Hurricane Energy plc has decided to relinquish its interests in the Greater Warwick Area (GWA) joint venture (JV) with Spirit Energy plc in the UK North Sea.
DISCUSSIONS
The company said that the JV had reassessed its understanding of the area and considered all options for further appraisal and routes to possible development.
“Hurricane has determined that further appraisal and development costs to reach an economic development on the Warwick discovery within the remaining licence term is not feasible for the company.
“Further to discussions with the company’s JV partner, Spirit Energy, the GWA JV has decided to relinquish the P2294 licence area.
“The carrying value of the P2294 asset in Hurricane’s accounts of c.$4.1 million will be impaired. This impairment will be an accounting charge only and will not have any cash impact.”
Hurricane previously relinquished the Lincoln P1368(S) licence sub area.
OPPORTUNITIES
Chief executive Antony Maris added that there was no reasonable expectation that the P2294 licence could generate any near-term cash realisation.
“Thus voluntarily relinquishing the licence at this time allows the company to focus its time and financial resources on alternative and more attractive opportunities.”
NET FREE CASH
He added that following the recent May lifting, Hurricane had revised its cash forecast such that if oil prices remained over $90/bbl the company now forecast to have more than $70 million of net free cash post bond repayment.
“As such we are looking to utilise this cash to generate the best return for shareholders at an acceptable level of risk.”