Hurricane Energy blows the market away
UK oil producer Hurricane Energy (HUR:AIM) is building on the significant milestone in June of first oil from its Lancaster field.
An investor day on 11 July revealed the company’s early production system at Lancaster is performing better than expected with upgrades to production guidance.
While Hurricane held 2019 production guidance, it has upgraded forecasts for 2020 to 20,000 barrels of oil a day (bopd) from 17,000 bopd. The company believes it can generate cash flow of up to $240m from this output.
The company also dismissed fears that a recent exploration disappointment with its Warwick Deep well has negative implications for Lancaster or its Lincoln asset.
Hurricane is the first in the UK to produce hydrocarbons from so-called fractured basement reservoirs. These are bodies of rock beneath the earth formed more than 2 billion years ago.
In certain places these massive structures – located deeper than the sandstones which have traditionally been the focus of oil exploration in the UK – have been pushed up and violently fractured by earthquakes and other tectonic forces.
The hydrocarbons discovered by Hurricane are contained within the cracks in these formations.