Hurricane Energy

Hurricane Energy PLC

Hurricane energy logo
Type	Public limited company
Traded as	LSE:HUR
Industry	Oil and gas
Founded	2004
Founder	Dr Robert Trice
Headquarters	Godalming, Surrey , England, UK
Key people	Steven McTiernan (Chairman) Dr. Robert Trice (CEO) Alistair Stobie(CFO) Neil Platt (COO)
Products	Petroleum and natural gas
Revenue	$tba million (2019)
Operating income	$tba million (2019)
Net income	$tba million (2019)
Website	https://www.hurricaneenergy.com/

Hurricane Energy PLC is an independent oil and gas exploration, development and production company. It specialises in naturally fractured basement oilfields and has discovered and developed oil and gas reservoirs in United Kingdom territorial waters to the West of Shetland. Hurricane Energy is currently listed on the Alternative Investment Market of London Stock Exchange.

History

Hurricane Energy was founded in 2004 by Dr Robert Trice with support from private investors. Dr Trice and the investors believed that there were substantial oil resources in naturally fractured Precambrian age granitic basement structures to the West of Shetland. It acquired licenses to explore a number of areas on and close to the Rona Ridge and has made a series of substantial discoveries.

Operations

Hurricane Energy's business operations are principally focused on the Greater Lancaster Area (“GLA”), which comprises the Lancaster oilfield and the Halifax prospect, and the Greater Warwick Area (“GWA”), which comprises the Lincoln and Warwick prospects. The GLA is 100% owned by Hurricane Energy. The GWA is jointly owned with Spirit Energy, a subsidiary of Centrica, under a farm-in deal that was announced in September 2018.

Lancaster Field

The Lancaster oilfield was discovered in 2009. An Early Production System ("EPS") using the Aoka Mizu FPSO achieved first oil in June 2019 and has achieved production rates of up to 20,000 barrels (3,200 m3) of oil per day. The EPS will be used to gain a better understanding of the reservoir properties as well as generating revenue to help fund ongoing developments. A final investment decision on full field development is anticipated to be made in 2022 with full production expected around three years later. Testing to date has exceeded expectations and productivity indexes have been described as "world class". Production costs for 2020 are forecast to be $20 per barrel and are expected to fall to $17/bbl and perhaps as low as $15/bbl in 2021 as production ramps up.

The Competent Persons Report ("CPR") published by RPS Energy on May 8, 2017 provided the following estimates of reserves, contingent resources and initially in place volumes;

• Reserves
• 1P: 28.1 million barrels (4 million cubic metres) of oil equivalent
• 2P: 37.3 million bbl (6 million m3)
• 3P: 49.3 million bbl (8 million m3)

• Contingent resources
• 1C: 129.1 million bbl (21 million m3) of oil equivalent
• 2C: 486.1 million bbl (77 million m3)
• 3C: 1,116.7 million bbl (178 million m3)

• Initially in place volumes
• Low estimate: 1,571 million bbl (250 million m3) of oil equivalent
• Best estimate: 2,326 million bbl (370 million m3)
• High estimate: 3,333 million bbl (530 million m3)

These estimates will be re-assessed during 2020 taking account of the findings from the Early Production System. They will be further revised after additional drilling and production takes place in the coming years.

Halifax prospect

The Halifax prospect is located in blocks 205/22b, 205/23 and 205/24 of Licence P2308. In early 2017, Hurricane Energy drilled an inclined well, 205/23-3A, and encountered a substantial column of oil and gas that is believed to be at least 1,156 metres true vertical depth. The depth of the reservoir exceeded expectations and therefore took longer to drill. As a result, adverse weather and limited time resulted in the test being curtailed before the well could be properly cleaned up and fully tested or drilled deep enough to more objectively establish the oil water contact point. The well has been suspended and it is intended that it will be re-entered and tested at a future date, possibly in 2021. Hurricane Energy believes that the Lancaster oilfield and the Halifax prospect are a single connected reservoir but further drilling will be needed to prove this hypothesis. The Competent Persons Report issued by RPS Energy in December 2017 estimates of reserves, contingent resources and initially in place volumes to be as follows;

• Reserves
  • Not yet quantified

Contingent resources

• 1C: 268 million barrels (43 million cubic metres) of oil equivalent
• 2C: 1,235 million bbl (196 million m3)
• 3C: 3,379 million bbl (537 million m3)

Initially in place volumes

• Low estimate: 2,523 million bbl (401 million m3) of oil equivalent
• Best estimate: 5,157 million bbl (820 million m3)
• High estimate: 9,064 million bbl (1,440 million m3)

These estimates assume that Halifax and Lancaster are separate and may increase if they prove to be a single supergiant (>10 billion barrels) reservoir.

