TIDMHUR

RNS Number : 3441I

Hurricane Energy PLC

14 April 2022

14 April 2021

Hurricane Energy plc

("Hurricane" or the "Company")

Competent Person's Report on the Lancaster Field & 2022 Production Guidance

Hurricane Energy plc, the UK based oil and gas company, announces that the updated Competent Person's Report ("CPR") on the Company's Lancaster Field by ERC Equipoise Ltd ("ERCE") has been published on the Company's website at:

https://www.hurricaneenergy.com/assets/reserves-and-resources

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 2021.

As shown in the tables below, ERCE have increased the estimated Lancaster Reserves. The 31 December 2021 position is partly due to an improvement in the expected future production and to an increase in the economic life of the field aided by higher oil prices, offset by the increased production during 2021.

2022 Production Guidance

On 29 September 2021, the Company provided production guidance for the six-month period 1 October 2021 to 31 March 2022 of 8,500 - 10,000 bopd, based on FPSO production uptime assumption of 96.5% and production from the P6 well alone on artificial lift via ESP. Production during this six-month period was 9,689 bopd, reflecting continued excellent uptime on the FPSO combined with production rates towards the upper end of the range.

Management's production guidance for the full calendar year 2022 is 7,500 - 8,600 bopd. This assumes FPSO production planned uptime of 96.5% and production from the P6 well alone on artificial lift via ESP. Guidance includes the impact of an annual maintenance shutdown, anticipated to occur during Q3 2022.

Antony Maris, CEO of Hurricane, commented:

"The efforts of the surface and subsurface teams in beating the mid-case performance target set at the start of the forecast period have been superb. Together with excellent uptime across all elements of the system has allowed the Company to benefit from the higher than expected oil prices and enabled more reserves to be added in the updated CPR. This supports management's production forecast for the years to come.

Going forward we look to maintain the excellent performance of both the well and the FPSO while we also focus on the Company's next steps."

Lancaster Reserves and Resources

ERCE's estimates of Reserves for the Lancaster field as of 31 December 2021

 
                     Gross              Net attributable 
                                         to Hurricane 
                     1P    2P    3P     1P     2P     3P 
Developed Reserves 
 (MMbbl)(1)          4.1   5.8   9.1    4.1    5.8    9.1 
NPV10 (US$m)(2)      40.0  70.8  117.4  40.0   70.8   117.4 
 

Notes:

1. In determining the economic Reserves for the Lancaster field, ERCE has assumed a nominal Brent oil price forecasts of US$75/bbl in 2022, US$71/bbl in 2023, US$69/bbl in 2024 and US$70/bbl in 2025. In line with PRMS guidelines, the nominal oil prices assumed are those forecasts made as at the effective date of the CPR, being 31 December 2021. Prices are escalated at 2.0% per annum inflation.

2. NPV10 equates to the net present value of cash flows from the Lancaster field at a 10% discount rate at the effective date of 31 December 2021

ERCE's estimates of Contingent Resources for the Lancaster field as of 31 December 2021

 
                           Gross             Net attributable 
                                              to Hurricane 
                           1C    2C    3C    1C      2C     3C 
Contingent Resources, 
 Development Unclarified 
 (MMbbl)(3)                11.3  35.4  86.9  11.3    35.4   86.9 
 

3. Contingent Resources, Development Unclarified, assume additional development wells and / or water injection is implemented as part of any further development; and contingent on regulatory consents, funding and execution during the lifetime of the existing Lancaster wells.

A summary of the movements in net attributable 2P Reserves as compared to the previous CPR (effective date of 31 December 2020) is as follows:

 
                                     Net attributable 2P Reserves 
                                      (MMbbl) 
At 31 December 2020                  7.1 
Produced during the year             (3.7) 
Change in assumptions and economic 
 life                                2.4 
At 31 December 2021                  5.8 
 

Review by Qualified Person

The technical information in this release has been reviewed by Antony Maris, Chief Executive Officer, who is a qualified person for the purposes of the AIM Guidance Note for Mining, Oil and Gas Companies. Mr Maris is a petroleum engineer with more than 35 years' experience in the oil and gas industry. He has a B.Sc.(Eng.) Petroleum Engineering (Hons) from the Imperial College of Science and Technology (University of London) Royal School of Mines A.R.S.M. and an MBA from Kingston Business School.

