Hurricane Energy plc, the UK based oil and gas company, provides its 2022 interim report and unaudited half-year results for the six-month
period ended 30 June 2022.
- Revenues of $159.5 million from three liftings of Lancaster crude (H1 2021: $124.5 million from four liftings)
- Cash production costs† of $35.4/bbl (H1 2021: $24.8/bbl) in line with expectations
- Generated $110.1 million of operating cash flow (H1 2021: $75.9 million), equivalent to $67.5/bbl (H1 2021: $37.9/bbl)
- Profit after tax for the period of $67.0 million (H1 2021: $42.8 million)
- Net cash† at 30 June 2022 of $48.4 million (31 December 2021 net debt: $27 million) - repaid $78.5 million Convertible Bonds plus $1.5 million of accrued interest after the period end to become debt free
- Net free cash† of $126.9 million at 30 June 2022 (31 December 2021: $51.5 million) ($76.6 million as at 31 August 2022 following repayment of the Convertible Bonds and the July lifting)
- Restricted cash of $60.8 million at 30 June 2022 relating to decommissioning obligations and FPSO charter (31 December 2021: $45.7 million) - Restricted cash is in addition to Net free cash
- Excellent operational performance at the Aoka Mizu FPSO with an average Lancaster field production uptime of 98% in H1 2022 (H1 2021: 96%)
- Lancaster EPS production averaged 9,000 bopd for H1 2022 (H1 2021: 11,100 bopd) in line with expectations
- Annual planned maintenance shutdown successfully carried out in September, with next lifting scheduled for early October 2022
- Philip Wolfe appointed Chair in March 2022, replacing John Wright who remains as a Non-Executive Director
- Juan Morera appointed to the Board as a Non-Executive Director in March 2022, representing Crystal Amber, Hurricane's largest shareholder
- Linda Beal appointed to the Board as an Independent Non-Executive Director in May 2022, taking on the role of Audit and Risk Committee Chair
- Robin Allan appointed to the Board as an Independent Non-Executive Director in July 2022, taking on the role of ESG Committee Chair
- Hurricane passed a key milestone with its repayment of the outstanding Convertible Bonds post-period end in July 2022, and is focused on building a positive long-term future for the benefit of all stakeholders
- Management will identify and pursue opportunities for the most effective capital allocation of its funds
Antony Maris, Chief Executive Officer of Hurricane, commented:
"Repaying our Convertible Bonds and becoming debt-free has enabled us to consider multiple trajectories for Hurricane's future. At the same time as ensuring continuing production from Lancaster, we have been working diligently on many workstreams, all with the aim of creating additional value for our shareholders.
In terms of Lancaster, continuing our close collaboration with our FPSO operator, we have been able to deliver superb uptime performance, leading to the production of more oil in the period. Our team can be justifiably proud of the fact that we bettered our targets set for the shutdown and unplanned downtime without at any time compromising the safety of our operations.
Looking to Lancaster's future, we have expended considerable effort and some funds into maintaining the ability to deliver a new well in the Lancaster Field, termed P8, in order to meet our "maximum economic recovery" obligations to the UK Government. Given our emissions challenges, we have worked closely with the UK's offshore regulator, the North Sea Transition Authority ("NSTA"), to plot a way forward for Lancaster. It is disappointing that despite the enormous efforts of our team, and extensive interactions over many months, the NSTA is unable to provide comfort to the Company with regard to the likelihood of it being granted the necessary consents related to flaring for Hurricane to make further commitments to investment in Lancaster.
In parallel, however, we have been pursuing alternative capital allocation opportunities outside of our existing asset base - a task which is challenging owing to the current market volatility - and one that we can now focus on completely.
With our strong balance sheet, no debt, and our decommissioning liabilities being fully funded, I believe Hurricane, with our committed and capable team, is well placed to be able to create additional value for our shareholders."