged that
the Company and Bluewater may enter into amended agreements as part
of, or shortly after, implementation of the transaction. If no such
amendments are agreed, the charter contract will likely terminate
in June 2022 when the existing charter period comes to an end.
The cases above are estimated projections, based on the
Company's current estimates of factors including future production,
oil prices, operating costs, financing costs and capital
expenditure costs, at a point in time. Whilst the Company has taken
reasonable care to ensure insofar as is possible that the
projections are reasonable, the assumptions, and thus the projected
outcomes, are expected to change in the future. These projections
do not constitute a profit forecast and have not been reported on
by a reporting accountant. Unlike a forecast, where the Company
would be required by the AIM Rules for Companies to report on a
continuous basis, the Company will not be reporting performance to
the above cases and it expressly cautions against the information
above being used for any forward-looking purpose after this
date.
Instead, the Company proposes to announce, in addition to its
general obligations under MAR and the AIM Rules, updates which may
include, amongst other things:
-- monthly production, average water cut and bottom hole pressure for each producing well;
-- monthly estimated revenue generated and estimated average price for Lancaster crude sales;
-- quarterly summary of net free cash, the Group's
decommissioning and abandonment liability and excess cash to be
applied in the mandatory redemption of the Amended and Restated
Convertible Bonds;
-- upon the Company seeking approval from its Bondholders in
relation to further investment, a summary of the forecast
production profile and associated capital or investment
expenditure;
-- in March and September of each year, a production forecast for the next 6-month period;
-- if it is reasonably expected that a material breach of the
Lancaster FDP (or any associated production consent or flare
consent) would occur, a reasonably detailed summary of the
reservoir simulation model forecasts and estimated timing of when
such breach could occur; and
-- if, at any time, the Company reasonably expects the
production during any continuous 3-month period to fall materially
below the average production forecasted, an announcement of such
expectation.
The most likely scenario for the Company is that no further
investment activity is sanctioned in the near term. This will
require stakeholders to provide support and concessions, which will
be required to extend the life of the field, but would not require
further investment in the Lancaster field. The Company does not
consider that such a scenario is likely to generate sufficient
value to make possible any return for shareholders. The P8 2022 and
P8 + WI 2023 scenarios outlined above represent future development
opportunities, which, subject to support of the Bondholders at the
time and potential investment from third parties, could increase
oil recovery from the Lancaster field.
In April 2021, the Offshore Petroleum Regulator for Environment
& Decommissioning ("OPRED") formally requested that the Company
increase the amount of decommissioning security for the Lancaster
field by GBP11.2 million ($15.7 million), in order for the security
to be in place on a pre-tax basis. Accordingly, the Company expects
to classify this amount as restricted cash in May 2021, which will
result in a total of GBP28.0 million ($39.2 million) of cash
restricted as decommissioning security.
Hurricane continues to evaluate the potential of the Lincoln and
Warwick Crest discoveries on the Greater Warwick Area ("GWA")
licence, where Hurricane has a 50% working interest. The OGA
recently approved an extension of the deadline to plug and abandon
the Lincoln-14 well to 31 October 2021 (from 30 June 2021) to allow
for completion of operations in the summer 2021 weather window. The
GWA joint venture has contracted a rig for the Lincoln-14 plug and
abandonment, with a gross budgeted cost of $13 million for this
activity. The GWA joint venture also has a commitment to drill a
well on the licence by 30 June 2022. Pending further evaluation and
planning, the estimated net cost of this well is not included in
the forecasts detailed below.
Key Assumptions and Outputs from Business Planning
The following disclosures summarise the oil price assumptions
and operational and financial projections shared with the Ad Hoc
Committee during the balance sheet restructuring discussions.
Annual Average Production Forecast (kbbl/day)(1,4)
---------------------------------------------------------------
2021 2022 2023 2024 2025 2026
------------------------ ----- ----- ----- ---- ---- ----
No Further Activity 9.9 8.7 7.7 1.0 - -
------------------------ ----- ----- ----- ---- ---- ----
P8 2022 9.9 14.2 7.7 - - -
------------------------ ----- ----- ----- ---- ---- ----
P8 + WI 2023 9.9 14.2 12.7 10.7 3.6 -
------------------------ ----- ----- ----- ---- ---- ----
Oil Price Forecast Assumptions ($/bbl)(2)
------------------------------------------------------
2021 2022 2023 2024 2025 2026
---------------- ----- ----- ---- ---- ---- ----
Forward Curve
(as of April
23, 2021) 63.4 61.0 58.9 57.5 56.8 56.5
---------------- ----- ----- ---- ---- ---- ----
Annual Net Free Cash Balance Forecast ($m)(3)(4)
-------------------------------------------------------------
2021 2022 2023 2024 2025 2026
----------------------- ----- ----- ---- ---- ---- ----
No Further Activity 78 78 71 - - -
----------------------- ----- ----- ---- ---- ---- ----
P8 2022 102 113 61 46 - -
----------------------- ----- ----- ---- ---- ---- ----
P8 + WI 202
3 102 108 104 67 89 91
----------------------- ----- ----- ---- ---- ---- ----
Note: Cash balances reflect the proposed restructuring terms;
Current Bluewater FPSO terms assumed in all cases; Net Free cash
defined as current unrestricted cash (i.e. excluding escrowed
amounts relating to decommissioning and early termination of
Bluewater FPSO), plus current trade and other receivables, current
oil price derivatives, less current financial trade and other
payables
(1) Includes YTD actual average monthly production for January-March 2021
(2) Includes YTD actual average monthly Brent price for January-March 2021
(3) Based on YTD actual Brent price and Forward Curve (as of 23-Apr-21)
(4) Assumes extension of Bluewater contract on existing terms -
i.e for a further 3 year term. Note: this has been assumed for
illustrative purposes only. Hurricane's ability to deliver its
selected business strategy is predicated on amendments to the
existing Bluewater terms, meaning that a 3 year extension is
unlikely to be the chosen outcome. It is therefore envisaged that
the Company and Bluewater may enter into amended agreements as part
of, or shortly after, implementation of the transaction. If no such
amendments are agreed, the charter contract will likely terminate
in June 2022 when the existing charter period comes to an end.
