7 February 2017
This announcement contains inside information
Hurricane Energy plc
("Hurricane" or the "Company")
Results of Further Technical Analysis of
Lancaster 7, 7Z and Lincoln Wells
Hurricane Energy plc, the UK based oil and gas company focused on hydrocarbon resources in naturally fractured basement reservoirs, announces the results of further technical analysis of its Lancaster, Lincoln and Warwick fractured basement assets following the drilling of the Lancaster 7, 7Z and Lincoln wells in 2016.
· Lancaster oil down to of 1,620m TVDSS revised to oil water contact of 1,678m TVDSS
· Lancaster hydrocarbon column height in excess of 670m TVDSS
· Lancaster maximum stable flow rate refined upwards to 15,375 STB/day using an ESP
· Lincoln discovery is a separate hydrocarbon accumulation to Lancaster, separated by the Brynhild fault
· Warwick now believed to be part of large basement feature comprising Lincoln and Warwick
The previously published minimum oil down to from the Lancaster 205/21a-7 well of 1,620m TVDSS has now been revised to a best technical case oil water contact of 1,678m TVDSS, with an associated hydrocarbon column height in excess of 670m TVDSS.
This revised interpretation is based on the integration of wireline sample oil analysis, wireline logs, gas chromatography data, sidewall cores and the integration of Lancaster pressure and fluid data. The revised OWC (1,678m TVDSS) can be correlated with the Company's previously held high case OWC from the 205/21a-4 well (drilled in 2009). Consequently, the Company believes that the revised 205/21a-7 OWC can be treated as a flat OWC for the Lancaster field. As such, the Company believes that its previous management resource guidance for the Lancaster field being in excess of 300 million barrels is conservative; and that the forthcoming CPR on the Lancaster field will result in a material uplift in Contingent Resources as well as the anticipated reserves associated with the planned early production system. The CPR is being prepared based on the 2007 SPE/AAPG/WPC/SPEE Petroleum Resource Management System.
Hurricane previously reported a flow rate of at least 14,500 STB/day in the Lancaster 205/21a-7Z well which has now been refined to a maximum stable rate of 15,375 STB/day using an ESP, following third party interpretation of the flow meter data.
The ODT in the Lincoln discovery of 2,258m TVDSS demonstrates that it is a separate hydrocarbon accumulation to Lancaster, with the Lancaster field and Lincoln discovery being separated by the Brynhild Fault Zone. The separation of Lancaster from Lincoln has no impact on the Company's resource estimation for Lancaster. Furthermore, the ODT at Lincoln has provided the Company with sufficient evidence to believe that the undrilled Warwick prospect is most likely part of a large basement feature comprising both Lincoln and Warwick. Should these interpretations be confirmed through further drilling and testing it is anticipated that a Lincoln/Warwick accumulation will be assigned a separate field status to Lancaster.
The Company's revised interpretation of the 2016 Lancaster 7 and 7Z wells will contribute to the data currently being evaluated by RPS Group for its CPR on the Lancaster field. The Lancaster CPR is planned to be completed in Q1 2017 and is the first stage in a re-evaluation of Hurricane's assets.
A full resource evaluation will be made available after the data from the Lincoln Well and the ongoing Halifax Well operations have been interpreted and incorporated into Hurricane's regional understanding of the basement play.
Dr Robert Trice, Chief Executive of Hurricane, said:
"The updated data from the Lancaster 7 and 7Z wells reinforce our belief that the Lancaster field is substantial. The Lancaster CPR due at the end of Q1 2017 will quantify the resources ahead of FID for the Early Production System due at the end of H1 2017.
We are delighted by the result of the Lincoln Well and that the Brynhild fault separates the Lincoln/Warwick single accumulation from Lancaster and Halifax.
We now await the results of the Halifax Well which is designed to evaluate our exploration model which describes Lancaster and Halifax as a single hydrocarbon accumulation."
Hurricane Energy plc
Dr Robert Trice, Chief Executive Officer
Alistair Stobie, Chief Financial Officer
+44 (0)1483 862 820
Cenkos Securities plc
Nominated Adviser and Joint Broker
Derrick Lee/Nick Tulloch/Beth McKiernan
+44 (0)131 220 6939
Macquarie Capital (Europe) Limited
Alex Reynolds/Guy de Freitas
+44 (0)20 3037 2000
Patrick d'Ancona/Ben Simons
+44 (0)20 7830 9700
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. Hurricane has already successfully discovered substantial volumes of oil on the UKCS. The Company has 444-470 mmboe of 2C Contingent Resources and 432-442 mmboe of P50 Prospective Resources on acreage it controls 100%.
Further information on Hurricane can be found at: www.hurricaneenergy.com.
The technical information in this release has been reviewed by Dr Robert Trice, who is a qualified person for the purposes of the AIM Guidance Note for Mining, Oil and Gas Companies. Dr Robert Trice, Chief Executive Officer of Hurricane Energy plc, is a geologist and geoscientist with a PhD in geology and has over 30 years' experience in the oil and gas industry.
CPR - Competent Person's Report
ESP - electric submersible pump
FID - final investment decision
Mmboe - million barrels
ODT - oil down to
OWC - oil water contact
STB/day - stock tank barrels per day
TVDSS - true vertical depth (sub-sea)