Lincoln and Warwick prospects

The Lincoln and Warwick prospects in the GWA are located in blocks 204/30b, 205/26d and 205/26b. They are covered by Licences P2294 and P1368 (South). These prospects are jointly owned with Spirit Energy as a result of a farm-in agreement signed in September 2018.

In November 2016, prior to the Spirit Energy farm-in deal, Hurricane Energy spudded discovery well 205/26b-12 on the Lincoln prospect. It penetrated over 800 metres of naturally fractured basement with a true vertical depth of 688 metres. The fracture network and hydrocarbons encountered were similar to those found in the adjacent Lancaster oilfield, suggesting that they originate from a similar source.

In 2019, well 205/26b-14 (Lincoln Crestal) was drilled by the joint venture and produced light crude oil with 43° API. The natural flow rate was 4,682 barrels (744.4 m3) of oil per day and the rate with electric submersible pumps ("ESPs") was 9,800 barrels (1,560 m3) of oil per day. This well has been suspended as a future producer and it is intended, subject to regulatory approval, to connect it to the Aoka Mizu FPSO that is located on the adjacent Lancaster oilfield.

The Oil and Gas Authority requires the joint venture to spud at least one additional sub vertical well before December 22 2020 in order to further establish the size of the Lincoln Field.

In 2019, the joint venture between Hurricane Energy and Spirit Energy drilled two wells, 205/26b-13Z (Warwick Deep) and 204/30b-4 (Warwick West), on the Warwick prospect. They demonstrate that there is a significant oil column and hydrocarbons encountered are similar to those found in the adjacent Lancaster oilfield but the flow rates were disappointing. Both wells were therefore plugged and abandoned. The information gathered from these wells is currently being analysed. It is expected that the results of this analysis will be published during 2020 and will determine the next steps for the Warwick prospect.

The Competent Persons Report issued by RPS Energy in December 2017 estimated the reserves, contingent resources and initially in place volumes for the GWA to be as follows;

Lincoln prospect (Licence P1368 (South))

• Reserves
  • Not yet quantified

Contingent resources

• 1C: 150 million barrels (24 million cubic metres) of oil equivalent
• 2C: 604 million bbl (96 million m3)
• 3C: 1,537 million bbl (244 million m3)

Initially in place volumes

• Low estimate: 1,404 million bbl (223 million m3) of oil equivalent
• Best estimate: 2,514 million bbl (400 million m3)
• High estimate: 4,113 million bbl (654 million m3)

Warwick prospect (Licences P2294 and P1368 (South))

• Reserves
  • Not yet quantified

Contingent resources

• 1C: 228 million barrels (36 million cubic metres) of oil equivalent
• 2C: 935 million bbl (150 million m3)
• 3C: 2,790 million bbl (444 million m3)

Initially in place volumes

• Low estimate: 2,275 million bbl (362 million m3) of oil equivalent
• Best estimate: 4,157 million bbl (661 million m3)
• High estimate: 6,975 million bbl (1,110 million m3)

A re-assessment of these figures is expected to be issued during 2020 taking into account the data and analysis of the three wells drilled on the GWA in 2019. As a result of the farm-in agreement with Spirit Energy, Hurricane Energy's share of the Lincoln and Warwick prospects is 50% of these figures.

Former prospects

Hurricane Energy had further prospects known as Whirlwind, Strathmore, Tempest, Typhoon and Wellington on or near the Rona Ridge but the licenses for these have all been relinquished in order that the company can focus on the GLA and GWA.

