Hurricane on target for Lancaster first oil in 2019
Friday, Sep 22, 2017
Hurricane Energy announced last week it is on target to produce first oil from its Lancaster discovery in the first half of 2019.

The company has signed off on a final investment decision (FID) on the Lancaster Early Production System (EPS), which will be used to expedite output from the field in the West of Shetland (WoS) area of the UK North Sea. The Lancaster field is estimated to hold recoverable reserves of 523m barrels of oil that are located in fractured basement reservoirs.

These are found in metamorphic and igneous rock where faulting has led to the creation of a fracture network, underlying a sedimentary basin.
Hurricane said it had reached agreement with Dutch rig specialist Bluewater Energy Services to lease and operate the Aoka Mizu FPSO, with the vessel now on its way to Dubai for upgrade work. The EPS is anticipated to yield initial output of 17,000 bpd of crude from two wells and requires investment of around US$467 million.

The EPS budget includes US$299 million earmarked for Bluewater to upgrade the Aoka Mizu FPSO under a bareboat contract. It also covers a US$90 million contingency to cover in case there are problems while developing Lancaster.

Aim-listed Hurricane launched a US$520 million fundraising campaign in June by way of a share placement and a convertible bond offering that will provide the necessary finance to achieve first oil.

The company also said it had reached agreement on a rig contract with Transocean that will see it complete production wells in the EPS the have already been drilled. Two appraisals drilled in 2014 and 2016 will be used for the pilot production system.

Hurricane has also placed fabrication orders with TechnipFMC for subsea components.

In March, Hurricane announced that its successful Halifax well might have actually uncovered a single field that stretches around 48 km over the Rona Ridge area to Lancaster. The company is confident that its ongoing drilling work in the Greater Lancaster Area will prove the existence of a single field.

Commenting on the Halifax well earlier this year, company spokesman Ben Simons told NewsBase Intelligence (NBI): “The primary goal of drilling was to demonstrate that Lancaster extends all the way into Halifax, and that’s what it did.”

The nearby Lincoln and Warwick discoveries are also potentially part of the same single field. The company intends to publish Competent Person Reports (CPRs) relating to Halifax and Lincoln later in 2017.

If the results of these are similar to the Lancaster CPR, Hurricane could be sitting on a field with over 1 billion barrels of recoverable oil.

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