Hurricane Energy PLC Operational Update (4629H)
March 24 2020 - 2:27PM
UK Regulatory
TIDMHUR
RNS Number : 4629H
Hurricane Energy PLC
24 March 2020
24 March 2020
Hurricane Energy plc
("Hurricane" or the "Company")
Operational Update
Hurricane Energy plc, the UK based oil and gas company focused
on hydrocarbon resources in naturally fractured basement
reservoirs, provides an operational update following recent
developments in the UK government response to COVID-19.
Capital Markets Day 2020 Postponement
The Company had been due to host a Capital Markets Day ("CMD")
on 25 March 2020, to be conducted as a filmed webcast. Owing to the
recent intensification of restrictions on movement implemented in
the UK in response to COVID-19, it is no longer possible to host
the event as planned. A further update will be provided to the
market once a new date and format for this event has been
confirmed, taking into account government guidance on the nature
and duration of these restrictions as they evolve.
Oil and Gas Authority Statement Re: COVID-19
We have been reviewing government restrictions and industry
measures emplaced to combat the spread of COVID-19. We therefore
welcome today's announcement from the Oil and Gas Authority, the
regulator for the UK oil and gas industry, that it plans to take a
flexible approach and we have engaged with them on this basis.
Market Environment
The impact of COVID-19 is unprecedented and, as we previously
announced on 19 March 2020, we expect the oil industry to be
increasingly affected. Since then, operators on the UK Continental
Shelf have faced increasing challenges from travel restrictions on
the offshore workforce and a significantly depressed oil price.
Whilst the Lancaster Early Production System ("EPS") has cash
operating costs of $17 per barrel at current production levels and
oil prices, operating cash flow from the Lancaster EPS will be
materially lower than previously forecasted for an indeterminate
period. Hurricane has a strong balance sheet, including $164.3
million of unrestricted cash (at 18 March 2020) and is therefore in
a strong position to weather this current downturn. However, should
this change in the market environment persist, it is likely to have
a material impact on our capacity to fund capital expenditure.
Operational Update
Oil production from the Lancaster EPS continues in line with
previous updates, at approximately 20,000 barrels of oil per day.
Guidance for 2020 remains at 18,000 barrels of oil per day, taking
into account an assumed 90% uptime and production to date.
A more detailed update will be provided as part of the Company's
regular quarterly production reporting next due in early April.
Annual Report and AGM
Hurricane notes the recent announcement by the Financial Conduct
Authority on 21 March 2020 requesting that, as a result of COVID-19
uncertainties, all listed companies should observe a moratorium on
the publication of preliminary financial statements for at least
two weeks. Hurricane has already released its preliminary unaudited
results for the year ended 31 December 2019 and currently expects
no delay in releasing its annual report and accounts, containing
its audited results for the year ended 31 December 2019, in April.
However, the Company will closely monitor further measures should
they have an impact on our reporting timetable.
Hurricane's 2020 AGM is currently scheduled to take place on 3
June 2020 at the Royal Society in central London. We will continue
to monitor the potential impact of COVID-19 restrictions on the
feasibility of continuing to hold this event in the normal format.
We are examining possible different formats and venues, so as to be
able to proceed with the event whilst mitigating risks to those
involved. It is currently anticipated that all shareholders will be
encouraged to lodge their vote via proxy ahead of the AGM.
Dr Robert Trice, Chief Executive of Hurricane, commented:
"COVID-19 has had an unprecedented impact on all aspects of
daily life. Having already cancelled the in-person element of the
CMD, we were looking forward to providing a detailed update by
webcast. The latest restrictions make even that unviable.
"2019 proved to be a transformational year for Hurricane. The
market environment and the oil industry in 2020 pose significant
challenges but we continue to see good production performance and
data gathering at Lancaster, at low operating costs. Our
understanding of the reservoir continues to improve day by day and
I look forward to reporting on this once the rearranged CMD is able
to be held."
Contacts:
Hurricane Energy plc +44 (0)1483 862
Dr Robert Trice, Chief Executive Officer 820
Stifel Nicolaus Europe Limited
Nominated Adviser & Joint Corporate Broker
Callum Stewart / Ashton Clanfield +44 (0)20 7710 7600
Morgan Stanley & Co. International plc
Joint Corporate Broker
Andrew Foster / Tom Perry / Alex Smart +44 (0)20 7425 8000
Vigo Communications
Public Relations
Patrick d'Ancona / Ben Simons
hurricane@vigocomms.com +44 (0)20 7390 0230
About Hurricane
Hurricane was established to discover, appraise and develop
hydrocarbon resources associated with naturally fractured basement
reservoirs. The Company's acreage is concentrated on the Rona
Ridge, in the West of Shetland region of the UK Continental
Shelf.
The Lancaster field (100% owned by Hurricane) is the UK's first
producing basement field. Hurricane is pursuing a phased
development of Lancaster, starting with an Early Production System
consisting of two wells tied-back to the Aoka Mizu FPSO.
Hydrocarbons were introduced to the FPSO system on 11 May 2019 and
the first oil milestone was achieved on 4 June 2019.
In September 2018, Spirit Energy farmed-in to 50% of the Lincoln
and Warwick assets, committing to a phased work programme targeting
sanction of an initial stage of full field development.
Glossary
AGM Annual General Meeting
FPSO Floating production storage and offloading
vessel
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END
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