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Hurricane Energy’s Warwick West well confirms oil discovery

A discovery in the Warwick West rounds off a three-well drill programme alongside Centrica-backed venture partner Spirit Energy.

Hurricane Energy PLC - Hurricane Energy’s Warwick West well confirms oil discovery
The Warwick West well flowed 1,300 bopd in a test

Hurricane Energy Plc (LON:HUR) has revealed results from the Warwick West well which confirmed a discovery and measured oil flows.

The success rounds off a three well drill programme and marks a more positive result, after it kicked off with the Warwick Deep well which, in July, encountered a ‘poorly connected’ section of reservoir and failed to flow hydrocarbons at commercially viable rates.

In an 85 hour well test, the Warwick West reservoir flowed at a maximum rate of 1,300 barrels of oil per day.

In the statement, Hurricane noted that it was not able to reliably measure a stable flow rate using an electric submersible pump as the well was still in the process of cleaning-up.

READ: Barclays expects Hurricane to “outperform”

"We are pleased to have made another discovery with the Warwick West well,” said Dr Robert Trice, Hurricane Energy's chief executive.

“The flow test results confirm the presence of light, mobile oil. The impact that this well will have on how the company views the GWA accumulation and its associated volumetrics will require further technical analysis.”

Trice noted that along with joint venture partner Spirit Energy, part-owned by Centrica, the company will now assess an optimal appraisal strategy for the Greater Warwick Area – following the completion of the three wells.

Hurricane owns a 50% interest in the Greater Warwick Area (GWA) alongside Spirit - also with 50%. The GWA comprises Warwick and also the Lincoln discovery.

The separate Greater Lancaster Area (GLA) comprises the producing Lancaster field and the Halifax discovery, and, it remains wholly owned by Hurricane.

Lancaster early production system in line with guidance

Additionally, Hurricane updated on its ongoing production from the Lancaster field.

Lancaster’s early production system (EPS) commenced back in June and it released its sixth crude cargo on 14 November, taking total oil sales to 2.5mln barrels.

Hurricane told investors that production rates remain in line with its fourth-quarter guidance, of 11,000 barrels of oil per day (bopd).

It noted that flow rates from the EPS are presently constrained, as anticipated, by system availability and its need to gather well data. Specifically, the company explained that this data collection exercise requires it to have separate periods of production from the 205/21a-6 and 205/21a-7Z wells separately in order to assess fluid dynamics and measure reservoir performance without interference.

This phase of flow periods is expected to complete later in December, Hurricane said.

Trice said that “progress is being made in our understanding of the Lancaster reservoir.”

He added: "In 2019 we have generated a wealth of new data from both the GWA and Lancaster and I look forward to presenting our findings in detail at our proposed Capital Markets Day in Q1 2020."

Quick facts: Hurricane Energy PLC

Price: 5.735 GBX

Market: LSE
Market Cap: £114.23 m

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