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Hurricane Energy: Centrica’s Spirit kicks off Warwick drill campaign

It is the first of three wells that aim to bulk up the Greater Warwick Area resources and take the project towards a field development scenario and 'first oil'

oil and gas operations
Hurricane retains 50% of the GWA and it doesn't pay for the drilling

Hurricane Energy PLC (LON:HUR) has announced the spudding of the Warwick Deep exploration well, the first to be drilled in partnership with Centrica PLC-backed Spirit Energy.

It is the first of three planned wells in the programme, which will assess the Greater Warwick Area (GWA), which comprises the Lincoln discovery and the previously untested Warwick prospect.

The GWA is believed to be a continuation of the large oil reservoirs seen at the Lancaster field, though the two areas are separated by a fault.

READ: Hurricane Energy's move into production will cap impressive story

Hurricane retains a 50% stake in the GWA following its farm-out deal to Spirit, which committed to fund and execute the drilling campaign.

In all, Spirit is to cover Hurricane’s costs in the GWA, up to US$387mln across five potential phases of work.

The proven Lincoln discovery was estimated to host some 604mln barrels of contingent resources, while Warwick’s prospective resource was pitched at 935mln barrels.

Clearly, a success in the Warwick Deep well could represent a significant upgrade to the GWA project whilst the overall three-well programme aims to bring it towards an initial development scenario.

In addition to the three wells planned this year, a further three appraisal/development wells are slated for a follow-up programme in 2020 – which could, all subject to results, see ‘first oil’ from the GWA either late next year or early 2021.

In the meantime, over the fault, Hurricane is advancing operation at Lancaster to deliver ‘first oil’ production in the coming months.

The Lancaster early production system subsequently aims to ramp up to a rate of 17,000 bopd, providing valuable cash flows and, importantly, provide de-risking production data that will support planning for a much larger field development in the future.

In the Greater Lancaster Area (GLA) – comprising Lancaster and the Halifax discovery – Hurricane sees some 1.7bn barrels of crude resources.

Spirit Energy is 69% owned by British Gas parent Centrica PLC (LON:CNA).

Quick facts: Hurricane Energy PLC

Price: 42.04 GBX

Market: LSE
Market Cap: £836.69 m

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Investor Update: Hurricane Energy produces oil to surface at its Lincoln...

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on 9/9/19

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