A fairly busy week for those involved in the black gold...
The successful UK offshore oiler, which raised more than £500mln of capital earlier this year, has announced a number of measures to recognise the company’s new size and scale.
Hurricane has been able to advance the large Lancaster field in Scotland’s West of Shetland region to the cusp of development for an early production system (EPS).
Hurricane recently greenlighted the EPS which will come online in 2019 and deliver up to 17,000 barrels of oil per day. The EPS will be a precursor to a larger development of the potential multi-billion barrel oil project.
The analyst, in a note, said that aside from a production upgrade, the statement also gave investors tangible proof that Tullow’s new policy of under-promising and over-delivering is bona fide, though he pointed to a potential refinancing as a key focus for investors.
The company on Tuesday revealed that the recently drilled Opuama-7 hadsbeen brought into production, with better than expected rates seen in well testing, and the drilling of the Opuama-8 well is due to start in December.
Together, the two wells are due to add more than 10,000 barrel of daily oil production to Opuama, which was yielding some 11,571 bopd this summer (according to interim results released in September).
Given the backdrop for small oil explorers, the £2.1mln fund raise was no mean feat but the cost was reflected in the heavy discount to the market price when the shares were suspended in May.
But now with cash secured the company can again concentrate on the next steps for the offshore prospect.
The La-8 well was drilled down to a target depth of 2,865 metres and it encountered some 84.5 metres of net gas intervals, across the upper and lower Logbaba formations – which exceeded expectations and is significantly more than the 58 metres seen in the successful recent La-7 well.
The company said this will allow it to focus its management and capital resources in the Levant region.
In a statement, it noted that the Moulay Bouchta contract expired in June and, at that time, the Moroccan authorities had indicated a willingness to extend the contract, however, as the company has not brought in a new partner it won’t now proceed with the project.
ERC Equipoise, IOG’s consultant, has also estimated an unrisked gross valuation of £159mln for the overall Harvey structure, and £129mln for the licence.