REG - Hurricane Energy PLC - Trading, Operational, Financial & FSP Update

Hurricane EnergyAnnouncement

11/01/2023 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230111:nRSK3153Ma&default-theme=true

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))
 Oil produced during the month (Mbbls)    246    -
 Average oil rate (bopd)                  7,951  -
 Water produced during the month (Mbbls)  251    -
 Average water cut((3))                   50%    -
 Well gauge pressure (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                             +44 (0)1483 862820

 Antony Maris, Chief Executive Officer

 communications@hurricaneenergy.com

 Stifel Nicolaus Europe Limited                   +44 (0)20 7710 7600

 Nominated Adviser & Joint Corporate Broker

 Callum Stewart / Jason Grossman

 Investec Bank plc                                +44 (0)20 7597 5970

 Joint Corporate Broker

 Chris Sim / Charles Craven / Jarrett Silver

 Vigo Consulting                                  +44 (0)20 7390 0230

 Public Relations

 Patrick d'Ancona / Ben Simons

 hurricane@vigoconsulting.com

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
(http://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.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  UPDFFFELLTIILIV