TIDMHUR

RNS Number : 8105A

Hurricane Energy PLC

04 June 2021

4 June 2021

Hurricane Energy plc

("Hurricane" or the "Company")

Aoka Mizu Charter Update

Hurricane Energy plc, the UK based oil and gas company, announces that it has resolved not to exercise its option to extend the bareboat charter of the Aoka Mizu FPSO (the "Bareboat Charter") for a period of three years from June 2022 to June 2025.

As disclosed previously, and most recently in the Explanatory Statement in connection with the Company's proposed financial restructuring (which can be accessed through the Company's website at https://www.hurricaneenergy.com/investors/financial-restructuring-documentation ), the three year initial term (the "Initial Term") of the Bareboat Charter expires in June 2022, unless, by 4 June 2021, the Company has exercised an option to extend for a period of three years, to June 2025.

Based on the contractual terms for the three year extension (see Appendix) and the current Lancaster production forecasts, the Company does not believe it is in the best interests of the Company and its stakeholders to exercise the option in its current form to extend the Aoka Mizu lease to June 2025, given the significant financial obligations this could entail. Accordingly, it has resolved not to do so.

As contemplated in the Explanatory Statement, the Company remains in negotiations with Bluewater Energy Services B.V., the owner of the Aoka Mizu FPSO, over an alternative extension to the Bareboat Charter for a shorter period than three years.

The Company believes there is a reasonable prospect of negotiating such an extension of the existing contract on acceptable terms. However, there is no guarantee of an extension of the existing contract on acceptable terms. In such an outcome, Hurricane may need to pursue a controlled wind-down of its business and cease operations at the Lancaster field upon the expiry of the Bareboat Charter in 2022, at which point the field would be decommissioned.

The non-exercise of the option in its current form by the Company (as described in the Explanatory Statement) does not affect the proposed Restructuring Plan.

-ends-

Contacts:

 
 Hurricane Energy plc 
  Antony Maris, Chief Executive Officer 
  Philip Corbett, Head of Investor Relations    +44 (0)1483 862820 
 Stifel Nicolaus Europe Limited 
  Nominated Adviser & Joint Corporate Broker 
  Callum Stewart                                +44 (0)20 7710 7600 
 Investec Bank plc 
  Joint Corporate Broker 
  Chris Sim / Rahul Sharma                      +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 was established to discover, appraise and develop hydrocarbons 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 Limited 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

Appendix

Independent of the decision not to exercise the three-year extension option, from 4 June 2021, the Bareboat Charter day rate increases to US$75,000 per day (from US$25,000 per day) and the incentive tariff (a percentage of the net back sales price of crude oil sales) reduces to 8% (from 9%).

If the option to extend the Bareboat Charter had been exercised, the early termination fee (the fee payable should Hurricane choose to exit the Bareboat Charter outside of the pre-agreed break dates) would have increased to US$56.0 million (from US$18.8 million at the end of May 2021) and would then have declined linearly over the remaining term of the lease.

Glossary

 
 FPSO   Floating production storage and offloading 
         vessel

Inside Information

Prior to publication, this document contained inside information under Regulation (EU) 596/2014 on market abuse.

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.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

MSCFFFVVRIIVIIL

(END) Dow Jones Newswires

June 04, 2021 02:00 ET (06:00 GMT)

Hurricane Energy (LSE:HUR)
Historical Stock Chart
From Mar 2024 to Apr 2024 Click Here for more Hurricane Energy Charts.
Hurricane Energy (LSE:HUR)
Historical Stock Chart
From Apr 2023 to Apr 2024 Click Here for more Hurricane Energy Charts.