Key Risks Relating to the Investment Cases Outlined Above
The investment cases outlined above are subject to a number of
risks. These are outlined below, and broadly classified as
operational, reservoir and investment risks:
-- Operational: Primarily the scenarios outlined above rely on
extended production from the P6 well. Relying on production from a
single well as the Company's only source of revenue until such time
as a further production well is brought onstream. There remain
several risks relating to well failure, including risk of ESP
failure (associated with run time) and multiple single point
failure risks which can only be mitigated by additional well
stock
-- Reservoir: The geology of the Company's licence areas and the
behaviour of the associated reservoirs rely on various assumptions
and interpretation techniques, and the performance of fractured
basement reservoirs is difficult to predict. There is a risk that
the reservoirs do not behave as expected, such as significantly
higher water production than predicted or reserves/resources being
less than expected
-- Cost inflation: Depending on the contract environment when
investment decisions are made and materials procured
-- Oil price: Fluctuations in oil price could lead to revenue
falling below levels required to cover field running costs
-- Regulatory Risk: There is a risk that changes in the
regulatory environment affect the Company's ability to carry out
planned programmes and/or the returns expected to be achieved from
the Company's assets
-- Production below Bubble Point: The Lancaster field production
forecasts used in the Company's business planning and bondholder
engagement require OGA approval for production to continue below
bubble point. The Company is confident it will obtain approval from
the OGA, providing the Company with a rolling 3-month consent to
produce below bubble point, although this is subject to quarterly
review of operating procedures to ensure gas liberated in the
reservoir is not produced
-- Key personnel: The Company depends on certain of its key
personnel having expertise in the areas of exploration and
development, operations, engineering, business development, oil and
gas marketing, finance and accounting. The loss of the services of
any key personnel could have a material adverse effect on the
Company
-- Future decommissioning liabilities: The Company, through its
licence interests, has undertaken certain obligations in respect of
the decommissioning of its wells, fields and related
infrastructure. These liabilities are derived from legislative and
regulatory requirements. It is difficult to accurately forecast the
costs that the Company will incur in satisfying its decommissioning
obligations
-- Reliance on third party services and equipment: The Company's
operations are dependent on the availability of an FPSO (the Aoka
Mizu), rigs, equipment, and offshore services, leased or contracted
from third party providers and suppliers. There is a risk the
Company is unable to secure or extend third party services. In
particular, the FPSO is hired on charter from Bluewater. Under the
terms of the agreement the Company may elect to extend the FPSO
term periodically. If the Company is unable to, or elects not to,
extend the FPSO charter on existing or amended terms, there is a
material risk to ongoing production from the Lancaster field
Next Steps for Bondholders
Questions about the Restructuring should be directed to the
Company and Lucid Issuer Services Limited. Details of how to accede
to the Lock-up Agreement should be directed to Lucid Issuer
Services Limited as the Information Agent, by email to
hurricane@lucid-is.com . All Bondholders are eligible to
participate in the Lock-up Agreement and may accede to the Lock-up
Agreement at any time by completing an Accession Letter to the
Lock-up Agreement. No consent fee will be payable to Bondholders in
connection with accession to the Lock-Up Agreement. In support of
their Accession Letters, Bondholders will be able to confirm their
positions in the Bonds electronically via the clearing systems
until 12 May 2021. After such date, Bondholders wishing to accede
to the Lock-up Agreement should contact Lucid Issuer Services
Limited as the Information Agent by email to hurricane@lucid-is.com
. All documentation relating to the Lock-up Agreement, together
with any updates, will be available on the dedicated website
https://deals.lucid-is.com/hurricane . Bondholders will require a
password to access the website. A password may be obtained by
emailing hurricane@lucid-is.com .
For additional information, Bondholders are encouraged to get in
touch with the Ad Hoc Committee via their financial advisor
Houlihan Lokey ( ProjectHavenHL@hl.com ).