Contacts:

 
Hurricane Energy plc 
 Antony Maris, Chief Executive Officer 
 communications@hurricaneenergy.com            +44 (0)1483 862820 
Stifel Nicolaus Europe Limited 
 Nominated Adviser & Joint Corporate Broker 
 Callum Stewart / Jason Grossman               +44 (0)20 7710 7600 
Investec Bank plc 
 Joint Corporate Broker 
 Chris Sim / Jarrett Silver / Charles Craven   +44 (0)20 7597 5970 
 
Vigo Consulting 
 Public Relations 
 Patrick d'Ancona / Ben Simons 
 hurricane@vigoconsulting.com                  +44 (0)20 7390 0230 
 

About Hurricane

Hurricane has a 100% interest in and operates the Lancaster field, the UK's first field to produce from a fractured basement reservoir.

Hurricane also has a 50% interest in the Greater Warwick Area licence, which contains the Lincoln and Warwick assets.

Visit Hurricane's website at www.hurricaneenergy.com

Glossary

 
bopd    Barrels of oil per day 
ESP     Electric submersible pump 
FPSO    Floating production storage offloading vessel 
MMbbls  Millions of barrels of oil 
 

PRMS Definitions

 
1C                        Denotes low estimate of Contingent Resources. 
2C                        Denotes best estimate of Contingent Resources. 
3C                        Denotes high estimate of Contingent Resources. 
1P                        Denotes low estimate of Reserves (i.e., Proved 
                           Reserves). Equal to P1. 
2P                        Denotes the best estimate of Reserves. The 
                           sum of Proved plus Probable Reserves. 
3P                        Denotes high estimate of reserves. The sum 
                           of Proved plus Probable plus Possible Reserves. 
Contingent Resources      Those quantities of petroleum estimated, 
                           as of a given date, to be 
                           potentially recoverable from known accumulations 
                           by application of 
                           development projects, but which are not currently 
                           considered to be 
                           commercially recoverable owing to one or 
                           more contingencies. 
Contingent Resources,     A discovered accumulation where project activities 
 Development Pending       are ongoing to justify commercial development 
                           in the foreseeable future. 
Contingent Resources,     A discovered accumulation where project activities 
 Development Unclarified   are under evaluation and where justification 
                           as a commercial development is unknown based 
                           on available information. 
Developed Reserves        Reserves that are expected to be recovered 
                           from existing wells and 
                           facilities. Developed Reserves may be further 
                           sub-classified as Producing or Non- Producing. 
Economic Limit            Defined as the time when the maximum cumulative 
                           net cash flow (see Net Entitlement) occurs 
                           for a project. 
Net Entitlement           That portion of future production (and thus 
                           resources) legally accruing to an entity 
                           under the terms of the development and production 
                           contract or license. Under the terms of PSCs, 
                           the producers have an entitlement to a portion 
                           of the production. This entitlement, often 
                           referred to as "net entitlement" or "net 
                           economic interest" is estimated using a formula 
                           based on the contract terms incorporating 
                           costs and profits. 
Reserves                  Reserves are those quantities of petroleum 
                           anticipated to be commercially recoverable 
                           by application of development projects to 
                           known accumulations from a given date forward 
                           under defined conditions. 
 

Inside Information

This announcement is released by Hurricane Energy plc and contains inside information under Regulation (EU) 596/2014 on market abuse, as it forms part of domestic law by virtue of the European Union (Withdrawal) Act 2018 (the UK MAR). For the purpose of the UK MAR, this announcement is made by Antony Maris, Chief Executive Officer at Hurricane Energy plc.

, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

UPDEAFLDFFLAEAA

(END) Dow Jones Newswires

April 14, 2022 02:10 ET (06:10 GMT)

Hurricane Energy (LSE:HUR)
Historical Stock Chart
From Jul 2022 to Aug 2022 Click Here for more Hurricane Energy Charts.
Hurricane Energy (LSE:HUR)
Historical Stock Chart
From Aug 2021 to Aug 2022 Click Here for more Hurricane Energy Charts.