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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Hurricane Energy Plc | LSE:HUR | London | Ordinary Share | GB00B580MF54 | ORD 0.1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 7.79 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMHUR
RNS Number : 3962E
Hurricane Energy PLC
08 May 2017
8 May 2017
This announcement contains inside information
Hurricane Energy plc
("Hurricane" or the "Company")
Publication of Competent Person's Report
Significant upgrade to resources and first reserves
Hurricane Energy plc, the UK based oil and gas company focused on hydrocarbon resources in naturally fractured basement reservoirs, is delighted to report the publication of an updated Competent Person's Report ("Lancaster CPR") by RPS Energy Consultants Limited ("RPS") concerning reserves and resources at the company's Lancaster field ("Lancaster"), West of Shetland, which attributes 2P reserves for the first time and details a highly significant increase in certified contingent resources. The CPR only concerns the Lancaster field within Licence P.1368 Central, at present. Resource estimates for the Greater Lancaster Area, and broader portfolio, are expected to be published by the end of the year.
Highlights:
-- Best estimate recoverable volumes of 523 million barrels of oil, an increase of 162% compared to the 2013 CPR 2C contingent oil resource figure
-- 2P reserves of 37.3 million barrels of oil attributed to the initial six-year period of the planned Early Production System ("EPS") at Lancaster
-- The remaining 484 million barrels are classified as 2C Contingent Resources as 'Development Unclarified or On Hold' whilst the EPS assesses full field development potential
-- Should Hurricane extend the EPS to ten years, 2P reserves volume would rise to 62.1 million barrels
-- Best estimate of oil in place of over 2.3 billion barrels of oil, an increase of 120% compared to the equivalent 2013 CPR figure
-- An NPV of $525 million is attributed to the 2P reserves for a six-year EPS at a 10% discount rate
Since its 2013 CPR , the Company has successfully drilled five wells in its licences in the area (including a horizontal sidetrack). At Lancaster, this included drilling and testing 205/21a-7 (the "Pilot Well"), and two 1km horizontal production wells, 205/21a-6 (the "6 Well") and 205/21a-7Z (the "Horizontal Sidetrack Well"). The Pilot Well confirmed the presence of oil significantly below structural closure and successful Drill Stem Tests were carried out on both the 6 Well and the Horizontal Sidetrack Well, producing at maximum stable rates of 9,800 stb/d and 15,375 stb/d respectively (using Electric Submersible Pumps). These wells significantly improved the Company's understanding of the reservoir and expected performance of the first phase of Lancaster's development, the EPS.
RPS assigns combined 2P reserves plus 2C resources of 523 million barrels of oil to Lancaster, based on a recovery factor of 22.5%. This is an increase of 162% compared to the 2013 estimate of 200 million barrels of oil. The Lancaster CPR attributes 2P reserves at the field, with 37.3 million barrels of oil to be produced by the planned EPS, assuming output duration of six years. The six-year base case duration of the EPS is based on the assumption that this allows sufficient time for the full field development to be planned and commenced. The Lancaster CPR notes that the 2P reserve volume would rise to 62.1 million barrels of oil should Hurricane extend the EPS to ten years. The basis of design for the EPS is for ten years and it has been agreed with Bluewater Energy Services that the contract for the Aoka Mizu FPSO would include an extension option for up to ten years. The Company therefore sees no technical impediments to extension to ten years, should it be deemed commercially attractive to do so bearing in mind other operations on Lancaster and Hurricane's other assets.
The Company has published the full CPR to its website.
The table below is a summary of the resources evaluated by RPS for Lancaster within Licence P.1368 Central.
Hot Features
Premium
Initially In-Place Reserves(2, Contingent Resources(4,5)
Volumes(1) 3)
------------- ------------------------- -------------------- ------------------------------
Gross (100% Gross (100% Gross (100%
basis) and basis) and Net basis) and Net
Net Attributable(6) Attributable Attributable
Resources(6) Resources(6)
------------- ------------------------- -------------------- ------------------------------
Low Best High 1P 2P 3P 1C 2C 3C
------------- ------- ------- ------- ------ ----- ----- -------- -------- ----------
Oil (MMstb) 1,571 2,326 3,333 28.1 37.3 49.3 129.1 486.1 1,116.7
------------- ------- ------- ------- ------ ----- ----- -------- -------- ----------
Notes
Table shows discovered in-place volumes, reserves
and contingent resources as of 1(st) January
2017, as per Table 1 in the CPR from RPS dated
02 May 2017
(1) In Place Volumes quoted on an on block basis.
