Hurricane Energy plc said it ended 2021 in a much stronger position than at the start, with a “solid financial platform and very good operational performance” at its Lancaster field, west of Shetland.
FINANCES
For the period ended 31 December 2021, the company reported revenues of $240.5 million from seven liftings of Lancaster crude (2020: $180.1m from 12 liftings).
Cash production costs were of $28.2/bbl (2020: $17.9/bbl) while Hurricane generated $135.7m of free cash flow, equivalent to $36.2/bbl (2020: $74.2m, $14.6/bbl).
Profit after tax for the period was $18.2m (2020: loss after tax of $625.3m)
The company held net free cash of $51.5m (2020: $111.4m), and had net debt of $27.0m (2020: $118.6m).
Hurricane repurchased $151.5m of convertible bonds at average price of 86%, saving $29.5m in future principal and interest.
OPERATIONS
Production was within guidance with an average daily rate of 10,267 bopd (2020: 13,900).
The company reported operational uptime of 92.3%, covering planned and unplanned events.
Crude oil sales reached more than 10 million barrels with 3.6 Mbbls sold across seven cargoes in 2021.
The company received FDPA consent to allow for production below bubble point.
OUTLOOK
Hurricane forecast net free cash of at least $60m following bond repayment, assuming production in line with guidance and oil prices of at least $90/bbl.
The company said it would focus on efficient capital allocation to deliver most value for shareholders.
It would also consider opportunities within its existing portfolio and new assets.
OPTIMISATION
“This last year has been one of profound change for Hurricane,” added chief executive Antony Maris.
“The UK Government’s renewed emphasis on security of supply is welcome and we are working hard to identify how best to optimise capital allocation in future activities to build further value for our shareholders.
“We have opportunities both within our existing portfolio, and in new opportunities in the UK oil and gas sector.
“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.”