SHETLAND-focussed Hurricane Energy has said experts have concluded its flagship Lancaster field may contain more oil than expected.
However, shares in Hurricane fell around four per cent yesterday when the company said production from Lancaster is expected to fall.
Hurricane said experts at the ERC Equipoise consultancy consultancy had concluded that Lancaster held 2.4 million barrels more reserves than thought. It said the increase reflected an improvement in expected future production and an increase in the economic life of the field aided by higher oil prices.
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ERC Equipoise reckons Lancaster contained 5.8 million barrels reserved on the industry standard proved and probable basis at December 31. Hurricane produced 3.7m barrels oil from Lancaster last year.
The consultancy concluded that Lancaster may also contain up to 87m barrels contingent resources. Further drilling and commercial assessment work would have to be done before these could be classed as reserves.
Hurricane produced an averaage 9,689 barrels oil per day (bopd) from Lancaster in the six months to March 31. It welcomed continued excellent uptime on the floating production storage and offloading vessel (FPSO) used on the field. Production rates from the well concerned were towards the upper end of the expected range.
The company said production guidance for the full calendar year 2022 is 7,500 – 8,600 bopd. The guidance includes the impact of an annual maintenance shutdown, which is expected to be completed in the third quarter.
Chief executive Antony Maris said: “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."
Hurricane shares closed down 0.4p at 10.94p. They sold for 60p in June 2019 after Hurricane started production from Lancaster. The firm generated interest in the Shetland area by making finds such as Lancaster in an under-explored layer of granite but went on to cut estimates of the size of the discoveries.
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The company came close to being taken over by creditors last year before the High Court in London rejected the restructuring plan concerned.
Hurricane has been able to reduce its debts since then after benefitting from the sharp increase in the oil price that was fuelled by the recovery from the pandemic.
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