Hurricane Energy has announced it expects revenues generated from its Lancaster field West of Shetland to reach $165m (£123m) in the 2019 financial year.
The firm issued a trading and operational update this morning showing production since September has averaged 12,500 barrels of oil per day.
Hurricane generated its first revenue in June this year when it sold its first cargo from the Lancaster field.
The company said the performance of each well had been “in excess of pre-start-up expectations” at Lancaster.
Chief executive Robert Trice said: “2019 has been a transformational year for Hurricane, as we saw first oil from the first fractured basement development on the UKCS.
“I am delighted with the performance of the Lancaster EPS and look forward to presenting what we have learnt and what we expect from this reservoir at our Capital Markets Day in March.
“The results of the individual well tests have surpassed our expectations.”
LICENCE EXTENSION AND TIE-BACKS
Hurricane announced it has agreed an extension with the OGA for its licence for the Lincoln and Lancaster areas, but could be facing a $10m bill for an idle rig as a result.
The five-year extension of the P1368 licence comes with a commitment to drill a sub-vertical well to determine the full extent of the Lincoln field in 2020.
Due to the time taken to plan and permit the well, drilling is not expected to take place before June next year, meaning the contracted rig will stand idle between February and June “incurring a cost of up to $10 million net to Hurricane”.
In order to reduce idle time for the Paul B Lloyd Junior rig, Hurricane said it was considering alternative options such as accelerating a third horizontal producing well at the Lancaster field, tying it back to the Aoka Mizu FPSO in 2021 with first oil by the end of that year.
The extension also requires a sub-vertical well in 2021 to determine the full extent of Lancaster.
Meanwhile a planned tie-back of the Lincoln Crestal well to the Aoka Mizu FPSO – the early production system at Lancaster – for next year may be pushed back to 2021 due to the time required to obtain regulatory approval.
Confirmation of whether it will go ahead as planned is expected in the first quarter of next year, otherwise it will need to be plugged and abandoned by June 22, 2020.
Lincoln Crestal was the second of three appraisal wells on the Greater Warwick Area near Lancaster, finding commercial rates of light, moveable oil.
Earlier this month the third, Warwick West, confirmed oil but said “further technical analysis” was needed, resulting in a drop in share price.
Full development plans for both the Lancaster and Lincoln fields is expected within their five-year extension period, the firm said.
Elsewhere in the P1368 licence, Hurricane has decided to relinquish its hold on the Whirlwind and Strathmore sub-areas.
Mr Trice added: “”We are pleased to have extended the licence over the Lancaster and Lincoln subareas for a further five years.
“We anticipate having taken a final investment decision on full field development plans for both fields by the end of that period. The deep wells that now form part of our programme will target the delineation of the maximum extent of both the Lancaster and Lincoln oil columns to a more definitive level.”