Trading, Operational, Financial & FSP Update

RNS Number : 3153M

Hurricane Energy PLC

11 January 2023

 

11 January 2023

Hurricane Energy plc

("Hurricane" or the "Company")

Trading, Operational, Financial and Formal Sales Process Update

Hurricane Energy plc, the UK based oil and gas company, provides a trading and operational update ahead of its results for the year ended 31 December 2022. This information is unaudited, and subject to further review and adjustments.  Also provided is an update on the ongoing formal sales process.

Trading Update

· Production and oil sales for the year ended 31 December 2022:

o  Production: 3.1 MMbbls (average of 8,464 bopd)

o  Oil sales: 3.2 MMbbls across 6 cargoes

· Operations

o  Aoka Mizu FPSO uptime of 99% during 2022

· Key financials for the year ended 31 December 2022

o  Revenue: $311 million (2021: $241 million)

o  Average realised oil price: $97/bbl (2021: $67/bbl)

o  Year-end net free cash⁽¹⁾: $122 million

1. Unrestricted cash and cash equivalents, plus current financial trade and other receivables, current oil price derivatives, less current financial trade and other payables.

Lancaster Field Operations Update

The following table details production volumes, water cut and minimum flowing bottom hole pressure for the 205/21a-6 ("P6") well during December 2022.

December 2022 Lancaster Field Data

	P6	P7z(2)
O il produced during the month (Mbbls)	246	-
Average oil rate (bopd)	7,951	-
W ater produced during the month (Mbbls)	251	-
A verage water cut(3)	50%	-
Well gauge p ressure (psia)(4)	1,514	-

2.  The 205/21a-7z ("P7z") well was not on production during December 2022

3.  Expressed as total water produced divided by total fluid (oil and water) production

4.  Pressure reported is the monthly minimum from well downhole gauge

As of 9 January 2023, Lancaster was producing c.7,800 bopd from the P6 well alone with an associated water cut of c.51%.

The 32^nd cargo of Lancaster oil, totalling approximately 544Mbbls, was lifted on 10 December 2022. This cargo was priced by reference to the average of the last five days of December 2022's Dated Brent quotes, being $81.0/bbl. The next cargo is anticipated to be lifted in mid-February 2023.

Financial Update

As of 31 December 2022, the Company had net free cash⁽¹⁾ of $122 million, including the revenue from the December 2022 lifting.

2023 Production Guidance  

Management's production guidance for the full calendar year 2023 is 5,900 - 7,100 bopd.  This assumes FPSO production planned uptime of 96.5% and production from the P6 well alone on artificial lift via ESP.  Guidance also includes the impact of an annual maintenance shutdown, anticipated to occur during Q3 2023. 

Formal Sales Process Update

Hurricane has conducted a thorough process to identify interest in the Company's assets. Hurricane invited participants in the formal sales process (the "FSP") to submit indicative proposals by 7 January 2023. Hurricane has received multiple proposals from credible counterparties, which were fully compliant with the requirements of the FSP, as well as a number of less defined expressions of further interest. It should be noted that all of the proposals received were highly conditional and subject to further due diligence. In addition, each proposal contains a structured element requiring further clarification and assessment by Hurricane and its advisers.

There can be no certainty as to the level of any offers resulting from the FSP, if any. Hurricane will provide further updates in due course.

Hurricane will provide an update on the proposed requisition of a general meeting of shareholders by Crystal Amber Fund Limited by close of business on 12 January 2023.

Antony Maris, Chief Executive Officer of Hurricane, commented:

"2022 has been highly eventful and highly successful. Working closely alongside our FPSO operator we have delivered superb uptime performance and produced towards the upper end of our annual production target. The field has now produced more than 15 million barrels and, with our deep understanding of the depletion dynamics of the field, we expect to continue this excellent performance in 2023.

This strong performance coupled with oil prices has allowed us to finish the year with a robust balance sheet, no debt and fully funded decommissioning liabilities. This, together with our experienced, committed and capable team and profitable ongoing production, provides an excellent platform to create future value for shareholders.

It was disappointing that despite the enormous efforts of our team, and extensive interactions over many months, we could not get the required comfort from the regulatory authorities to invest in additional production from Lancaster. However, alongside our operational activity, we have been active in the M&A market both through our own formal sales process and in seeking new assets for our own portfolio.

We continue our work on the FSP which we are focused on bringing to a successful conclusion, albeit there can be no certainty as to its outcome. We are pleased by the strong interest we have seen thus far.

This coming year brings its own challenges and we look to deliver both near term shareholder returns through either the successful outcome of the formal sale process or with a substantial capital return programme, as well as creating additional value for our shareholders."

-ends-

Contacts: 

Hurricane Energy plc Antony Maris, Chief Executive Officer [e-mail]	[phone]
Stifel Nicolaus Europe Limited Nominated Adviser & Joint Corporate Broker Callum Stewart / Jason Grossman	[phone]
Investec Bank plc Joint Corporate Broker Chris Sim / Charles Craven / Jarrett Silver	[phone]
Vigo Consulting Public Relations Patrick d'Ancona / Ben Simons [e-mail]	[phone]

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.

Visit Hurricane's website at www.hurricaneenergy.com

Glossary

bopd	Barrels of oil per day
Mbbls	Thousand barrels
psia	pounds per square inch absolute
R&D	Research and development

 

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.

 

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