Hurricane Energy plc oil production fell by 700 barrels during Q3 2020 compared with the previous quarter as production came from just one well in the Lancaster field on the Rona Ridge, west of Shetland.
PRODUCTION
During Q3, production was at an average rate of 13,600 bopd, lower than the 14,300 bopd average rate in Q2, with total production of 1.25million barrels in Q3, a fall from 1.3m in Q2.
Water cut was measured at 26% in Q3 compared with 21% in Q2.
The quarterly decrease was due to a number of factors including the shut-in of the 205/21a-7z well from early August, a controlled shutdown of the floating production storage and offloading (FPSO) for repairs in August 2020, scheduled annual FPSO maintenance in early September 2020, and a short shut-in of the 205/21a-6 well in order to gather data the end of the period.
The company has been producing from the 205/21a-6 well alone since 11 September.
Hurricane’s current production is circa 14,500 bopd on natural flow with a water cut of circa 19%.
SCHEDULE
“In line with the company’s expectations, the 205/21a-6 well is exhibiting a limited decline in oil production rate accompanied by a limited increase in water cut,” said the company in a statement.
“Average production guidance of 12,000 – 14,000 bopd for the period 1 September 2020 to 31 December 2020 remains unchanged.
“The 17th cargo of Lancaster oil is scheduled for lifting in mid-October 2020.”
FINANCES
Hurricane announced it had cancelled its decommisioning bond as, following the fall in oil prices and the recent downward revision to the Lancaster field’s reserves, the bond provider requested that the company provide cash collateral for 100% of the bond’s value.
The company will hold £16.8 million ($21.7m) of cash in trust for post-tax security for the estimated cost of decommissioning the production wells, subsea infrastructure and related FPSO costs for the Lancaster early production system.
In September, the company reported losses after tax for the first half of the year of $307.7m compared with losses of $21.4m during H1 2019.