Hurricane Energy announces final results for Y/E 31 December 2016
Friday, May 12, 2017
Hurricane Energy plc, the UK based oil and gas company focused on hydrocarbon resources in naturally fractured basement reservoirs, announces its final results for the year ended 31 December 2016.

Highlights:


· Portfolio of the largest currently undeveloped discoveries in the UKCS 100% owned

· 2P Reserves of 37.3 million barrels of oil, attributed to the six year early production system ("EPS") (62 million barrels on a 10 year EPS) at the Lancaster field

· 2C Resources of 691 million barrels - Lancaster and Whirlwind (oil case)1

· Lancaster field now proceeding to first phase of development - first oil targeted for H1 2019 at approximately 17,000 barrels of oil per day

· 2016 pre-tax loss of £4.7 million (2015: pre-tax loss of £5.5 million)

· £126.2 million raised in 2016 to fund drilling programme

· Ended 2016 with £82.2 million2 in cash (2015: £9.9 million)

1 2P Reserves are taken from the competent person's report prepared by RPS Energy Consultants Limited in May 2017 (the "2017 CPR").  The 2C Resources are a summation of the Whirlwind (oil case) 2C Resources in the 2013 CPR (being barrels of oil equivalent) and the Lancaster 2C Resources in the 2017 CPR.  (The 2017 CPR only addressed the Lancaster Field)

2 Includes restricted cash of £9.9 million.

Operations:


·Successfully drilled and tested the 205/21a-7 Pilot Well and the 1km 205/21a-7Z Horizontal Sidetrack Well on Lancaster during 2016

o  Pilot Well confirmed the presence of oil significantly below structural closure

o  Horizontal Production Well produced at maximum stable rate of 15,375 stb/d (using an Electrical Submersible Pump); and completed well stock required for the first phase of the Lancaster field development, the EPS

o  Wells significantly improved the Company's understanding of the reservoir and expected performance of the first phase of Lancaster's development, the EPS

·Fractured basement reservoir discovery* made at Lincoln Well during 2016

o  Preliminary data analysis indicates that a very significant hydrocarbon column of at least 618 metres true vertical thickness ("TVT"), comparable to that found at Lancaster

o  Oil down to was observed at approximately 520 metres TVD below structural closure

o  Lincoln discovery is a separate hydrocarbon accumulation to Lancaster, separated by the Brynhild fault

·Fractured basement reservoir discovery* at Halifax Well (post year-end)

o  Preliminary data analysis indicates that a very significant hydrocarbon column of at least 1,156 metres TVT is present within the basement extending well below local structural closure (which is at 1,040 metres true vertical depth subsea ("TVDSS"))

o  Well results indicate that Lancaster and Halifax have the potential to be a single hydrocarbon accumulation

Dr Robert Trice, Chief Executive of Hurricane, commented:

"2016 was a transformational year during which we were able to raise the funds necessary to take advantage of low oil field services rates and the availability of the Transocean Spitsbergen rig to start a drilling campaign that would last 265 days. The continuous drilling operations were highly successful and resulted in two further basement discoveries*, a very substantial uplift in resources, the complete production well stock required for the EPS and a wealth of reservoir information to allow us to progress with the first phase of development for Lancaster on schedule for first oil in H1 2019.

"Looking ahead, the funding of the EPS will be a significant moment in 2017. We continue to progress a range of financing discussions with a view to securing the best returns to shareholders. Our recently published CPR on Lancaster reinforces the scale of the resource we have and we look forward to updating the market further."

About Hurricane

Hurricane was established to discover, appraise and develop hydrocarbon resources associated with naturally fractured basement reservoirs.

Hurricane acreage is concentrated on the Rona Ridge, West of Shetland.  The Lancaster licence, the Company's most appraised asset, has combined 2P Reserves and 2C Resources of 523 million barrels.  In addition, the Company has 205 million barrels of oil equivalent on its Whirlwind licence (under the Whirlwind oil case).

During the 2016-2017 drilling campaign the Company made two significant discoveries* at Halifax and Lincoln, indicating that the Greater Lancaster Area and the Greater Warwick Area have the potential to be two large accumulations.

* Discovery - This classification is consistent with SPE/AAPG/WPC and SPEE guidelines for Petroleum Resource Management - Determination of Discovery Status

For more information, please visit: https://www.hurricaneenergy.com

For additional information on this project, please visit our ProjectsOGP database
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