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Hurricane Energy Spuds Lancaster Well, West of Shetland

Source: www.gulfoilandgas.com 7/6/2016, Location: Europe

Hurricane Energy plc, the UK-based oil and gas company focused on hydrocarbon resources in naturally fractured basement reservoirs, announces that the 205/21a-7 well on the Lancaster field, West of Shetland, was spudded at approximately 01.35 hrs on 6 July 2016, using the Transocean Spitsbergen drilling rig. The well is located on licence P1368 Central in which Hurricane has a 100% interest.

The 205/21a-7 Pilot Well (the "Pilot Well") is the first in a two-well programme designed to refine the Lancaster resource range, provide a second future production well and provide new information to help optimally plan the Lancaster field development.

The Pilot Well's objectives are to:

(1) confirm the depth of oil water contact (OWC) - to help refine Hurricane's estimate of Lancaster's resources by determining the height of the oil column;

(2) evaluate the properties of a potential aquifer - to help refine Hurricane's estimate of recoverable oil by confirming the presence of a basement aquifer and its potential to provide pressure support to the overlying oil column; and

(3) evaluate the Victory sandstone resource range - to assess the potential for material resource upside in the Victory sandstone overlying the basement.

The Pilot Well will be drilled, extensively logged and tested, then permanently plugged and abandoned by filling with cement. Immediately thereafter the 205/21a-7z 1km Horizontal Sidetrack Well (the "Horizontal Well") is expected to be commenced.

The Horizontal Well's objectives are to:

(1) reconfirm production rates achieved in the 2014 horizontal well - to demonstrate that other parts of the reservoir can also deliver commercial flow rates;

(2) further quantify the reservoir characteristics through shut-in/pressure build-up tests - to help ascertain if there are any reservoir barriers as well as improve understanding of how the reservoir fracture system performs; and

3) provide a second production well ahead of the Early Production System.

The combined well operations, referred to as the Lancaster 7 Wells, are expected to last approximately four months after which there will be a period of data analysis. A further announcement will be made in due course.

Dr Robert Trice, CEO of Hurricane, commented:

"This is an extremely exciting moment in Hurricane's development as we embark on a drilling programme that will not only complete the remaining well stock required for an Early Production System, but will also help refine our Contingent Resource range for Lancaster - currently 62-456 MMboe - and thereby facilitate a final investment decision and help us better plan for the field development. We look forward to reporting on operations in due course."

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