Hurricane Energy plc, the UK-based oil and gas company, has suspended the farm-out discussions over its Lancaster project west of Shetland.
In a statement on Wednesday, Hurricane highlighted the successful completion of a £52.1 million Placing and Subscription announced in May 2016, which will enable Hurricane to proceed independently to drill and test both a Pilot Well and a Horizontal Sidetrack Well on the Lancaster field (the “Lancaster 7 Wells”) this summer.
Accordingly, the company said, with funding in place, the Directors of the company have taken the decision to temporarily suspend current farm-out discussions until the drilling, testing and subsequent analysis of the Lancaster 7 Wells has been completed.
This should allow the Hurricane Energy to focus on the upcoming drilling campaign, provide new information to help optimally plan the Lancaster field development, and is expected to provide a strengthened position from which the company may pursue its farm-out options, Hurricane Energy said.
The Lancaster 7 Wells – the first of which is expected to spud in July – are designed to refine the Lancaster Contingent Resource range (currently 62 – 456 MMboe) and provide a second future production well.
The company expects to reopen its data room for farm-out discussions, once the results from the Lancaster 7 Wells have been interpreted and integrated with the ongoing development planning.
Dr Robert Trice, CEO of Hurricane, said: “This is an exciting time for the company, following the recent investments made by new and existing supporters of Hurricane earlier this year. We look forward to this summer’s drilling campaign and are confident that the additional data obtained will put the company in a stronger position from which to pursue funding options to progress the Lancaster development.”
Hurricane Energy will use the Transocean Spitsbergen semi-submersible drilling rig for Lancaster drilling. The Lancaster field, described by Hurricane Energy as one UK’s largest yet to be developed fields, received an oil field status in September 2015.
According to the company’s statement in April, subject to a success of the Lancaster 7 wells, Hurricane Energy expects it could make a final investment decision to progress the EPS phase of development on Lancaster, which is expected to involve tying back two horizontal wells to an FPSO host facility, in the first half of 2017.
Assuming a suitable FPSO can be sourced, the directors believe that first oil could be in the first half 2019, Hurricane Energy then said.