Hurricane shares plunge on Shetland field downgrade

Shares of West of Shetland oil and gas explorer Hurricane Energy plc fell another 17% on Thursday after it published an update on the technical review of its Lancaster field.

” … the company believes there is a risk of a material downgrade to estimated reserves attributable to the Lancaster Early Production System, and that there will also be a material downgrade to estimated contingent resources across the West of Shetland portfolio,” said Hurricane.

“This assessment does not take into account any production enhancement options for the Lancaster field which are currently under evaluation.”

Hurricane Energy shares fell about 17% to around 5p and have lost almost 90% of their value in the past 12 months.

The company added: “The Technical Review is ongoing and final conclusions have not yet been made.

“However, as a result of the review and analysis performed to date, which has incorporated both existing and new data, Hurricane’s Technical Committee has concluded that there is a reasonable probability that the oil water contact in the Lancaster field is shallower than the range of oil water contacts envisaged in the 2017 Competent Person’s Report by RPS Energy …

“Completion of the Technical Review is expected on or before the company’s interim 2020 results on 11 September 2020, at which point the company expects to be in a position to notify management estimates of reserves and resources for the Lancaster field, prepared in accordance with the Society of Petroleum Engineers’ Guidelines for the Evaluation of Petroleum Reserves and Resources …

“On 2 August 2020, the Aoka Mizu FPSO underwent a controlled shutdown to undertake an inspection.

“The inspection identified necessary repairs which have been ongoing in recent days, with production expected to restart imminently.

“Immediately prior to the shutdown, the field was producing at a gross rate of c.17,000 bopd.”