Hurricane Energy Announces CPR on West of Shetland Assets

Source: www.gulfoilandgas.com 4/7/2021, Location: Europe

Hurricane Energy plc, the UK based oil and gas company, announces that a summary of a Competent Person’s Report (CPR) on the Company’s West of Shetland assets by ERC Equipoise Ltd (ERCE) has been published on the Company’s website.

The full CPR will be published on the Company’s website in due course, once finalized. ERCE’s work has been prepared in accordance with the June 2018 Petroleum Resources Management System (“PRMS”) as the standard for classification and reporting with an effective date of 31 December 2020.

Antony Maris, Chief Executive Officer of Hurricane, commented:
“The summary of the CPR published is broadly consistent with the estimates for Lancaster and Lincoln which we presented in September 2020. We are continuing to work on a financial plan and are engaging with our key stakeholders to allow us to take the business forward and provide us with the best chance of targeting these reserves and resources.”

Lancaster Reserves and Resources
Lancaster Reserves (Hurricane 100% working interest) and associated Net Present Values (“NPVs”).

ERCE’s estimates of Reserves for the Lancaster field assume production only from the 205/21a-6 well (the “P6 well”) and reflect its natural decline. Hurricane’s future development plan requires the field to be produced below the bubble point of the oil. Hurricane has submitted an amendment to the Lancaster field development plan (“FDPA”) to the UK upstream regulator, the Oil and Gas Authority (“OGA”), to allow for production below bubble point. Hurricane is in constructive discussions with the OGA to obtain the FDPA to permit ongoing reservoir management on this basis, subject to quarterly review of operating procedures to ensure gas liberated in the reservoir 2 is not produced. Hurricane has a reasonable expectation that an approved FDPA is likely to be forthcoming.

The Company will adopt the ERCE reserves and resources figures at 31 December 2020 and they will be included in the Company’s 2020 Annual Report. The Company has developed a range of production scenarios for the Lancaster field to assist in financing and balance sheet recapitalisation discussions. While these scenarios incorporate different oil price and technical assumptions to those included in the ERCE Reserves figures tabulated above, they are within the ranges of Reserves and Contingent Resources estimated by ERCE.

Lancaster Contingent Resources (Hurricane 100% working interest)

The Development Unclarified Contingent Resources for the Lancaster field are contingent on Hurricane finalising a commercially viable further development plan if the P8 well is drilled, Hurricane being able to fund and execute this development plan during the lifetime of the Lancaster field and obtaining regulatory consents. As such, there can be no certainty of any further activity in relation to the Lancaster field.

Greater Warwick Area Reserves and Resources
Lincoln discovery (Hurricane 50% working interest)

The Lincoln prospect was originally drilled by Hurricane in 2016 and, although hydrocarbons were encountered, the well was not successfully tested. The Lincoln discovery was appraised in 2019 and flowed hydrocarbons to surface. Appraisal is at an early stage and there is currently no development plan for the discovery. ERCE has attributed Contingent Resources, Development Unclarified, to the Lincoln discovery, assuming water injection is implemented as part of any future development.

The Development Unclarified Contingent Resources for the Lincoln discovery is contingent on Hurricane completing any required appraisal drilling, finalising a commercially viable development plan, being able to fund and execute this development plan and obtaining regulatory and partner consents. As such, there can be no certainty of any further activity in relation to the Lincoln discovery.

Warwick Crest discovery (Hurricane 50% working interest)

The Warwick Crest discovery was drilled in 2019 and hydrocarbons were successfully flowed to surface. Appraisal is at an early stage and there is no development plan for the discovery. ERCE has attributed Contingent Resources, Development Unclarified, to the Warwick Crest discovery assuming water injection is implemented as part of any future development.

The Development Unclarified Contingent Resources for the Warwick Crest discovery are contingent on Hurricane completing any required appraisal drilling, finalising a commercially viable development plan, being able to fund and execute this development plan and obtaining regulatory and partner consents. As such, there can be no certainty of any further activity in relation to the Warwick Crest discovery.

Halifax (Hurricane 100% working interest)
No Contingent Resources are attributed by ERCE to the Halifax well drilled in 2017. At 31 December 2020, c.$35 million of the Company’s balance sheet intangible exploration and evaluation assets represented the historical cost incurred at Halifax to date. The Company now expects that the Halifax carrying value will be fully written off in its audited accounts for the year ended 31 December 2020.


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