14th Jul 2021 11:56
(Alliance News) - Hurricane Energy PLC provided an operational and financial update on Wednesday, indicating consistent but reduced Lancaster field production volumes and reasonable revenue for the second quarter.
The Surrey, England-based oil & gas company said its sole remaining Lancaster field well, P6, produced at an average oil rate of 10,640 barrels of oil per day in June, slightly below the company's expectation of 11,000 barrels.
Hurricane noted a small up-tick so far in July, with P6 producing 10,900 barrels of oil each day with a water cut of 32%.
Before its pump was tripped and quickly repaired in early June, the P6 well produced an average of 11,370 barrels of oil per day through May and 10,100 barrels through April.
However forecasts, also reported in April, significantly downgraded the reserves and resources associated with the Lancaster field after its structure proved more complex than initially anticipated.
After the company closed its P7z well in late 2020, the P6 well produced 12,300 barrels of oil per day on artificial lift with a 23% water cut.
Lancaster produced an average of 13,900 barrels of oil per day in 2020, up 7.8% from 12,900 daily barrels in 2019.
Hurricane's Lancaster field production hit 319,000 barrels in June, with an average water cut of 31%.
In mid June, 530,000 barrels were lifted by its twenty-third cargo of Lancaster oil, the company noted.
Two liftings of Lancaster crude oil in the second quarter ended June 30, produced revenue of USD69 million, the firm added .
In comparison, Hurricane brought in annual revenue of USD180.1 million in 2020 and USD170.3 million in 2019.
Hurricane's average realised oil price of USD66 per barrel was 4.3% lower than the Brent crude oil price of USD69 per barrel in the same period.
Net working capital increased by USD9 million, largely due to the obligatory plug-and-abandon of its Lincoln-14 well that the company completed last week. The closure of Lincoln-14 cost Hurricane around USD6.5 million.
Meanwhile, Hurricane spent USD36 million on operating costs in second quarter, plus net cash capital expenditure of USD1 million and USD4 million spent on convertible bond coupon payments.
Overall, the company said it had USD134 million in net free cash on June 30, up 5.5% from USD127 million on March 31.
Hurricane noted that its net cash figure does not take into account future liabilities and, as such, it is not all available to repay its convertible USD230 million in bonds maturing in July 2022.
A restructuring plan, proposed by Hurricane's board, to repay bondholders was recently rejected by High Court of Justice of England & Wales on June 28.
Shareholders did not approve of the scuttled plan, which would have resulted in massive dilution of their interests in the company by transferring 95% of the company to bondholders following a debt to equity conversion.
Shares in Hurricane Energy were trading down 0.6% at 3.23 pence each in London at midday, but are up 32% so far in 2021.
By Scarlett Butler; [email protected]
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