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Hurricane Energy announces drop in production at Lancaster field

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Oilfield Technology,

Hurricane Energy has announced that production from the Lancaster field was 1.3 million bbl in 2Q20, compared to 1.4 million bbl in 1Q20.

Since the company's last update on 8 June 2020, the 205/21a-6 well on the Lancaster field has produced at an average rate of c. 12 000 bpd. The increase in oil production from the 205/21a-6 well implemented on 5 June 2020 has, as expected, been accompanied by an increase in produced water. Prior to commissioning of the electric submersible pumps (ESPs), the volume of water production from the 205/21a-6 well represented a water cut of c.11% compared to 8% immediately prior to 5 June.

Following the relaxation of Covid-19 restraints on UKCS offshore operations, on 3 July 2020 the company began commissioning the ESPs in the Lancaster production wells. Both the 205/21a-6 and 205/21a-7z wells are currently flowing with use of the ESPs and delivering combined production of c.15 000 bpd. The company plans to continue testing both wells on ESPs for a short period of up to two weeks before finalising its near-term production strategy. Further updates, including a stabilised water production rate, will be announced in due course.

The Aoka Mizu FPSO has maintained a high level of operational uptime. A planned annual week long maintenance shut down is provisionally scheduled for September 2020.

The 14th cargo of Lancaster oil was lifted in late June 2020, with the next lifting scheduled for late July 2020.

Technical review

As disclosed on 8 June 2020, the Technical Committee of Hurricane's Board is re-examining the full range of possible geological and reservoir models for the Lancaster field. The 2017 Competent Person's Reports attributed independently certified reserves to the Lancaster EPS development and contingent resources associated with the overall West of Shetland portfolio. The outcome of the technical review may lead to a material downgrade of these contingent resource estimates. Any such revisions would be formally reflected in a new Competent Person's Report, currently scheduled for release no later than the end of 1Q21.

A decision on future operational activity will be informed by the technical review. While no decisions have been made on the nature and timing of future activity on Lancaster, the company believes that, given the design and procurement lead times likely to be involved coupled with the constraints of the operational weather window West of Shetland during the winter months, any well operations activity at the Lancaster field location would commence late in 1Q21 at the earliest.

Results of the technical review and future production plans are expected no later than the company's interim 2020 financial results, which are provisionally scheduled for 11 September 2020.

Greater Warwick Area (GWA)

The Oil and Gas Authority (OGA) has given notice to the GWA joint venture of a proposed field determination area over local structural closure at the Lincoln discovery. Hurricane is committed to working with its partner Spirit Energy on the best route forward for the Lincoln discovery.

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