Hurricane Energy PLC (LON:HUR) boss Dr Robert Trice described the group’s recent US$547mln funding as a “significant endorsement” as he highlighted another successful period for the West of Shetland oil firm.
The funding, a mix of convertible debt and equity, was a key component in the group’s recent success as it allowed the company to green-light the Lancaster field early production system (EPS), a campaign that is now in motion towards a target of ‘first oil’ by the first half of 2019.
READ: Hurricane Energy delighted’ as it quickens towards first oil at Lancaster field
“The equity and convertible bond placing announced in June 2017 now fully funds the first phase of development on Lancaster which will not only generate significant cash for the company but, importantly, will provide key production and reservoir data to enable a full field development of this very substantial oil field and unlock the potential of our wider fractured basement portfolio,” the Hurricane chief executive said in the oil firm's half yearly results statement.
Trice added: "We look forward over the coming months to announcing further key milestones in the EPS progression; and to publishing the revised CPR (competent person's report) on Halifax, Lincoln and Warwick.
On track
“We remain on track for first oil in 1H 2019 and look forward to updating our shareholders as this exciting development progresses."
Hurricane ended the first half, to June 30, with US$29.1mln of cash, although the balance sheet was “significantly enhanced” by the completion of the funding post-period end (the raise closed in July).
READ: Hurricane Energy lists convertible bonds onto The International Stock Exchange
The pre-revenue oil field developer reported a US$4.2mln loss for the six month period.
Looking forward to upcoming milestones for the EPS, Hurricane noted that the floating production (FPSO) vessel is on the way to Dubai where it will undergo upgrades and that regulatory approval for the project is expected shortly.
Desk-top work could also provide new catalysts, with a new competent persons report due to assess the scale of resources in Hurricane’s broader West of Shetland portfolio following the exploration drilling success of the last campaign.
In late afternoon trading, Hurricane shares were up 0.9%, or 0.25p at 28.0p.
finnCap analyst Dougie Youngson reiterated a ‘buy’ rating and 80p price target on Hurricane Energy shares.
In a note to clients, he said: “A transformational period for the company which saw the completion of the very successful drilling campaign on the Lancaster field, as well as the funding for the early production system.
“The company is funded and working towards first oil from the Lancaster field in H1 2019.”
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