Hurricane Energy interim losses widen on Lancaster write-downs

Oil and gas firm Hurricane Energy said on Friday that interim losses had widened as write-downs related to its Lancaster field project had offset improved revenues.

For the six months ended 30 June, Hurricane posted an underlying pre-tax loss of $40.2m, a marked turnaround when compared to the profit of $4.0m recorded by the group a year earlier, despite witnessing revenues surge from $22.5m a year ago to $81.9m in 2020.

The AIM-listed group said the loss was a result of a $238.9m hit from write-downs regarding the impairment of its offshore Lancaster field, located north of Scotland.

Hurricane now anticipates that recovery from its two existing Lancaster early production system wells had been reduced to 16.0m barrels, down from previous estimates of 37.3m.

The company also warned that lower oil prices and reduced production expectations would negatively impact anticipated future cash flows, despite the expected reduction and deferral of licence commitment well spending.

Hurricane said: "Our near-term priority is further technical work to refine an activity plan for Lancaster, which we expect to be finalised by the end of this year and executed in 2021."

As of 1000 BST, Hurricane shares had tumbled 49.22% to 3.20p.