Hurricane Energy confident in low oil price environment

The firm reported average production of 14,900 barrels of oil per day during the first quarter, with average production of 18,500 barrels of oil per day being achieved during April.

It forecast production of 18,000 barrels of oil per day for the balance of 2020, making an average for the year of around 17,000 barrels per day. Operating costs were expected to be $17 per barrel at current production rates and oil prices.

For the Lancaster Early Production System, Hurricane said its data gathering programme has been a success to date, revealing that individually the wells could produce at rates in excess of 10,000 barrels per day, while testing is targeting a combined rate of up to 20,000 barrels per day for all the wells.

The company said the impacts of the Covid-19 pandemic were being managed without significant operational disruption to date, but risks would remain as long as the pandemic was active.

In the Greater Warwick Area, Hurricane said the joint venture was seeking a field determination at Lincoln, adding that consent for the Lincoln Crestal well suspension was being deferred until 30 September.

“We recognise the challenges in the market environment currently but are pleased to report on our continued good production performance at Lancaster," said chief executive Dr Robert Trice.

“With a significant unrestricted cash balance of $152m as at 1 April and low operating cash costs of $17 per barrel, the current oil price does not pose an immediate threat to the company as we continue our data gathering programme at Lancaster.”

However, Trice said it did limit options for capital expenditure on additional operational phases.

At 1037 BST, shares in Hurricane Energy were down 11.37% at 10.45p.