The Competent Persons Report issued by RPS Energy on 11 December 2017, which includes the Whirlwind and Strathmore prospects, and an earlier Competent Persons Report dated 19 November 2013 (now deleted from Hurricane Energy's website), which included the Typhoon and Tempest prospects, estimated the reserves, contingent resources and initially in place volumes for these to be as follows;

Whirlwind prospect (Licence P1368 (North), blocks 205/21a and 205/22a)

In 2010, Hurricane Energy drilled well 205/21a-5 targeting the naturally fractured basement. Oil show were found in the Lower Cretaceous Valhall Limestone overlying the basement but the well had to be suspended due to winter weather. In 2011, the well was re-entered and oil was successfully flowed to the surface from the naturally fractured basement and from the overlying Valhall. The well was suspended and it was intended to re-enter it and drill a sidetrack at a later date. In December 2019, Hurricane announced that it intendeds to relinquish the licence for the Whirlwind prospect.

• Reserves
  • Not quantified

Contingent resources

• 1C: 98 million barrels (20 million cubic metres) of oil equivalent
• 2C: 205 million bbl (33 million m3)
• 3C: 373 million bbl (59 million m3)

Initially in place volumes

• Low estimate: 219 million bbl (35 million m3) of oil equivalent
• Best estimate: 409 million bbl (65 million m3)
• High estimate: 652 million bbl (100 million m3)

Strathmore prospect (Licence P1368 (Southwest), block 204/30a)

Unlike most of Hurricane Energy's other prospects and discoveries, Strathmore is a sandstone reservoir. It was discovered by Amerada Hess in 1991 and several wells were drilled there during the 1990s. Hurricane Energy subsequently acquired the rights to the Strathmore prospect as part of the original P1368 licence but it wasn't drilled by them due to their successes and more substantial prospects elsewhere in their portfolio. In December 2019, Hurricane announced that it intendeds to relinquish the licence for the Strathmore prospect.

• Reserves
  • Not quantified

Contingent resources

• 1C: 20 million barrels (3 million cubic metres) of oil equivalent
• 2C: 32 million bbl (5 million m3)
• 3C: 57 million bbl (9 million m3)

Initially in place volumes

• Low estimate: 131 million bbl (21 million m3) of oil equivalent
• Best estimate: 182 million bbl (29 million m3)
• High estimate: 246 million bbl (39 million m3)

Typhoon and Tempest prospects (Licences P.1485 and P.1835, blocks 204/28, 204/27, 204/22a and 204/23a)

The Tempest prospect is an Upper Jurassic Rona Sandstone structure and Typhoon is Fractured Pre-Cambrian Basement beneath it. In 1981, BP drilled well 204/28-1 into the sandstone and underlying basement. Oil show were found but did not flow. Hurricane Energy acquired licences P.1485 and P.1835 because it believed that the deeper, naturally fractured basement contained significant quantities of light oil but successful drilling elsewhere in their portfolio meant that they were not able to drill these prospects. They announced in December 2017 that these licenses would therefore be relinquished.

• Reserves
  • Not quantified

Contingent resources

• 1C: 8 million barrels (1 million cubic metres) of oil equivalent
• 2C: 26 million bbl (4 million m3)
• 3C: 98 million bbl (20 million m3)

Initially in place volumes

• Low estimate: 795 million bbl (130 million m3) of oil equivalent
• Best estimate: 1,307 million bbl (208 million m3)
• High estimate: 1,961 million bbl (312 million m3)

Wellington prospect (Licence P1368, block 205/24)

Other activities

On 1 February 2012, Hurricane Energy was awarded a Frontier Licence, P1884, by the OGA. This covered blocks 5/1, 5/2, 5/3, 5/4, 5/5, 5/6, 5/7, 5/8, 5/9 and 206/28 in an area between Foula and Orkney. After shooting and analysing 754km of 2D seismic data the licence was relinquished on 31 October 2013.

External links

Official website
Hurricane Energy Twitter Handle
Oil and Gas Authority zoomable map of UK offshore oil and gas activity

References

This article "Hurricane Energy" is from Wikipedia. The list of its authors can be seen in its historical. Articles taken from Draft Namespace on Wikipedia could be accessed on Wikipedia's Draft Namespace.