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, 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.
