29 September 2021
Hurricane Energy plc
("Hurricane" or the "Company")
Production Guidance Update
Hurricane Energy plc, the UK based oil and gas company, provides an update on production guidance from the Lancaster field, which takes into account additional production and pressure data gathered since the annual maintenance shutdown in July 2021.
On 30 April 2021, the Company provided annual production guidance for the full year 2021 of 8,500 - 10,500 bopd. The Company continues to forecast that average production for the year is expected to remain within this range. This annual guidance is based on an FPSO production uptime assumption of 90% and production from the P6 well alone on artificial lift via ESP. The production uptime assumption of 90% includes the impact of the annual maintenance shutdown, evenly spread across the year.
As previously announced, the Company has committed to providing six-monthly updates on production guidance. Management's production guidance from the Lancaster field for the six month period 1 October 2021 to 31 March 2022 (the "Period") is 8,500 - 10,000 bopd, which is based on an improved FPSO production uptime assumption of 96.5% and production from the P6 well alone on artificial lift via ESP. The increase in the uptime assumption is a combination of there being no planned maintenance shutdowns anticipated in the Period, and reflecting the excellent production uptime that has been seen on the FPSO to date.
The guidance for the Period is slightly lower than the average for the full year 2021 due to the expected gradual production decline from the reservoir over time, partially offset by the higher FPSO uptime assumption.
Based on current trends, management estimates that wellhead flowing pressure in the Lancaster reservoir may reach the bubble point by the end of Q1 2022, consistent with the time range estimation previously announced on 25 May 2021. Whilst this has been factored into the guidance for the Period, there will remain a degree of uncertainty regarding the full impact of this, along with the risk that gas liberated from the reservoir could be produced which could result in production either being reduced or ceased altogether.
Antony Maris, CEO of Hurricane, commented:
"The Company has benefited from higher than expected oil prices and excellent performance to date of the FPSO. As a result of the combined efforts of the Hurricane and Bluewater teams, we anticipate being towards the upper end of our production guidance for 2021 and this is also reflected in our guidance for the next six months to 31 March 2022."
Hurricane Energy plc
Antony Maris, Chief Executive Officer
+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
+44 (0)20 7597 5970
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Patrick d'Ancona / Ben Simons
+44 (0)20 7390 0230
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
Barrels of oil per day
The pressure at which gas begins to come out of solution from oil within the reservoir
Electrical submersible pump
Floating production storage and offloading vessel
Pounds per square inch absolute
True vertical depth sub sea
This announcement contains inside information as stipulated under the market abuse regulation (EU no. 596/2014). Upon the publication of this announcement via regulatory information service this inside information is now considered to be in the public domain.
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 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.
On the 17 June 2021, the Company announced the UK's Oil and Gas Authority (the "OGA") approval of the Lancaster Field Development Plan Addendum (the "FDPA"). This approval, together with associated production, flare, and vent consents, enables production with the flowing bottom hole pressure up to 300 psi below the bubble point pressure of the fluid (1,605 psia at 1,240 metres TVDSS). These consents are subject to quarterly reviews of operating procedures to ensure gas liberated in the reservoir is not produced.