Hurricane Energy’s chief executive said today that the firm is currently “engaging with stakeholders” on funding for the further development of its Lancaster field.
Antony Maris said Hurricane still saw “significant value” in its west of Shetland portfolio, which would be enhanced by a continued recovery in oil prices.
Shares in London-listed Hurricane were up 10.34% to 2.9p as of 9am.
The company said last month it was preparing for crunch talks in a bid to unlock funding for new wells on Lancaster.
Hurricane wants to boost production from Lancaster by drilling a sidetrack on one of the field’s two wells this year, followed by a water injection well in 2022, at a total cost of around £100m.
The firm has to repay or refinance a £180m convertible bond in 2022.
Bosses warned in December that further development activity on Lancaster “might not be possible” if it cannot hammer out an agreement with key stakeholders on financial support.
The company delivered a painful blow to shareholders in September by slashing its contingent resource estimates for Lancaster to 58m barrels remaining from 486m in a 2017 competent person’s report.
Mr Maris said today that production from Lancaster of 12,500 barrels per day in the final four months of 2020 and 12,100 barrels at present was “in line with expectations”.
Sales totalled 5.1 million barrels across 12 cargoes last year, generating revenues of $179m.
The Aoka Mizu vessel that serves Lancaster achieved uptime of 98% in 2020.
The field is producing from just one of its two wells, a decision made for “reservoir evaluation and management purposes”.
Hurricane originally anticipated producing 37m barrels of oil from the early production system (EPS) on Lancaster over six years at a rate of 17,000 barrels per day.
In September, Hurricane said the EPS would only produce 16m barrels, of which 9.4m remained.
The main objective of the EPS was to provide data which would help Hurricane plan a full-field development.
First oil was achieved in June 2019.