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Lancaster Oil Production ( EPS )

lse:hur

#41

They may occasionally be affected by bad weather, although I would have thought that if that were the case it would only lead to there being more oil in the FPSO tanks than a tanker could take in one load. In that case the time until the subsequent offload could be reduced as they wouldn’t have to wait as long from the offload until the tanks were back to 450k. In essence average over a longer period of time, what you are saying is clearly correct - they can only take off however much they get out the ground and there should be a direct correlation between pumped volume and offload volume.


#42

My understanding is the off load tankers BP use, are good for 700,000 barrels of oil, which is greater that the capacity of the FPSO (604,000 barrels).

All HUR need to consider is the weather and tanker availability, which is presumably stipulated in the contract, so basically weather. 150,000 barrels of oil, or presently 10 + days of production seems like a good margin of error.


#43

Navion Oceania due at Lancaster today.


#44

First real Break in the weather all January, up here today.


#45

#46

Tanker still at the FPSO, must be a big offload of oil. 20.44 - 21/1/2020


#47

Midday 22/1/2020 tanker Navion Oceania still at the rig!


#48

Bobsson,
Would this indicate a potential problem with the offload?


#49

Full steam ahead to Rotterdam now, due 24th 8pm.
Last seen so weighed down with oil that only the periscope can be seen.


#50

squinn, No problems, it could be a bumper offload perhaps even 500k barrels?


#51

Cheers Bobsson,
I am looking very forward to the CMD or any update to be honest, hopefully the share price responds well to any good news… About time we had a change in fortuje with this share, I do however remain sceptical about the next 2 years… And the share in general, any thoughts???


#52

squinn, I put a list on the “share price” thread (I think) of what I am hoping for end July. But here is an analogy between HUR and SXX (the giant potash (ish) mine in Yorks) both are small companies who have discovered something big, so big that it will take hundreds of millions of £££££s to deliver. The main full field development is far too big for HUR to undertake. The difference between HUR and SXX (afaik) is that HUR are producing field test oil and bringing in cashflow of around $20+ million per month. HUR has the potential to produce 35000 bpd (40000 bpd if Spirit drop out) from the EPS, this should bring in $50 m per month! All the time HUR will be proving up more reserves, and should be able to pay down the convertible debt. Crystal Amber think the shares are worth 347p each. I am just going to sit and wait until the share price rockets then make a decision whether to sell, if HUR receives a bid it makes my decision for me.
Just my views


#53

Suppose it doesn’t look too bad. Just need to wait for the CMD and hope all is well then. Always a gamble with these fledgling oil companies…


#54

Sounds like approximately 12-13,000 bpd about to be unloaded which fits in with HUR’s plans to test the wells individually in January.
Hopefully, back up to full speed soon.


#55

RNS

https://www.investegate.co.uk/hurricane-energy-plc--hur-/rns/trading-and-operational-update/202001290700072315B/


#56

Trading and Operational Update

Hurricane Energy plc, the UK based oil and gas company focused on hydrocarbon resources in naturally fractured basement reservoirs, provides its first quarterly production update, and a trading and operational update ahead of its results for the year ended 31 December 2019, due to be announced on 19 March 2020. This information is unaudited and subject to further review.

Highlights
· Continued strong production performance from the Lancaster Early Production System (“Lancaster EPS”)
o Well productivity above pre-start up expectations
o Facility availability above 90%
· Commencing Lancaster EPS quarterly production reporting
o Q3 2019: 15,400 barrels of oil per day - significantly above guidance of 9,000 barrels of oil per day on good facilities availability
o Q4 2019: 11,800 barrels of oil per day - exceeding updated guidance of 11,000 barrels of oil per day despite ongoing commissioning activities and commencement of individual well tests
· FY2019 Production and oil sales
o Production: 3.0 million barrels of oil (average of 12,900 barrels of oil per day from introduction of hydrocarbons on 11 May 2019)
o Oil sales: 2.9 million barrels of oil across seven cargoes
· Financials for the year ended 31 December 2019
o Revenue: $170 million
o Year-end unrestricted cash: $157 million
o Year-end net payables balance: $25 million
· 2020 update
o Eighth lifting successfully completed on 22 January 2020
o Individual well flow test on 205/21a-6 well (“6 Well”) due to complete before month-end, following which two well production is expected to resume at 20,000 barrels of oil per day (subject to facilities availability)
o Additional Lancaster production well being considered

Lancaster EPS Production Update

Having completed two full calendar quarters of production, Hurricane now plans to provide quarterly production reports going forward. Updates will be made in the first month of each calendar quarter. The first such update is provided below.

Q3 2019
Q4 2019
FY 2019
Oil Production
Million barrels
1.4
1.1
3.0
Oil Rate
Barrels of oil per day
15,400
11,800
12,900
Average Water Cut
% total fluids
6.2%
10.3%
7.4%

As described in the Company’s 2019 interim results on 20 September 2019, production from start-up through Q3 was significantly above guidance of 9,000 barrels of oil per day due to better than expected system availability. This was expected to decline into Q4 due to a number of outstanding facilities related issues. However, continued good facilities availability of over 90% allowed Hurricane to commence individual well flow tests during Q4 2019, whilst continuing to deliver full year production above the Company’s updated guidance (12,500 barrels of oil per day).

