Hurricane Energy PLC (LSE:HUR) told investors that the Lancaster continued to produce oil at a rate of around 9,500 barrels per day.
In the month of January the company produced 299,000 barrels of crude, with an average rate of 9,639 barrels per day – and the average water cut was 40%, totalling the equivalent of 196,000 barrels.
On January 25, the company dispatched its 27th cargo of oil from the Lancaster field which amounted to some 530,000 barrels of crude, priced at US$81.40 per barrel, and it noted that the next oil shipment will take place in late March.
The West of Shetland offshore oil producer also told investors that, as anticipated, the UK regulator has now formally requested that the company lodge additional funds as decommissioning security, and, whilst it remains in talks to determine the exact amount due, the company expects it will be up to £5.7mln due later in the current quarter.
That will increase the amount held in trust for decommissioning to £33.7mln, from £28mln.
Also in January, Hurricane received US$3.2mln of cash rebates relating to R&D tax claims for the 2019 financial year, and said a furtherUS$1.3mln claim for the 2020 tax year is still under review and anticipated later this quarter.
Hurricane, which is in a race to generate enough cash to meet bond maturity later this year, said it had US$85mln of net free cash at the end of January, up from US$50mln at the end of December.
Some US$78.5mln of Convertible Bonds remain outstanding and due in July.
“It should be noted that the net free cash is calculated as at the balance sheet date and does not take into account future liabilities that the company is already committed to but have not yet been accrued. As such, not all of the net free cash would be available for repayment of the remaining outstanding Convertible Bonds at their maturity in July 2022,” Hurricane said in a statement.
In London’s early deals Hurricane shares gained 3.4% to trade at 5.35p each.