Wednesday 14 July 2021

Hurricane Energy plc, the UK based oil and gas company, provides an update on Lancaster field operations and net cash balances as of 30 June 2021.

Lancaster Field Operations Update

As previously announced, on 8 June 2021, the electric submersible pump ("ESP") in the P6 well tripped, which led to Lancaster production being temporarily reduced while the root cause of the trip was investigated. The successful restart of the P6 ESP was announced on 16 June 2021.

The 23rd cargo of Lancaster oil, totalling approximately 530 Mbbls, was lifted in mid-June 2021.

The Aoka Mizu FPSO is currently undergoing its scheduled annual shutdown, which is expected to last for approximately two weeks. Immediately prior to the shutdown in early July 2021, the field was producing from the P6 well alone at 10,900 bopd with an associated water cut of 32%.

Financial Update

As of 30 June 2021, the Company had net free cash(4) of $134 million, compared to the last reported figure of $127 million as of 31 March 2021. The main movements over the three-month period were:

· Revenue of c.$69 million from two liftings of Lancaster crude in the second quarter resulting in an average realised price of c.$66/bbl, compared to an average Brent price of $69/bbl for the same period

· Operating costs and G&A of c.$36 million

· Net cash capital expenditure of c.$1 million

· Convertible bond coupon payments of c.$4 million

· Net movement to restricted cash of c.$12 million (including additional decommissioning security)

· Increase in net working capital of c.$9 million, the majority of which are accruals relating to the Lincoln-14 well plug and abandonment activity

The Company believes that net free cash provides a useful measure of liquidity after settling all its immediate creditors and accruals and recovering amounts due and accrued from joint operation activities, outstanding amounts from crude oil sales and after settling any other financial trade payables or receivables. It should be noted that the net free cash is calculated as at the balance sheet date and does not take into account future liabilities that the Company is already committed to. As such, not all of the net free cash would be available for repayment of the Convertible Bonds at their maturity in July 2022.