6th Feb 2020 11:07
(Alliance News) - Shares in Hurricane Energy PLC dropped on Thursday as one of its wells in the Greater Warwick Area project in the UK North Sea came under threat of being plugged and abandoned.
Shares in the Surrey-based oil & gas company were 15% lower at 17.99 pence on Thursday in London.
In the third quarter of 2019, the 205/26b-14 well - also known as the Lincoln Crestal well - was drilled and tested to a maximum stable flow rate of 9,800 stock tank barrels of oil per day.
Hurricane Energy, in partnership with Spirit Energy Ltd, had first secured regulatory consent for the suspension of the well to conduct pressure build-up tests and gather interference data, on the condition that the well be abandoned by June 22.
Hurricane Energy is looking to delay the abandonment of the Lincoln Crestal well, to gain more interference data during well testing in 2020.
However, the company has concluded that it would not be able to tie-back the well to the Aoka Mizu floating production storage and offloading unit in 2020, leading to the installation vessels to carry out the work under contract with the oilfield service provider being released.
As a result, if Hurricane Energy is unable to gain approval from the Oil & Gas Authority to extend the suspension consent, the Lincoln Crestal well will be plugged and abandoned in March.
Hurricane Energy said it still intends to make use of the Aoka Mizu FPSO's oil throughput capacity, and as part of this is planning to accelerate its work programme for the Greater Lancaster Area, also in the UK North Sea.
Th Lancaster programme is focused on drilling an additional production well, as well as drilling one or more subvertical wells to determine the maximum extent of the Lancaster field.
A rig contact is being negotiated for the drilling and testing of a production well - dubbed the Lancaster-8 well - on the licence during the second and third quarter of 2020.
Should the programme be successful, Hurricane Energy will look to tie-back the Lancaster-8 well to the Aoka Mizu FPSO in 2021, with first oil expected in the first quarter of 2022.
"We continue to focus on progressing opportunities towards full utilisation of the Aoka Mizu's throughput capacity. A further Lancaster production well would allow us to evaluate the productivity of another part of the Lancaster reservoir, away from the two existing wells, whilst aiming to deliver additional wholly owned production and reducing per barrel costs," said Chief Executive Robert Trice.
By Dayo Laniyan; [email protected]
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