Hurricane Energy Earns $60.5M from March Lancaster Oil Shipment

OE Staff
Thursday, April 21, 2022

UK-based oil and gas company Hurricane Energy earned about $60.5 million from the sale of the latest cargo of oil produced from its Lancaster field offshore the UK.

The company said this week that the 28th cargo of Lancaster oil, totaling approximately 524 Mbbls, was lifted on March 22, 2022. 

"This cargo was priced by reference to the average of the last five days of March's Dated Brent quotes, being $116/bbl, resulting in net revenue of $60.5 million. The next cargo is anticipated to be lifted in late May 2022," Hurricane Energy said.

In March 2022, production from the P6 well, the only producing well at the offshore field, was 9,085 barrels of oil per day. Lancaster produces oil through the Aoka Mizu FPSO, for which Hurricane Energy and Bluewater recently signed a contract extension after months of discussions. The FPSO has been producing oil from Hurricane Energy's Lancaster offshore oil field since 2019.

The next oil cargo from the field located West of Shetland is anticipated to be lifted in late May 2022.

For reference and comparison, the 27th cargo of Lancaster oil, totaling about 530 Mbbls, was lifted on January 25, 2022, and was priced by reference to the average of the first five days of January's Dated Brent quotes, being $81.4/bbl.

As of March 31, 2022, Hurricane Energy had net free cash of $106 million compared to the last reported balance of $71 million as of February 28, 2022. 

"During the month, there was a net movement of $9.4 million from free cash into restricted funds following the agreement of the Aoka Mizu FPSO Bareboat Charter extension on 25 March. $78.5 million of Convertible Bonds remain outstanding and are due in July 2022," Hurricane Energy said.

"The company believes that net free cash provides a useful measure of liquidity after settling all its immediate creditors and accruals and recovering amounts due and accrued from joint operation activities, outstanding amounts from crude oil sales and after settling any other financial trade payables or receivables," Hurricane said.

"It should be noted that the net free cash is calculated as at the balance sheet date and does not take into account future liabilities that the company is already committed to but have not yet been accrued. As such, not all of the net free cash would be available for repayment of the remaining outstanding Convertible Bonds at their maturity in July 2022," Hurricane added.

Production Forecast

On September 29, 2021, Hurricane Energy provided production guidance for the six-month period between October 1, 2021, and March 31, 2022, of 8,500 - 10,000 bopd, based on FPSO production uptime assumption of 96.5% and production from the P6 well alone on artificial lift via ESP. 

Production during this six-month period was 9,689 bopd, reflecting continued excellent uptime on the Aoka Mizu FPSO coupled with production rates towards the upper end of the range.

Management last week provided production guidance for the full calendar year 2022 of between 7,500 - 8,600 bopd. 

This assumes FPSO production planned uptime of 96.5% and production from the P6 well alone on artificial lift via ESP.  The guidance also includes the impact of an annual maintenance shutdown, anticipated to occur during Q3 2022.

Categories: Energy Industry News Activity FPSO Floating Production

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