Hurricane Targets FDP for Year End
Monday 5 December 2016
Fractured basement specialist Hurricane Energy intends to submit plans to the UK authorities as soon as this month for the first phase of development at its much-anticipated Lancaster field.
In another signal of growing momentum on the West of Shetland scheme, chief financial officer Alistair Stobie told an industry audience that Hurricane will hand in a field development plan (FDP) for the Lancaster early production system (EPS) to the Oil & Gas Authority (OGA) in December.
Early last week, Hurricane signed up Dutch floater contractor Bluewater Energy Services’ Aoka Mizu floating production, storage and offloading vessel to deploy as the EPS, the first step towards unlocking the full potential of its assets that sit mainly on the Rona Ridge.
The progress follows summer appraisal drilling on Lancaster and an ongoing exploration campaign on two nearby prospects – Lincoln and Halifax -- that are providing new clues about the resource potential of the Greater Lancaster Area.
“In December of this year we will put in an FDP submission,” Stobie said in a presentation to the Future of North Sea Oil & Gas conference in London last week.
There is growing excitement in many industry circles surrounding Lancaster but risks and hurdles remain despite the recent momentum.
In a poor market, Hurricane has managed to bring in about $120 million in a couple of fundraisers this year, to cover the cost of its drilling, including from one notable new investor in private equity fund manager Kerogen Capital.
Crucially, however, the firm has not yet convinced investors to help foot the $400 million bill for the first-phase EPS, despite talks with several parties about bringing in a farm-out partner.
Stobie told the conference he is confident Hurricane will raise the capital to move the project forward even if it has to do so without a farm-in.
“We will reach a final investment decision during the second quarter next year and if we have to do that standalone, we will do that standalone,” Stobie said.