Hurricane Energy PLC (LON:HUR) has generated its first-ever revenues after selling a tanker-load of oil from the Lancaster field, which sits about 100km off the west coast of the Shetland Islands.
An FPSO (floating production storage and offloading) vessel – called the Aoka Mizu – has been stationed above Lancaster since March, and Hurricane reported earlier this month that it had achieved ‘first oil’ at the project following the commencement of the Early Production System (EPS).
The Amundsen Spirit shuttle tanker has now lifted that oil from the Aoka Mizu and is taking it back to Rotterdam, where it will be refined and sold on by its new owner.
BP Oil International marketed the cargo, as per the terms of the offtake agreement.
“First lifting from the Lancaster EPS marks the generation of Hurricane's first revenue,” said chief executive Robert Trice.
“We are now building the cash flow necessary to invest in the further appraisal and development of Hurricane's basement assets.”
Early production system ramping up
The oil has been produced from EPS development at Lancaster, which, as well as giving Hurricane a small cash flow, is primarily in place to give bosses longer-term data to help them better understand the project.
In the initial phase of the EPS, the company intends to gradually ramp up facilities over a six-month period.
The plan is for the EPS to produce around 9,000 barrels of oil per day (bopd) for the first three months before increasing that to 13,000 bopd in the next three-month period.
After that, Hurricane expects to be producing nearer to 17,000 bopd, which is about 85% of total capacity and the long-held target for the EPS.
Management reckon they need a year’s worth of production data in order for them to have a “clear view of the reservoir” and how best to develop it.
In early afternoon trading, shares in Hurricane Energy were 1% lower at 55.15p, with investors focused on the company's next move.
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