Hurricane Energy PLC (LSE:HUR) shares gained more than 7% in Thursday’s early deals as the embattled UK offshore oiler said it expects to repay in full its outstanding bonds in July – and should still retain US$60mln of cash.
The company, which has spent the past couple of years in crisis mode, in today’s results statement for 2021 said it generated some US$240.5mln of revenue with a total of seven crude liftings over the course of 2021 as oil prices steadily rose.
With cash production costs at around US$28.2 per barrel the company generated US$135.7mln of free cash flow, to end the calendar year with US$51.5mln (and last week is told investors it had US$106mln at the end of March).
“Despite all the recent volatility in the oil price, with the expectation that oil prices remain over US$90 per barrel, post bond repayment we forecast to have over US$60mln of net free cash,” said chief executive Antony Maris.
“Against the backdrop of our demonstrable operational track record, financial discipline, and the significant rise in oil prices, we are preparing Hurricane for the future.
“Our thoughts are therefore fully focused on building on our position of increasing strength and value."
Production for 2021 amounted to 10,267 bopd, in line with prior guidance, and the company’s outlook for the current year sees the rate between 7,500 and 8,600 bopd with the reduced volumes resulting from scheduled maintenance, whilst the company also noted that it expects that water-cut in its production well will increase and well pressure is expected to continue its decline.
But it said that at current oil prices it still sees the Lancaster field as highly cash generative.
“We are working hard to identify how best to optimise capital allocation in future activities to build further value for our shareholders, whether through further investment in our existing portfolio, new opportunities in the UK oil and gas sector, or both,” Hurricane said.
In London, Hurricane shares climbed 0.71p or 7.66% to trade at 9.98p each.
At today’s share price, the rebounding small-cap oiler is now up some 160% in the year to date.