Hurricane Energy PLC (LON:HUR) has been too harshly punished for the drill result from Warwick West says SP Angel analyst Sam Wahab.
That well - drilled in partnership with Centrica arm Spirit Energy - only flowed at a rate of 1,300 barrels per day, which is not commercial says Wahab.
The analyst added, however, that the key for Hurricane has always been the Lancaster field in the UK Continental Shelf and that is performing ‘exceptionally well’.
“The market can be fickle and Warwick West was never the main asset it was always Lancaster.”
In a statement today, Hurricane said it would generate US$165mln of revenue by the end of 2019, thanks to the success of the Lancaster field early production system (EPS).
Lancaster is set to have produced around 3.1mln barrels of crude for the year (after the May start-up) with the rate averaging 13,300 barrels of oil per day since coming online – the rate has been constrained while Hurricane gathers valuable production data.
Production rates are expected to ramp up in 2020 and guidance for the Lancaster EPS next year was maintained at 20,000 bopd.
"2019 has been a transformational year for Hurricane, as we saw first oil from the first fractured basement development on the UKCS,” said Dr Robert Trice, Hurricane chief executive.
“I am delighted with the performance of the Lancaster EPS and look forward to presenting what we have learnt and what we expect from this reservoir.”
Shares rose 9% to 32.8p today.