Shares of troubled West of Shetland oil and gas explorer Hurricane Energy plc fell another 11% on Tuesday after it published a stock exchange update on “the previously announced stakeholder engagement process and the timing of further activity” in the Lancaster field.
Hurricane shares have fallen about 80% over the past 12 months.
“The company has previously announced that it is engaging with its stakeholders on a proposed development plan and associated funding for the Lancaster field,” said Hurricane.
“The company confirms that these stakeholders include an ad hoc group of convertible noteholders.
“Discussions on the company’s forward work programme, strategy, financing and balance sheet recapitalisation are ongoing.”
On the Lancaster activity update, Hurricane said: “On 18 December 2020, Hurricane outlined contemplated next steps in the Lancaster development programme, which included a second production well in 2021 by side-tracking from the existing 205/21a-7z well into the central area of the field.
“This proposed side-track is more complex in nature than previous wells on Lancaster due to the incorporation of an intelligent completion and the challenges of delivering the well trajectory from the side-track location.
“As a result, the company has concluded that it will not be possible to drill this well during the 2021 summer weather window without unacceptable operational and cost risk.”
Hurricane said that “while no firm decisions have been made” it is now considering various options including drilling the side-track in 2022 following further planning activity during 2021; drilling the side-track together with the previously contemplated water injection well as a combined programme in 2022; or drilling the side-track in 2022 and the water injection well in 2023.
Hurricane added: “All options for potential further development activity are subject to factors which are or may be outside the company’s control which include field performance, prevailing oil prices and support from relevant stakeholders and counterparties.”