17th Jun 2021 12:45
(Alliance News) - Hurricane Energy PLC said the UK Oil & Gas Authority has approved its Lancaster Field development plan addendum, satisfying a key condition of its proposed financial restructuring.
The Surrey, England-based oil producer said the regulator provided initial consent for a three month period stretching Wednesday to September 15.
Approval, together with associated production, flare, and vent consents, allows for production at the Lancaster oil field with a flowing bottom hole pressure of up to 300 pounds per square inch below the bubble point pressure of the fluid, which is 1,605 pounds per square inch absolute at 1,240 metres true vertical depth in the well.
Approval is conditional on the company guaranteeing that no liberated gas is allowed to surface. Hurricane will give the regulator data to demonstrate it has complied with its terms.
Production, flare, and vent consents will be issued on a three-monthly basis.
"This approval, whilst not having any immediate impact on the reservoir performance of the Lancaster field, will assist with longer term reservoir management, enabling us to optimise the field's performance. Approval now, while we still have some months before we reach bubble point, will allow both us and the Oil & Gas Authority to establish base line performance and to test the three-month approval process," Chief Executive Antony Maris said.
The regulator's approval satisfies a key condition of Hurricane's financial restructuring, proposed in April following talks with its bondholders who own 69% of the company's USD230 million convertible bonds due in July 2022. Given the diminished expectations of the Lancaster field, Hurricane considered that it was unable to repay the bondholders and initiated financial restructuring of the debt on April 30.
At the company's general meeting last Friday, 92% of shareholders voted against resolution to approve the restructuring plan. However, the company noted that as the plan was approved at the bondholder meeting it will go ahead regardless of the shareholder resolution - as long as the High Court of Justice of England and Wales sanctions the restructuring. A hearing at the high court is currently scheduled for June 21.
Hurricane Energy shares were trading down 0.2% at 1.25 pence each in London on Thursday afternoon. The stock is down 50% so far in 2021.
By Scarlett Butler; [email protected]
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