Fractured basement explorer Hurricane Energy is set to raise US$520 million to help it fund its Lancaster early production system (EPS), west of Shetland.
The cash would be through a $300 million in a share placing and a further $220 million in a convertible bond offering, both of which have been subscribed but are subject to a shareholder meeting. Hurricane says the cash is "critical" to maintaining the project schedule for first oil in H1 2019.
The Lancaster EPS is a two-well tieback to a floating production, storage and loading facility that is expected to produce 17,000 b/d and provide data required for a full field development.
Hurricane says key elements of the project, including procurement of the FPSO, subsea umbilicals, risers and flowlines and subsea production systems, were secured, taking advantage of relatively low vessel and oilfield services rates.
However, these agreements remain subject to a final investment decision, which requires the funding to be in place. Without the funding, the project could be delayed, cost more or the license potentially withdrawn, Hurricane says.
In May, a new evaluation of the Lancaster field, west of Shetland, said the field contains 2.3 billion bbl in place, a 120% increase compared to the 2013 estimate, and attributed 2P reserves to the field for the first time.
Hurricane has agreed with Bluewater Energy Services that a contract for the Aoka Mizu FPSO, previously working on Nexen's Blackbird and Ettrick fields in the UK North Sea, could include an extension option for up to 10 years. Hurricane has a heads of terms agreement with Bluewater.
Last year, Technip and FMC Technologies (now TechnipFMC) were picked by Hurricane Energy to be an exclusive provider of subsea equipment to the Lancaster development.