Next Steps for Shareholders
Questions about the Restructuring should be directed to the
Company by email to communications@hurricaneenergy.com . Further
information regarding the Restructuring Plan will be announced in
due course and, where appropriate, uploaded to the Company's
website at www.hurricaneenergy.com . A copy of the practice
statement letter will be uploaded to the Company's website at
www.hurricaneenergy.com for information purposes only. The
Restructuring does not require shareholder approval and no action
is required to be taken by shareholders.
-ends-
Contacts:
Hurricane Energy plc
Antony Maris, Chief Executive Officer +44 (0)1483 862
Philip Corbett, Head of Investor Relations 820
Evercore Partners International LLP
Financial Advisor
Stephan Chischportich / Gent Kadare +44 (0)20 7653
Project-HavenEvercore@Evercore.com 6000
Stifel Nicolaus Europe Limited
Nominated Adviser & Corporate Broker +44 (0)20 7710
Callum Stewart 7600
Investec Bank plc
Joint Corporate Broker +44 (0)20 7597
Chris Sim / Rahul Sharma 5970
Vigo Communications
Public Relations
Patrick d'Ancona / Ben Simons +44 (0)20 7390
hurricane@vigocomms.com 0230
Lucid Issuer Services Limited
Information Agent
David Shilson / Sunjeeve Patel + 44 (0)20 7704
https://deals.lucid-is.com/hurricane 0880
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 has pursued a phased
development of Lancaster, initially 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.
Visit Hurricane's website at www.hurricaneenergy.com
Prior to publication, this document contained inside information
under Regulation (EU) 596/2014 on market abuse.
Review by Qualified Person
The technical information in this release has been reviewed by
Antony Maris, Chief Executive Officer, who is a qualified person
for the purposes of the AIM Guidance Note for Mining, Oil and Gas
Companies. Mr Maris is a petroleum engineer with 35 years'
experience in the oil and gas industry. He has a B.Sc.(Eng.)
Petroleum Engineering (Hons) from the Imperial College of Science
and Technology (University of London) Royal School of Mines
A.R.S.M. and an MBA from Kingston Business School.
Standard
Reserves and resource estimates for the Lancaster field
contained in this announcement have been prepared in accordance
with the Petroleum Resource Management System guidelines endorsed
by the Society of Petroleum Engineers, World Petroleum Congress,
American Association of Petroleum Geologists and Society of
Petroleum Evaluation Engineers.
Glossary
bbls/d Barrels per day
FDP Field development plan
---------------------------------
FDPA Field development plan amendment
---------------------------------
FPSO Floating production storage
offloading vessel
---------------------------------
kbopd Thousands of barrels of oil
per day
---------------------------------
MMbbls Millions of barrels
---------------------------------
OGA Oil & Gas Authority
---------------------------------
Psi Pounds per square inch
---------------------------------
Psia Pounds per square inch absolute
---------------------------------
TVDSS Total vertical depth subsea
---------------------------------
Disclaimer
This announcement may contain projections, estimates, forecasts,
targets, prospects, returns and/or opinions in relation to the
Company (together the "Forecasts"). These Forecasts can be
identified by the use of forward--looking terminology, including
the terms "believes," "estimates," "aims," "targets,"
"anticipates," "expects," "intends," "may," "will" or "should" or,
in each case, their negative, or other variations or comparable
terminology. The Forecasts involve significant assumptions and
subjective judgments which may or may not prove to be correct and
there can be no assurance that any Forecasts are a reliable
indicator of future performance, nor that they are attainable or
will be realised. There are a number of risks, uncertainties and
factors that could cause actual results and developments to differ
materially from those expressed or implied by any statements and
Forecasts made in the Presentation. If one or more of these risks
or uncertainties materialise, or if any underlying assumptions
prove incorrect, the Company's actual results of operations,
financial condition and liquidity and the development of the
industry in which it operates may differ materially from those made
in or suggested by the Forecasts. No reliance may be placed, for
any purpose, on the Forecasts or the information contained in this
announcement.
The completion of the Restructuring is subject to various
conditions, including but not limited to the approval of the
transaction and agreement of its terms by prescribed percentages of
the Bondholders. There can be no assurance that the Restructuring
will be completed on the terms currently envisaged, or at all.
U.S. Securities Law Disclaimer
This announcement, and the transactions to which it relates, has
been issued in respect of securities of a non-U.S. company. Any
offer of securities contemplated hereby is subject to disclosure
requirements of a country other than the United States that are
different from those of the United States.
Financial statements included in this announcement, if any, have
been prepared in accordance with foreign accounting standards that
may not be comparable to the financial statements of United States
companies.
It may be difficult for a U.S. holder of the Convertible Bonds
to enforce their rights and any claim they may have arising under
U.S. federal securities laws, since the Company is located in a
foreign country and all of its officers and directors are residents
of a foreign country. A U.S. holder of the Convertible Bonds may
not be able to sue a foreign company or its officers or directors
in a foreign court for violations of the U.S. securities laws. It
may be difficult to compel a foreign company and its affiliates to
subject themselves to a U.S. court's judgment.
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