Hurricane Energy this morning reported a 231% increase in its total 2P Reserves + 2C Contingent Resources, which now sits at 2.6 billion barrels of oil equivalent.
The increase was part of the publication of an updated Competent Person’s Report (CPR) by RPS Energy Consultants. The updated CPR covers all of the company’s Rona Ridge assets excluding the Lancaster field (licence P.1368 Central), which was covered by a CPR released in May 2017.
Chief executive Robert Trice said: “We are pleased to now have independent validation of our geological model for the Rona Ridge basement play. The Lancaster EPS will go a long way, together with other appraisal work, to narrowing reservoir resource ranges on our assets on the Rona Ridge, following target first production in H1 2019. In addition to providing significant cash flow, the Company believes that a successful EPS will provide a read-across to the production potential of all our basement assets, materially de-risking Lancaster and the surrounding fields at Lincoln, Halifax, Warwick and Whirlwind.”
RPS has concluded that the available data indicates that Halifax has similar reservoir properties to Lancaster. The pair may share a common aquifer, according to the report.
A previous Halifax Drill Stem Test recovered only traces of formation oil; however, RPS agrees with Hurricane’s hypothesis that the most likely reason is a combination of drilling mud and granite fines that resulted in a thick paste which blocked fractures and made it very difficult for the well to flow.
Hurricane is currently seeking a farm-out partner for its developments.
A Hurricane Energy spokesperson said the company would ultimately look for a “sale to an industry partner, at the appropriate time”.
The spokesperson added: “The Lancaster Early Production System (EPS) is fully funded and on track for first oil in H1 2019. This first phase of development is designed to provide data to better understand the reservoir characteristics of the basement on the Rona Ridge, whilst providing the Company with substantial cashflow. This CPR has reiterated that Hurricane’s other Rona Ridge assets have very similar properties to Lancaster and the EPS is expected to develop the understanding of these discoveries whilst providing capital for the next phase of development. The EPS has given the Company the flexibility to continue to de-risk its assets independently, until such time that it receives an offer from an industry partner that reflects appropriate value for shareholders.
“Hurricane’s data room remains open. We have been encouraged that certain potential counterparties have expressed a desire to transact across Hurricane’s entire Rona Ridge portfolio. However, given the potential capital commitments for a development of the size indicated by this resource upgrade, it is likely that potential partners will wait to see initial results from the Lancaster EPS.”
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