Hurricane Energy confirms recoverable oil at its Lancaster field offshore Scotland is "significantly" higher

Courtney Goldsmith
Follow Courtney
Cabinets From Both UK And Scottish Governments Meet In North East Scotland
Hurricane Energy's stock was worth around 11p a share last year (Source: Getty)

UK-based oil and gas firm Hurricane Energy today confirmed a "significant" upgrade to resources and first reserves at its Lancaster field in the West of Shetland region.

A new competent person's report (CPR) revealed the best estimate for recoverable volumes surged 162 per cent to 523m barrels of oil compared with the last CPR in 2013.

RPS Energy, which performed the report, said Lancaster's oil in place volume was 2.3bn barrels, an increase of 120 per cent.

The initial six-year early production system (EPS), which has proved and probable reserves estimated at 37.3m, was valued at $525m (£404.5m). It is set to come online in 2019.

The rest of the 523m barrels of oil are classified as 2C contingent resources, which means they are "development unclarified or on hold" until further field development is assessed.

A larger CPR including the Halifax and Warwick discoveries is due later this year, and Dr Rober Trice, chief executive, said the group is confident they will be a "material addition".

In March, the company made what it called the "largest undeveloped" oil find so far in the UK's waters at its Halifax field.

Trice said: "We are delighted to now have independent verification of the highly material uplift in the resources we have at Lancaster.

"It is also a landmark for Hurricane to have reserves assigned at the field relating to our planned EPS, for which we continue to advance plans, maintaining our target for first oil of the first half of 2019."

Sam Wahab, analyst at Cantor Fitzgerald, said: "Hurricane has today issued its updated CPR, which as expected, outlines a long period of drilling success for the company. The report was undertaken by RPS Energy concerning reserves and resources at the company's Lancaster field, West of Shetland, which attributes 2P reserves for the first time and details a highly significant increase in certified contingent resources.

"We reiterate our buy recommendation."

Shares fell somewhat in morning trading, edging down 1.56 per cent to 63p.

Related articles