Hurricane Energy Plc (LON:HUR) is one of the most exciting development stories in the North Sea today, according to City broker finnCap.
It came at the end of a busy week for the oil firm, and the sector.
Analyst Dougie Youngson, in a note on the future of the North Sea, repeated a ‘buy’ recommendation for the oil firm which this summer confirmed a major oil project at the Lancaster field and earlier this week kicked off a fresh phase of exploration.
The analyst has a 72p price target, suggesting about 100% upside to the current price of 36.7p, and he highlights that the current two well exploration programme can add more value still.
Two new wells were drilled on the Lancaster field so far this year. Both have proved successful. The first hit a huge 620 metre oil column, in doing so it proved Hurricane Energy’s long held assumptions about the reservoir.
It teed up expectations that the Lancaster field is much larger than the pre-drill estimates that it hosted around 200mln barrels of resources – the group’s somewhat casual in house estimate was lifted to 300mln barrels, while external analysts have said it could host up to 500mln barrels.
The second well, drilled horizontally, was very successfully flow tested. It yielded strong production rates, with the flow reaching the maximum allowed by the testing equipment.
Meanwhile, upcoming work programmes at 88 Energy Ltd’s (LON:88E, ASX:88E) shale venture in Alaska can draw the attentions of ‘all the oil majors’, according to a report by Sydney based EverBlu research.
Analyst Gavin Van Der Wath, who says 88 Energy is a ‘buy’, reckons the upcoming drilling at project Icewine can double the explorer’s share price.
A successful appraisal well to confirm the shale project’s viability would give the company a value in the range of US$150mln and US$380mln (while upside scenarios approach US$1bn).
It can put 88 Energy in a strong position, according to the analyst.
Oil and gas group KrisEnergy Ltd (SGX:SK3) has reduced its working interest in the Block A Aceh production sharing contract to 15%.
The reduction is part of its strategy to reduce future capital expenditure and focus on high-value gas development in Indonesia.
Proceeds from the transaction will be applied towards funding KrisEnergy’s share of the capital expenditure for the Block A Aceh gas development.
The operator of Block A Aceh, onshore in Sumatra, Medco E&P Malaka, has acquired 26.67% of KrisEnergy’s working interest and increased its holding to 85%.
Meanwhile, broker WH Ireland has kicked off coverage of Kazakhstan-based Roxi Petroleum PLC (LON:RXP) with a meaty 20.8p price target but adds there is potential for this to treble.
This value was an assessment of prospects currently, but Roxi is in the process of further exploration and production testing and, potentially, the target price could rise to 70.5p if all of this work proves successful, said the broker.
Roxi has a 58.4% interest in the BNG Contract Area, which is located in the west of Kazakhstan 40km southeast of Tengiz on the edge of the Mangistau Oblast.
Tengiz is a 9bn barrel super giant field, Ireland notes, while Roxi’s licence area is massive at 1,702 sq km - equivalent to the area within the M25.
Elsewhere, Range Resources Ltd (LON:RRL) told investors it has now spudded its next development well in an ongoing drill programme in Trinidad.
The latest well, QUN 158R, is the fourth development well in the current programme.
It is located on the Morne Diablo field, targeting Upper Cruse and Lower Forest sands. It is a re-drill of a prior well, and the programme is expected to take around three wells to drill
San Leon Energy PLC (LON:SLE) told investors it has settled a number of disputes with Avobone relating to projects in Poland.
As a result the company will make payments to Avobone - for the final award in a 2015 international arbitration – amounting to €23.3 million plus interest.
The payment schedule begins with a €2mln payment in November, followed by €8mln in April, €8mln by mid-October and a final €5.3mln by the end of 2017. The outstanding balances will carry interest at 5%.
Finally, shares in Ascent Resources PLC (LON:AST) surged on Friday morning after a favourable ruling by Slovenia’s environment agency.
It has been told it won’t have to carry out a full environmental impact assessment prior to installing a new processing facility at the Petišovci gas project.
An appeal against the decision has been lodged. However, Ascent is confident the permit will be fully awarded next year.