Hurricane Energy, a company working to develop its Lancaster discovery located West of the Shetland Islands, has conditionally raised £70 million through a share placement with existing and other institutional investors.
The company on Thursday said £70 million would be through an issuance of 205,882,353 Placing Shares at a price of 34 pence per share.
Hurricane said its existing shareholders, including Kerogen Investor and Crystal Amber have conditionally subscribed for 93,017,647 of the Placing Shares to raise gross proceeds of £31.63 million.
“The Company is pleased with the strong demand received, which led to the Placing being oversubscribed at the Issue Price, and is delighted to welcome a number of new institutional shareholders to the share register,” Hurricane said.
Hurricane plans to use the cash to advance the development of the Greater Lancaster Area fields.
The cash will provide funding the FEED and certain other engineering studies for the EPS phase of Lancaster; secure the development timetable for the Early Production System (EPS) phase, by acquiring the Subsea Equipment, buoy, mooring, and control system long lead items.
This also means that Hurricane now has enough cash to further delineate the Greater Lancaster Area by drilling an exploration well on Lincoln and an exploration well on Warwick or another similarly risked Rona Ridge prospect with the potential for up to approximately 500 million barrels of unrisked Prospective Resources across the Lincoln and Warwick prospects.
Furthermore, Hurricane says it believes the opportunity to start drilling in November potentially locks in bottom-of-the-cycle rig costs.
“This timing also allows the Company to potentially drill back-to-back wells and continue using Transocean’s Spitsbergen Rig, which is designed for use in challenging weather conditions, as well as the same experienced crew that has drilled the Lancaster 7 wells,” Hurricane said on Thursday.
In line with its latest statement when it announced positive Lancaster results. Hurricane believes it will be able to make a final investment decision on the EPS phase of development in H1 2017, with first oil targeted for in H1 2019.
Robert Trice, Chief Executive, said: “With a number of catalysts including the results from the two new wells, securing an FPSO for the EPS, further results from the Lancaster 7 well drilling, a new Competent Person’s Report in 1H 2017, and sanction of the EPS, the next twelve months are expected to be an exciting period for the Company.”
Additionally, Hurricane is proposing a separate Open Offer to “all Qualifying Shareholders” to raise up to £4.4 million. It said it would provide more info on this open offer in due course.