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Hurricane Energy PLC: DEEP DIVE
OVERVIEW

Hurricane Energy's move into production will cap impressive story

Hurricane Energy has gone from a conceptual idea to point of substantial production
Hurricane
OVERVIEW: HUR The Big Picture
Lancaster is expected to produce 17,000 barrels per day in phase 1

 

  • Hurricane Energy PLC (LON:HUR) is pioneering the development of fractured basement reservoirs in the UK Continental Shelf

  • Licences are centred around Rona Ridge on the Atlantic margin, west of Shetland

  • The group has drilled eight wells on its licences since 2009, including five on the Lancaster field

  • Production from the Lancaster early production system (EPS) is expected in the summer

  • Lancaster’s early production expected to be around 17,000 barrels of oil per day.

 

What it owns

Lancaster

A floating oil platform Aoka Mizu has arrived at the Lancaster field, though it has hit a few snags getting anchored to the buoy.  

Lancaster’s start-up will dovetail with a multi-well drilling campaign, comprising exploration and appraisal.

That programme is being supported by new joint venture partner Spirit Energy (part-owned by Centrica).

Extended production will allow Hurricane to gain a better understanding of the reservoir for all of its licences.

In September, Spirit dealt into the Greater Warwick portion of Hurricane’s West of Shetland portfolio.

Together, the Greater Lancaster (GLA) and Greater Warwick (GWA) areas span a large geologic feature known as the Rona Ridge.

The deal with Spirit Energy sees Hurricane trading away 50% of the Greater Warwick Area in return for US$387mln for well-drilling and development programme that aims to deliver production by 2020.

Cashflows from the Lancaster EPS can now be reinvested back in the larger Lancaster field development (rather than fund exploration and appraisal activity), said Hurricane.

 

Greater Warwick Area

Spirit’s Phase 1 programme will see three new wells drilled.

It aims to accelerate the appraisal of Lincoln and confirm the Warwick discovery.

Hurricane will be ‘carried’ in the US$180.6mln initial drilling programme.

A rig contract has already been signed with Transocean for drilling to start in early 2019.

In Phase 2, assuming prior wells are successful, Spirit will lead field development work aimed at connecting the GWA fields to infrastructure due to be in place at the Lancaster field which, at that point, would be online.

Spirit is expected to spend some US$187mln on this phase of work, which will include upgrades to the Aoka Mizu floating production, storage and offloading (FPSO) vessel, pipelines, and other engineering.

Presently, the initial GWA development is suggested as a single well tie-back to Lancaster’s Aoka Mizu for some 10,000 barrels of oil per day.

Also, Spirit will be expected to contribute some US$150-250mln to cover Hurricane’s share of additional, contingent costs of a larger field development at the GWA.

 

What the boss says: Robert Trice, chief executive

"As we approach first oil on Lancaster, which remains on track for 1H 2019, we have increased financial flexibility and two parallel work programmes to drive our Rona Ridge Resources towards monetisation."

 

Video

 

Inflexion points

  • Aoka Mizu attached

  • First production from Lancaster

  • Exploration drilling gets underway at GWA

 

Blue Sky

Fractured basement reservoirs exist in many parts of the world

UK success can be a blueprint for other areas

Potential to find substantial more oil West of Shetland

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Hurricane Energy PLC Timeline

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