Quoted values are totals of probabilistic volumes
for Rona, Victory and Basement reservoirs.
(2) Reserves based on six-year EPS duration.
(3) In the event of Hurricane extending the EPS
duration from six to ten years, additional P90,
P50, P10 volumes of 16.4, 24.8 and 39.4 MMstb
respectively would be produced in these additional
four years which would then qualify as Reserves.
This assumes that operations continue without
interruption with the FPSO remaining on station
for this duration. In this scenario, 1C, 2C,
3C quoted above would drop by 16.4, 24.8 and
39.4 MMstb respectively.
(4) In the CPR dated 18th April 2013, Contingent
Resources for Lancaster were classified as 'Development
Pending'. With the EPS assessing full field development
potential, RPS now classify Lancaster Contingent
Resources as 'Development Unclarified or On Hold'.
(5) Contingent Resources associated with potential
full field development based on analogue recovery
factors (see Table 7.14 in the CPR).
(6) Hurricane's working interest in Licence P.1368
is 100% and therefore Gross (100% basis) and
Net Attributable volumes are the same.
----------------------------------------------------------------------------------------------
RPS places the following valuations on the Lancaster reserves at the RPS Base Oil Price, over a range of discount rates. The results are quoted to the end of the first option period of the FPSO charter, which coincides with the six-year planned EPS.
Summary of NPVs of reserves at RPS Base Price
Post Tax Net Present Value
Net Hurricane Share, (US$ Million,
MOD)
----------------- ------------------------------------------------------------------------------------------------- -----------------
Discount Reserve
Rate: 0.00% 5.00% 7.50% 10.00% 12.50% 15.00% Limit(1)
----------------- -------------- -------------- -------------- --------------- --------------- --------------- -----------------
1P 605 416 342 279 224 177 2024
----------------- -------------- -------------- -------------- --------------- --------------- --------------- -----------------
2P 1,006 728 619 525 444 374 2024
----------------- -------------- -------------- -------------- --------------- --------------- --------------- -----------------
3P 1,492 1,093 937 803 689 589 2024
----------------- -------------- -------------- -------------- --------------- --------------- --------------- -----------------
Notes
(1) Limited to the Lancaster EPS draft field
development plan period of six years, and the
expiry of the first option period of the FPSO
charter at 31 December 2024.
Oil Price Assumption
Economic valuation of and resources are linked
to a long term price forecast for Brent. The
RPS Base Case price used for all valuations presented
in their report, in money of the day terms, is
as follows.Year 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
---------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Lancaster
Base Case
(US$/stb) 50.50 56.00 58.30 61.60 65.70 71.80 75.20 78.90 83.87 85.63 87.42 89.25 91.12 93.02
---------- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
---------------------------------------------------------------------------------------------------------------------------------------
All Reserves and Resources definitions and estimates shown in this report are based on the 2007 SPE/AAPG/WPC/SPEE Petroleum Resource Management System ("PRMS").
Summary of total Hurricane reserves and contingent resources
RPS 2013 CPR(1) RPS 2017 Hurricane
- 2C Resources CPR - 2P Total 2P
Reserves Reserves
+ 2C Resources(2) + 2C Resources(5)
---------------- ------------------------------- ------------------- -------------------
MMstb / Oil / Oil
MMboe Oil Gas(3) Oil Equivalents Oil Equivalents
---------------- ---- ------- ---------------- ------------------- -------------------
Lancaster 200 7 207 523 523
---------------- ---- ------- ---------------- ------------------- -------------------
Whirlwind
(Oil Case)(4) 117 88 205 205
---------------- ---- ------- ---------------- ------------------- -------------------
Total(5) 317 95 412 728
---------------- ---- ------- ---------------- ------------------- -------------------
Notes
(1) RPS 2013 CPR figures are as per 19 November
2013 report, quoted on a block basis as of
1(st) October 2013 and before technical and
economic limit tests. Classified by RPS at
the time as 'Development Pending'. Excludes
Strathmore and Tempest/Typhoon.
