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Hurricane Energy has wind in its sails as production work restarts at key site (HUR)

Hurricane Energy (LSE:HUR) announced yesterday that a successfully fast-tracked boulder relocation programme had enabled work to continue at its Lancaster offshore field, which is targeting first oil in H1 2019. The programme had to be carried out after site surveys at Lancaster found boulders near areas where the firm is planning early production system subsea infrastructure. The corrective work was originally slated to begin in Q2 this year but Hurricane brought it forward to 2017 to take advantage of good market rates and the availability of vessels needed for the operation. What’s more, Hurricane said bringing it forward to 2017 reduced installation and execution risk this year.

The business said a review of the programme after completion in November has found that there is now an acceptable seabed condition for the installation of a mooring system at the early production system. It has also been decided that a further dedicated boulder relocation programme will not be required before beginning subsea installation operations at Lancaster in Q2 and Q3 this year. That being said, Hurricane added that if any additional boulders are encountered during the subsea installation, they will be relocated as required.

The Lancaster field is the most appraised asset in all of Hurricane’s acreage, concentrated on the Rona Ridge, west of Shetland. The field has combined 2P reserves and 2C contingent resources of 523MM stock tank barrels of oil. Hurricane is currently nearing the first phase of development at Lancaster through an early production system that is targeting first oil in H1 2019. Hurricane’s share price was off 1.2pc, or 0.4p, at 32.3p on today’s news.

Chief executive Dr Robert Trice said: ‘“I am pleased that the boulder relocation works completed in 2017 are sufficient to allow us to continue with our 2018 operations without the requirement for another dedicated boulder relocation programme. This positive news further de-risks our installation programme and brings us closer to our planned first oil date. I would like to take this opportunity to thank Bluewater for their timely review and our continued constructive working relationship.’

Earlier this month, the company hailed a ‘significant milestone’ in Lancaster’s development, after receiving two horizontal Xmas tree systems and the control system for the floating production storage and offloading vessel.

Hurricane’s other assets include Warwick, which has best case Prospective Resources of 935MM stock tank barrels of oil, Whirlwind, which has 2C Contingent Resources of 205MM barrels of oil equivalent (under the Whirlwind oil case) and Strathmore, which has 2C Contingent Resources of 32MM stock tank barrels of oil. Together, this brings Hurricane’s total combined 2P Reserves and 2C Contingent Resources to 2.6 billion barrels of oil equivalent.

Author: Daniel Flynn

Disclosure: The author does not own shares in the companies mentioned.

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