Berenberg reiterates 'buy' rating on 'transformational' Hurricane Energy

Berenberg said it considered Hurricane to be "one of the most transformational stocks" in its coverage after management delivered "a strong update" on its early production scheme at Lancaster during the group's capital markets day on the day before, raising peak production guidance on the back of better well productivity.

With Hurricane continuing to de-risk the fractured basement plays in the UK and in turn addressing industry concerns about the sustainable productivity potential of the same, the German bank said the upsides were "significant", with the fully derisked value of just the Greater Lancaster Area being 180p per share net to Hurricane, assuming "a more conservative resource estimate".

"However, it is still early days and more data is needed before the upside case can be de-risked," noted Berenberg.

"We rate Hurricane a 'buy', as we consider it to be one of the most transformational stocks under our coverage."

Berenberg also noted that its 100p price target was derived using a risked net asset value, with the Lancaster earnings net of financials forming the core NAV, and a full-field development of the Lancaster and Warwick fields offering contingent upside.