Hurricane Energy PLC (LSE:HUR) confirmed it is looking beyond next month’s bond repayment with chief executive Antony Maris telling investors he believes there are “exciting opportunities ahead” for the company.
The UK offshore oil producer told investors it banked some US$59.5mln from its latest oil shipment, in May, which was priced at US$110 per barrel. The next cargo is due at the end of July.
Hurricane said it had US$139mln of net free cash and after July’s bond repayment of US$78.5mln it expects it will retain over US$75mln (or US$90mln if Brent remains above US$120 for the next cargo) to take the business forward.
Although the company described the UK Government’s Energy Profits Levy (otherwise referred to as ‘the North Sea windfall tax’) as unhelpful, Maris said Hurricane could benefit from newly improved tax relief on new investment.
“Management and the board are working hard to assess and evaluate possible organic and inorganic investment opportunities,” the Hurricane chief executive said.
“Our industry works within the framework of long investment cycles and highly volatile commodity markets. Fiscal stability is key in supporting the investment decision making to meet the UK's energy transition targets and the introduction of the EPL is unhelpful in that regard. However, as a potential investor in future UK oil and gas assets, we also stand to benefit from investment incentives/relief.
“We believe there are some exciting opportunities ahead and that the Company is well placed to grow its asset base, deliver significant shareholder value and contribute to ensuring security of oil and gas supply for the UK.”
Production at Hurricane’s Lancaster field averaged close to 8,500 barrels of oil per day in the month of May, lower than last month, though the company said this was due to a planned two-day phase of tests which involved producing at reducing rates, which impacted the month’s average metrics.
Lancaster’s primary well, the P6 well, saw an average water cut of 44% which is in line previous months.
As of June 14, the well was producing 8,700 bopd.
The company noted that May’s crude pricing was set based upon the first five days of dated Brent quotes, and, the next cargo is due to be lifted in late July.
--UPDATED to correct error related to cash forecasts dependant upon future oil prices--