(2) As of 1st January 2017, as per Table 1
in the CPR from RPS dated 02 May 2017; Reserves
based on six-year EPS duration. Contingent
Resources classified by RPS as 'Development
Unclarified or On Hold' and are the volumes
associated with potential full field development
based on analogue recovery factors.
(3) All figures in MMboe are with conversion
of gas based on 1 boe = 6,000 scf; Recoverable
gas is dry gas.
(4) Whirlwind figures are oil case rather than
gas condensate case (well test results from
205/21a-5 demonstrated the presence of hydrocarbons
but the nature of the discovered hydrocarbons
is unclear)
(5) PRMS recommends that for reporting purposes,
assessment results should not incorporate statistical
aggregation beyond the field, property or project
level. As such, the total figures that are
the product of arithmetic addition are not
statistically correct.
-------------------------------------------------------------------------------------------
Dr Robert Trice, Chief Executive of Hurricane, commented:
"We are delighted to now have independent verification of the highly material uplift in the resources we have at Lancaster. It is also a landmark for Hurricane to have reserves assigned at the field relating to our planned EPS, for which we continue to advance plans, maintaining our target for first oil of H1 2019. We expect to publish CPRs relating to Halifax and Lincoln later in 2017, which we are confident will be a material addition to our already significant resource base."
Contacts:
Dr Robert Trice (Chief
Executive Officer)/
Hurricane Alistair Stobie (Chief +44 (0)1483
Energy plc Financial Officer) 862 820
--------------------- -------------------------------- -------------------------
Nominated Adviser and
Joint Corporate Broker
Cenkos Securities Derrick Lee/Nick Tulloch/Beth +44 (0)131 220
plc McKiernan 6939
--------------------- -------------------------------- -------------------------
Joint Corporate Broker
Stifel Nicolaus Callum Stewart/Nicholas +44 (0)20 7710
Europe Limited Rhodes/Ashton Clanfield 7600
--------------------- -------------------------------- -------------------------
Vigo Communications Financial Public Relations +44 (0)20 7830
Patrick d'Ancona/Ben 9704
Simons hurricane@vigocomms.com
--------------------- -------------------------------- -------------------------
Competent Person:
The technical information in this release has been reviewed by Dr Robert Trice, who is a qualified person for the purposes of the AIM Guidance Note for Mining, Oil and Gas Companies. Dr Robert Trice, Chief Executive Officer of Hurricane Energy plc, is a geologist and geoscientist with a PhD in geology and has over 30 years' experience in the oil and gas industry.
Glossary
"1C" denotes a low estimate scenario
of Contingent Resources
----------------------- ---------------------------------
"2C" denotes a best estimate scenario
of Contingent Resources
----------------------- ---------------------------------
"3C" denotes a high estimate scenario
of Contingent Resources
----------------------- ---------------------------------
"boe" Barrels of oil equivalent
----------------------- ---------------------------------
"Contingent Resources" those quantities of petroleum
estimated, as of a given date,
to be potentially recoverable
from known accumulations by
application of development
projects, but which are not
currently considered to be
commercially recoverable due
to one or more contingencies
----------------------- ---------------------------------
"CPR" competent person's report
----------------------- ---------------------------------
"Early Production The Early Production System
System" or "EPS" phase of development of the
Lancaster field in licence
P.1368
----------------------- ---------------------------------
"FDP" field development plan
----------------------- ---------------------------------
"Lancaster CPR" The competent person's report
prepared by RPS in 2017 on
the Lancaster field
----------------------- ---------------------------------
"Oil" a mixture of hydrocarbons
of different molecular weight
----------------------- ---------------------------------
"PRMS" 2007 SPE/AAPG/WPC/SPEE Petroleum
Resource Management System
----------------------- ---------------------------------
"Resources" Contingent Resources, unless
otherwise specified
----------------------- ---------------------------------
"Reserves" those quantities of petroleum
which are anticipated to be
commercially recoverable by
application of development
projects to known accumulations
from a given date forward
under defined conditions,
reference should be made to
the full PRMS definitions
for the complete definitions
and guidelines
----------------------- ---------------------------------
stb stock tank barrels of oil
(where barrels of oil are
referred to in this document,
the references are to stock
tank barrels)
----------------------- ---------------------------------
"stb/d" stock tank barrels per day
----------------------- ---------------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCARMPTMBMMBRR
(END) Dow Jones Newswires
May 08, 2017 02:00 ET (06:00 GMT)
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