Embargoed: 0700hrs 3 July 2014
Hurricane Energy plc
("Hurricane" or the "Company")
Successful Demobilisation of Drilling Unit
Hurricane Energy plc (AIM: HUR), the UK-based oil and gas company focused on hydrocarbon resources in naturally fractured basement reservoirs, announces that it successfully demobilised the Transocean Sedco 712 semi-submersible drilling unit from the Lancaster horizontal appraisal well, West of Shetland, at 2100hrs on 1 July 2014. The Sedco 712 was under contract to Hurricane for 73.5 days - under the budgeted AFE of 75.9 days.
Whilst on location the drilling unit successfully drilled and tested a 1km horizontal section of the Lancaster fractured basement reservoir. The Lancaster Field, which is 100% owned by Hurricane, has estimated 2C Contingent Resources of 207 million barrels of oil equivalent (MMboe).
The Company anticipates making a further announcement following completion of the detailed technical analysis of the results from the well test by late Q3 2014.
Neil Platt, COO of Hurricane, commented: "I am extremely pleased to confirm completion of the drilling and testing campaign on the Lancaster horizontal appraisal well and the safe demobilisation of the drilling unit within the AFE duration. I should like to take this opportunity to thank all of our service partners - particularly Transocean Drilling UK Limited and SPD Limited (Hurricane's Well Management Company) - for their support and assistance during the campaign."
Notes for Editors:
Hurricane is an oil and gas company focused on hydrocarbon resources in naturally fractured basement reservoirs. The Company's focus is to discover, appraise and develop oil reserves in basement rock and has successfully found oil on the UKCS. The Company has 444-470 Mmboe of 2C Contingent Resources and 432-442 Mmboe P50 Prospective Resources on acreage it controls 100% under licences P1368, P1485, P1835 and P1884.
The Group completed an IPO on the AIM market on 4 February 2014.
Strategy and Focus
The Group's primary objective is to increase shareholder value through the exploration, appraisal and development of fractured basement reservoirs. The Directors' strategy to achieve this is as follows:
1) Concentrate on basement in proven petroleum systems
To date, the Group's basement exploration approach has been to focus on areas where oil had been found in basement structures by previous operators but not progressed on the basis that the prevailing opinion at the time was that such discoveries were not commercial. Once such potential areas have been identified, the Group undertakes a high grading process involving the evaluation of existing geotechnical data to establish if, and where, suitable prospects may be present.
The Directors believe this approach serves to reduce exploration risk on basement prospects by ensuring a working hydrocarbon system is present and by having available a comprehensive geotechnical database (both seismic and well data).
2) Regional focus on West of Shetland
Hurricane has established an attractive portfolio of exploration and appraisal projects, focused on fractured basement prospectivity West of Shetland. DECC believes that the West of Shetland/Atlantic margin contains the most significant remaining UK resources yet to be discovered, at approximately 7.9 billion boe. This prospectivity has led to the significant interest generated by the 27th Offshore Oil & Gas Licencing Round. The Directors believe that the potential scale of the recoverable resource within these fractured basement reservoirs presents the UK oil and gas industry with a significant opportunity to secure a material strategic asset.
3) Ownership and operatorship during exploration and early stage appraisal
Hurricane has maintained 100% ownership and operatorship of all of its assets to date. The Directors believe that this puts the Company in a strong position to invite other industry participants to participate in the assets and share costs, in preparation for field development that will lead to producing assets.
4) Maintain an influential equity position
As Hurricane progresses the Group's assets towards development it intends to seek potential partners through a farm-out or other process to assist in future development and implementation of the FDP whilst maintaining an influential equity position.
5) Opportunities to acquire exploration licences in existing and new regions
Hurricane intends to participate in applications for new licence areas where the Group will be able to apply its technical expertise in basement reservoir evaluation to create value for its Shareholders. The Directors believe that the Group's skill set and its track record to date leave it well positioned to secure further licences in countries with low geopolitical risk.