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Hurricane Energy hits out at ‘unhelpful’ lack of windfall tax detail

© Supplied by Hurricane EnergyHurricane Energy Warwick
Lancaster’s 29th cargo of oil, totalling 547,000 barrels was lifted on May 24

Hurricane Energy has branded government’s windfall tax as “unhelpful” particularly due to its lack of public details.

The firm said it expects a liability of $5 million up to the end of July 2022, but this “could change and be significantly higher or lower depending on actual details contained within the legislation”.

As the full details of the Energy Profits Levy (EPL)  have not yet been published, the West of Shetland operator said it is “not yet possible” to determine the full impact on the company.

The levy includes substantial investment incentives, which could also play into Hurricane’s hand.

Hurricane Energy said: “The full effect of such an offset will depend on the details of the EPL legislation and the size and nature of any such investment.”

Announcing the windfall tax with immediate effect in May, the UK Government said a standalone bill would be brought “shortly”.

Hurricane Energy CEO Antony Maris said: “Our industry works within the framework of long investment cycles and highly volatile commodity markets. Fiscal stability is key in supporting the investment decision making to meet the UK’s energy transition targets and the introduction of the EPL is unhelpful in that regard.

“However, as a potential investor in future UK oil and gas assets, we also stand to benefit from investment incentives/relief.”

The firm also gave a production update, with its flagship Lancaster field producing 8,700 barrels of oil per day as of June 14 via its two wells.

The overall production rate for the month from the p6 well was reduced due to a temporary reduction in flow rate to conduct tests.

Lancaster’s 29th cargo of oil, totalling 547,000 barrels was lifted on May 24 priced at $110 per barrel, resulting in net revenue of $59.5m.

The next cargo is expected to be lifted in late July.

Mr Maris added: “We believe there are some exciting opportunities ahead and that the Company is well placed to grow its asset base, deliver significant shareholder value and contribute to ensuring security of oil and gas supply for the UK.”

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