Hurricane Energy Announces Operational and Financial Update

Source: www.gulfoilandgas.com 12/16/2021, Location: Europe

Hurricane Energy plc, the UK based oil and gas company, provides an update on Lancaster field operations, decommissioning activity, debt management and net free cash balances as of 30 November 2021.

Lancaster Field Operations Update

The following table details production volumes, water cut and minimum flowing bottom hole pressure for the 205/21a-6 ("P6") well during November 2021.

Oil produced during the month (Mbbls)
- P6 :304
Average oil rate (bopd)
- P6 :10,124
Water produced during the month (Mbbls)
- P6 :177
Average water cut(2)
- P6 :37%
Well gauge pressure (psia)(3)
- P6 :1,610

As of 14 December 2021, Lancaster was producing c.9,900 bopd from the P6 well alone with an associated water cut of c.38%.

The 26th cargo of Lancaster oil, totalling approximately 535 Mbbls, was lifted on 30 November 2021. The next cargo is anticipated to be lifted in January 2022.

During November 2021, the Company successfully completed the plugging and final abandonment ('P&A') of the Lancaster 205/21a-4z well for a cost of c.$1 million. $2.2 million of decommissioning security (previously classified as restricted cash) has now been released back to the Company and used in part to fund this P&A activity.

Financial Update

As of 30 November 2021, the Company had net free cash(4) of $127 million (which includes amounts receivable in respect of the cargo lifted on 30 November 2021) compared to the last reported figure of $99 million as of 31 October 2021.

As previously announced, subsequent to 30 November 2021, $72.2 million in aggregate principal amount of the Company's $230 million 7.50 per cent. Convertible Bonds due 2022 were repurchased by a subsidiary of the Company for a total cash consideration of $69.0 million (including accrued interest). Once cancelled, this will result in the aggregate principal amount of Bonds outstanding being reduced to $79.8 million.

The Company believes that net free cash provides a useful measure of liquidity after settling all its immediate creditors and accruals and recovering amounts due and accrued from joint operation activities, outstanding amounts from crude oil sales and after settling any other financial trade payables or receivables. It should be noted that the net free cash is calculated as at the balance sheet date and does not take into account future liabilities that the Company is already committed to but have not yet been accrued. As such, not all of the net free cash would be available for repayment of the remaining outstanding Convertible Bonds at their maturity in July 2022.


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