Hurricane Energy: completion of Halifax well operations and release of the Transocean Spitsbergen rig

The information below relating to the Halifax Well is preliminary and will be updated following detailed analysis once the final well data and third party reports have been received and analysed.

The principal purpose of the Halifax Well was to support the Company's view that the Lancaster Field and the Halifax prospect are one large connected structure. Well results support the Company's opinion. The Halifax Well has successfully identified an extensive oil column, significantly below local structural closure. The reservoir interval encountered is pervasively fractured with porosities similar to those at Lancaster. The company believes that the deeper oil down to ("ODT") at 1846 m true vertical depth subsea ("TVDSS") identified in the Halifax Well, compared with an oil water contact ("OWC") at Lancaster at 1678 m TVDSS, is most likely caused by a tilted OWC.

The Halifax Well was drilled and cased to 1179 m TVDSS in accordance with the Company's drilling programme which was designed to isolate a potential gas cap and oil bearing column to a depth of 100m true vertical thickness ("TVT") below structural closure. It was subsequently drilled to 1801 m TVDSS and a Drill Stem Test ("DST") was undertaken. However, constrained by budget, available time and the safety requirement of drilling overbalance, the well was unable to clean up and recovered only traces of formation oil to surface. The well was finally TD'ed at 2004m TVDSS, with no confirmed OWC encountered.

Following discussions with the Oil & Gas Authority, the Halifax Well has been suspended to allow for potential future operations to either deepen and/or undertake further testing of the well, the programme for which will be determined following analysis of the well results.

Preliminary third party analysis from the Halifax Well indicates:

• a very significant hydrocarbon column of at least 1156 m is present within the basement extending well below local structural closure (which is at 1040 m TVDSS).
• that the basement reservoir below the final casing point (1179 m TVDSS) is pervasively fractured (based on initial analysis of borehole image logs processing).
• that porosity is consistent with that at Lancaster (based on initial petrophysical analysis.

The Spitsbergen rig has demobilised and is no longer on hire to Hurricane.

Dr Robert Trice, Hurricane's CEO, commented:

"This is a highly significant moment for Hurricane and I am delighted that the Halifax Well results support the Company's view that its substantial Lancaster discovery has been extended to include the Halifax licence. We believe that the GLA is a single hydrocarbon accumulation, making it the largest undeveloped discovery on the UK Continental Shelf.

The discovery of a 1km hydrocarbon column at Halifax validates the efforts the company undertook to acquire the licence and drill, test and log the Halifax Well through the winter months. Given the positive well results, the Halifax Well has been suspended to provide the company the option to return to undertake further testing as well as provide the option to deepen the well and thereby establish a definitive oil water contact.

The end of the Halifax Well marks the completion of the 265 days during which Hurricane has had the Transocean Spitsbergen rig on hire. The company has successfully drilled one development (Lancaster Sidetrack), one appraisal (Lancaster Pilot), one intervention on the 2014 horizontal well (in preparation for well completions in Q2 2018) and two exploration (Lincoln and Halifax) wells. We have now completed the well stock for our Early Production System ("EPS") and in the process materially increased and de-risked the resource volumes associated with Lancaster. The exploration wells on Lincoln and Halifax have resulted in the discovery of extensive oil columns and we therefore expect that later iterations of our CPR will significantly upgrade our resource base on both the Greater Lancaster and Greater Warwick Areas.

I would personally like to thank Transocean whose pragmatic approach to commercial and contractual negotiations have been a breath of fresh air in today's tough industry environment, and have facilitated Hurricane's successful campaign during a time when UK exploration and appraisal drilling has been at a low. We have created a great partnership and I look forward to successfully continuing this relationship.

The Lancaster CPR is due imminently and FID for the Lancaster EPS remains on track for the end of H1 2017. We will process the data from the Lincoln and Halifax wells and expect to release updated CPRs towards the end of 2017.

These are exciting times for Hurricane."

Read the article online at: https://www.oilfieldtechnology.com/offshore-and-subsea/28032017/hurricane-energy-completion-of-halifax-well-operations-and-release-of-the-transocean-spitsbergen-rig/