TIDMHUR

RNS Number : 7950B

Hurricane Energy PLC

16 February 2022

16 February 2022

Hurricane Energy plc

("Hurricane" or the "Company")

Operational and Financial Update

Hurricane Energy plc, the UK based oil and gas company, provides an update on Lancaster field operations and net free cash balances as of 31 January 2022.

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 January 2022.

January 2022 Lancaster Field Data

 
                                      P6     P7z(1) 
 O il produced during the month                - 
  (Mbbls)                             299 
                                    ------  ------- 
 Average oil rate (bopd)             9,639     - 
                                    ------  ------- 
 W ater produced during the month     196      - 
  (Mbbls) 
                                    ------  ------- 
 A verage water cut(2)                40%      - 
                                    ------  ------- 
 Well gauge p ressure (psia)(3)      1,595     - 
                                    ------  ------- 
 
   1.       The 205/21a-7z ("P7z") well was not on production during January 2022 
   2.       Expressed as total water produced divided by total fluid (oil and water) production 
   3.       Pressure reported is the monthly minimum from well downhole gauge 

As of 14 February 2022, Lancaster was producing c.9,500 bopd from the P6 well alone with an associated water cut of c.41%.

The 27(th) cargo of Lancaster oil, totalling approximately 530 Mbbls, was lifted on 25 January 2022. This cargo was priced by reference to the average of the first five days of January's Dated Brent quotes, being $81.4/bbl. The next cargo is anticipated to be lifted in late March 2022.

Financial Update

As anticipated, and in line with previous announcements, the Regulator has now formally requested that the Company lodge additional funds as decommissioning security. The Company remains in discussions with the Regulator as to the exact amount and timing of placing of these funds into trust which are currently expected to be up to GBP5.7 million ($7.7 million), later in Q1 2022. This will increase the amount of funds placed into trust, and which are therefore classified as restricted cash, from GBP28 million to GBP33.7 million.

During January, the Company received $3.2 million of cash rebates relating to R&D tax claims in respect of the 2019 tax year. An additional c.$1.3 million claim in respect of the 2020 tax year is still under review by HMRC but is anticipated to be received later in Q1 2022.

As of 31 January 2022, the Company had net free cash(4) of $85 million ($77.3 million after taking into account the above mentioned planned increase in restricted cash) compared to the last reported balance of $50 million as of 31 December 2021. $78.5 million of Convertible Bonds remain outstanding and due July 2022.

The Company believes that net free cash provides a useful measure of liquidity after settling all its immediate creditors and accruals and recovering amounts due and accrued from joint operation activities, outstanding amounts from crude oil sales and after settling any other financial trade payables or receivables. It should be noted that the net free cash is calculated as at the balance sheet date and does not take into account future liabilities that the Company is already committed to but have not yet been accrued. As such, not all of the net free cash would be available for repayment of the remaining outstanding Convertible Bonds at their maturity in July 2022.

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

-ends-

Contacts:

 
 Hurricane Energy plc 
  Antony Maris, Chief Executive Officer 
  communications@hurricaneenergy.com            +44 (0)1483 862820 
 Stifel Nicolaus Europe Limited 
  Nominated Adviser & Joint Corporate Broker 
  Callum Stewart / Jason Grossman               +44 (0)20 7710 7600 
 Investec Bank plc 
  Joint Corporate Broker 
  Chris Sim / Jarrett Silver                    +44 (0)20 7597 5970 
 
 Vigo Consulting 
  Public Relations 
  Patrick d'Ancona / Ben Simons 
  hurricane@vigoconsulting.com                  +44 (0)20 7390 0230 
 

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.

Hurricane also has a 50% interest in the Greater Warwick Area licence, which contains the Lincoln and Warwick assets.

Visit Hurricane's website at www.hurricaneenergy.com

Glossary

 
 bopd        Barrels of oil per day 
 Mbbls       Thousand barrels 
            =============================================== 
 psia        pounds per square inch absolute 
            =============================================== 
 Regulator   Department for Business, Energy and Industrial 
              Strategy 
            =============================================== 
 

Inside Information

This announcement does not contain inside information.

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END

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February 16, 2022 02:00 ET (07:00 GMT)

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