Hurricane Energy’s decision to have the FPSO for its Lancaster field upgraded in Dubai is a good move, an analyst has said.
Hurricane announced yesterday that it had taken a final investment decision on an early production system for the field, located west of Shetland.
The firm also said the Aoka Mizu vessel left Poland in July and was on its way to Dubai where it will be prepared for service on Lancaster.
Ashley Kelty, analyst at securities firm Cenkos, said Drydock World in Dubai was a step up from Rementowa in Gdansk.
Mr Kelty said: “We see this as a substantial upgrade, as Drydock World is both bigger and better qualified to carry out the work on time and budget.”
He also said the decision to sanction the project and the award of key contracts for the EPS marked an “important milestone” in the development of the huge basement discoveries made by Hurricane.
The business raised about £400million through the placing of convertible bonds and shares in June.
And resource estimates for the wider Greater Lancaster Area are expected later this.
Mr Kelty said: “We are greatly encouraged by the FID for Lancaster EPS, and see this as the next milestone in the journey to production from the basement discoveries.
“The recent fundraise has removed the balance sheet risk to achieving first oil, and we believe that this puts Hurricane in a much stronger position to achieve the farm-out that it desires to help develop the wider Greater Lancaster Area (GLA).
“With a discovered resource base that we estimate to be in excess of 1.4billion barrels, we anticipate that a farm-out to industry partners will be secured before first oil from Lancaster.”
Mr Kelty added: “We remain positive on the longer term outlook for Hurricane as the company moves closer to production from the largest undeveloped field on the UKCS.
“With no funding concerns ahead of first oil, coupled with a strong and supportive investor base, Hurricane is in an unrivalled position amongst peers.”