24th Mar 2020 18:51
(Alliance News) - Hurricane Energy PLC said Tuesday it is postponing its Capital Markets Day, scheduled for Wednesday, but noted its Lancaster Early Production System is producing in line with expectations.
Sharesin Hurricane closed 26% higher in London on Tuesday at 13.62 pence each.
Hurricane said the fallout from Covid-19 has been "unprecedented" and it expects the oil industry to face further challenges.
"Operators on the UK Continental Shelf have faced increasing challenges from travel restrictions on the offshore workforce and a significantly depressed oil price," Hurricane said.
The company continued: "Whilst the Lancaster Early Production System has cash operating costs of USD17 per barrel at current production levels and oil prices, operating cash flow from the Lancaster EPS will be materially lower than previously forecasted for an indeterminate period."
Hurricane said it has a "strong" balance sheet, which includes USD164.2 million of unrestricted cash, as of March 18. This, the company said, will allow it to weather the current downturn.
"However, should this change in the market environment persist, it is likely to have a material impact on our capacity to fund capital expenditure," Hurricane noted.
Oil production from the Lancaster EPS continues in line with previous updates, at approximately 20,000 barrels of oil per day, Hurricane said. Guidance for 2020 remains at 18,000 barrels of oil per day, taking into account an assumed 90% uptime and production to date.
Chief Executive Robert Trice said: "Covid-19 has had an unprecedented impact on all aspects of daily life. Having already cancelled the in-person element of the CMD, we were looking forward to providing a detailed update by webcast. The latest restrictions make even that unviable.
"2019 proved to be a transformational year for Hurricane. The market environment and the oil industry in 2020 pose significant challenges but we continue to see good production performance and data gathering at Lancaster, at low operating costs. Our understanding of the reservoir continues to improve day by day and I look forward to reporting on this once the rearranged CMD is able to be held."
By Paul McGowan; [email protected]
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