Hurricane has been carrying out these individual flow tests to establish individual well performance and the optimum combined well flowrate in light of the immediate and strong pressure communication between the wells. During Q4, the 205/21a-7Z well (“7Z Well”) was produced on its own for 25 days, including periods at relatively low rates as part of the reservoir evaluation process. This resulted in lower oil production and a higher average water cut than observed during Q3.

The Lancaster 6 Well flowed at an average rate of approximately 12,500 barrels of oil per day from the start of individual well flow period on 20 November 2019 until the latest (eighth) lifting on 22 January 2020.

Hurricane intends to complete its individual well flow test on the 6 Well before the end of this month and thereafter intends to flow both the 6 Well and the 7Z Well at a combined rate of approximately 20,000 barrels of oil per day. The Company intends to discuss the data acquired from the separate well tests and the subsequent combined flow at the Capital Markets Day on 25 March 2020, unless at any time prior, that data is outside of expectations.

Future Data Provision

As production from the Lancaster EPS continues, the Company is working towards gathering the data it believes will enable it to present a comprehensive picture of the Lancaster reservoir’s performance and its potential. The Company’s guidance on this process since the inception of the Lancaster EPS has been consistent; that it would take 6-12 months of stable production following first oil for the Company to be in a position to draw meaningful conclusions from the data gathered from production, and from the tests and analysis being undertaken. The planned Capital Markets Day, on 25 March 2020, represents the earliest date that the Company anticipates being in possession of data and analysis suitable for dissemination to shareholders and the wider market.

2019 Financial Results

Hurricane successfully completed its seventh lifting from the Aoka Mizu FPSO on 22 December 2019. Total oil sales for the year were 2.9 million barrels, generating $170 million in revenue in the period, having introduced hydrocarbons on 11 May 2019.

Year-end unrestricted cash was $157 million, $25 million of which is expected to be used in relation to the Company’s net payables position, after deducting amounts due from the Company’s joint venture partner.

The Company expects to report its full financial results for the year ended 31 December 2019 on 19 March 2020.

2020 Update

As announced on 13 December 2019, Hurricane’s 2020 work programme has been amended as a result of the terms of the P1368 licence extension, which will include the drilling of one or more appraisal wells on Lincoln, and the terms of the 205/26b-14 (Lincoln Crestal) well suspension approval. Hurricane is also exploring several options to drill an additional Lancaster production well in 2020 to allow for the full utilisation of the Aoka Mizu FPSO’s throughput capacity and to provide dynamic data from another part of the Lancaster reservoir.

All proposed activity remains subject to regulatory consent and, where related to joint activity with Spirit Energy, partner approval. A further update will be provided as soon as possible with respect to the 2020 work programme.

Dr Robert Trice, Chief Executive of Hurricane, commented:

"The start-up of the Lancaster EPS has gone very well, with 2019 production exceeding the guidance that we provided when we announced first oil. We’ve also had a strong start to 2020 with the 6 Well test continuing on Lancaster, delivering steady production. A return to two-well production is imminent.

"Work continues on the analysis of the results of the 2019 drilling campaign, planning of future wells, and obtaining the relevant approvals. I look forward to presenting on what we have learnt and what we expect from this reservoir at our Capital Markets Day in March.

"We note the recent weakness in the Company’s share price and I can confirm that we are not aware of any subsurface, operational or commercial reasons that would have caused such decline. The production performance of the Lancaster EPS wells is above our base case expectations and we remain on target to provide an update at the Capital Markets Day in March whilst continuing to make progress towards the next operational steps for our portfolio.

“Hurricane remains focussed on delivering operational progress, on budget and on schedule, and, in so doing, delivering returns to shareholders. We look forward to continuing to update the market with quarterly production figures, and will announce any material variations to expectations as required.”


#57

The important part:

"We note the recent weakness in the Company’s share price and I can confirm that we are not aware of any subsurface, operational or commercial reasons that would have caused such decline. The production performance of the Lancaster EPS wells is above our base case expectations and we remain on target to provide an update at the Capital Markets Day in March whilst continuing to make progress towards the next operational steps for our portfolio.


#58

A much needed positive operational update today. Well 7z going to be opened this weekend to make a combined average of 20,000 bpd going forward. I just hope that at the CMD on 25th March the 7z water cut is shown to be receding. Still lots of operational news to come, and that should be in another ops update in February. Good to see we will have quarterly production numbers released, including water cut! The company continues to generate strong casfhlow, we must be the envy of so many other small E&P companies.
EPS news I want to know in February, details of the next Lancaster well, progress report on FPSO gas utilisation and WOSP export.
Share price up a meagre 1.5p at 23p (ish) 12.10 pm on such great news
DYOR


#59

I have the next oil lift, the 9th offload, pencilled in for this weekend 15th/16th February. If HUR have now increased production to 20,000 bpd, there should be a load ready for offtake. Thereafter at 20,000 bpd offloads should be every 21 days.
share price still falling, now below 15p on 11/2/2020


#60

With storm Dennis arriving this weekend the offload is likely to be the middle of next week?
Sadly share price still below 15p 13/2/2020