Hurricane Energy dives into $7m loss but first-oil production set for take-off at Lancaster field as scheduled

Oil production is scheduled for take-off as scheduled at the Lancaster oil field west of Shetland next year – despite its Hurricane Energy owner ending the 2017 financial year with a loss of $7 million.

The company said 2017 was a ‘transformational year’ for Hurricane, with Lancaster’s early production system going into ‘execution’ phase after the field development plan was given the thumbs-up by the Oil and Gas Regulator.

Dr Robert Trice, Chief Executive, commented: “Last year saw Hurricane Energy gain both operational and commercial momentum as we movs toward first-oil and material cash generation.

 “Accordingly, Hurricane went through a step change in 2017; we booked our first reserves, increased our 2C Contingent Resources by 450%, obtained FDP approval on the first phase of development of our assets and first oil from Lancaster remains on schedule for H1 2019.

“As we look ahead to this milestone, we are in a position of strength with 100% ownership of a portfolio of assets with resources measured in the billions of barrels and with line of sight on further activity to ultimately achieve monetisation.”

Hurricane’s other assets include Warwick, which has best case Prospective Resources of 935 million stock tank barrels of oil, Whirlwind, which has 2C Contingent Resources of 205 mmboe (under the Whirlwind oil case) and Strathmore, which has 2C Contingent Resources of 32 million stock tank barrels of oil. Together, this brings Hurricane’s total combined 2P Reserves and 2C Contingent Resources to 2.6 billion barrels of oil equivalent.

Dr David Jenkins, Interim Chairman, added: “This has been a transformative year for Hurricane Energy via the successful $530 million fund-raise required to take the Final Investment Decision (FID) on the Lancaster Early Production System.

“Given the challenging oil price environment in mid-2017, this was a great achievement by management.

“The rapidity with which Hurricane has advanced Lancaster, from the drilling and testing of the -7 and -7Z wells in late 2016, to a funded and approved FDP with target first oil approaching, is unusual in the industry.

But moving at this pace has allowed us to remain at 100% in our licences, as we approach first cash-generation.”

12 Apr 2018

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