Hurricane Energy plc, the UK based oil and gas company, announces that the updated Competent Person's Report ("CPR") on the Company's Lancaster Field by ERC Equipoise Ltd ("ERCE").
ERCE's work has been prepared in accordance with the June 2018 Petroleum Resources Management System ("PRMS") as the standard for classification and reporting with an effective date of 31 December 2021.
As shown in the tables below, ERCE have increased the estimated Lancaster Reserves. The 31 December 2021 position is partly due to an improvement in the expected future production and to an increase in the economic life of the field aided by higher oil prices, offset by the increased production during 2021.
2022 Production Guidance
On 29 September 2021, the Company provided production guidance for the six-month period 1 October 2021 to 31 March 2022 of 8,500 - 10,000 bopd, based on FPSO production uptime assumption of 96.5% and production from the P6 well alone on artificial lift via ESP. Production during this six-month period was 9,689 bopd, reflecting continued excellent uptime on the FPSO combined with production rates towards the upper end of the range.
Management's production guidance for the full calendar year 2022 is 7,500 - 8,600 bopd. This assumes FPSO production planned uptime of 96.5% and production from the P6 well alone on artificial lift via ESP. Guidance includes the impact of an annual maintenance shutdown, anticipated to occur during Q3 2022.
Antony Maris, CEO of Hurricane, commented:
"The efforts of the surface and subsurface teams in beating the mid-case performance target set at the start of the forecast period have been superb. Together with excellent uptime across all elements of the system has allowed the Company to benefit from the higher than expected oil prices and enabled more reserves to be added in the updated CPR. This supports management's production forecast for the years to come.
Going forward we look to maintain the excellent performance of both the well and the FPSO while we also focus on the Company's next steps."
1. In determining the economic Reserves for the Lancaster field, ERCE has assumed a nominal Brent oil price forecasts of US$75/bbl in 2022, US$71/bbl in 2023, US$69/bbl in 2024 and US$70/bbl in 2025. In line with PRMS guidelines, the nominal oil prices assumed are those forecasts made as at the effective date of the CPR, being 31 December 2021. Prices are escalated at 2.0% per annum inflation.
2. NPV10 equates to the net present value of cash flows from the Lancaster field at a 10% discount rate at the effective date of 31 December 2021
3. Contingent Resources, Development Unclarified, assume additional development wells and / or water injection is implemented as part of any further development; and contingent on regulatory consents, funding and execution during the lifetime of the existing Lancaster wells.
Review by Qualified Person
The technical information in this release has been reviewed by Antony Maris, Chief Executive Officer, who is a qualified person for the purposes of the AIM Guidance Note for Mining, Oil and Gas Companies. Mr Maris is a petroleum engineer with more than 35 years' experience in the oil and gas industry. He has a B.Sc.(Eng.) Petroleum Engineering (Hons) from the Imperial College of Science and Technology (University of London) Royal School of Mines A.R.S.M. and an MBA from Kingston Business School.