Post-Well Analysis

RNS Number : 6065R

Hurricane Energy PLC

15 September 2014

 

Embargoed: 0700hrs 15 September 2014

Hurricane Energy plc

("Hurricane" or the "Company")

Post-Well Analysis: Lancaster Appraisal Well 205/21a-6

Hurricane Energy plc (AIM: HUR), the UK-based oil and gas company focused on hydrocarbon resources in naturally fractured basement reservoirs, has substantially completed post-well data analysis following the successful testing of the 1km horizontal appraisal well 205/21a-6 in Q2 2014 at the Company's Lancaster oil discovery West of Shetland. The well was optimally located to benefit from a highly connected fault/fracture network and an underlying 300m oil column (Hurricane's - 2C estimate of field ODT).  The results from third party analysis combine to demonstrate a very good quality reservoir which could deliver single well rates of 20,000 STB/d - significantly ahead of initial expectations of well productivity.

Summary information:

·     As previously announced, the well test achieved a sustainable natural flow rate of 5,300 STB/d and a flow rate using artificial lift (using an electrical submersible pump) of 9,800 STB/d. Both rates were constrained by surface equipment.

·     Well flowed for a total of 78 hours and shut in for a maximum of 22 hours.

·     Shut in pressures indicate a rapid pressure response and no observable pressure decline.

·     Data from this well indicates that under production conditions and a moderate 120 psi drawdown the basement reservoir could deliver 20,000 STB/d from a single well.

·     PVT and geochemical analysis reconfirm the wellsite analysis that the oil is 38 degrees API and consistent with that produced from previous Lancaster wells.

·     Well productivity index of 160/STB/d/psi demonstrates a very good quality reservoir pressure capable of delivering sustained commercial flow under production conditions.

·     Tidal data and modelled well test pressure response indicate that the intervening fractured basement rock, as well as the seismic scale fault zones, contributed to flow. The tidal data is extremely important as it not only corroborates the pre-drill geological model but provides new analysis that demonstrates a highly permeable, well connected fracture network.

·     Pressure response indicates that the drilling programme was successful at minimising skin damage to the near wellbore environment.

·     No evidence of barriers within the fractured basement reservoir in the duration of this test.

·     Target faults identified from pre-drill seismic analysis were encountered as expected, providing the company with a high degree of confidence for future well placement.

·     Additional upside was encountered from an interval of previously undrilled Jurassic-Cretaceous sandstone. The sandstone is oil bearing, and has an average porosity of 16%; however further subsurface work is required to quantify the materiality of this reservoir sandstone.

·     Graphical representations of the well test data including Full Test History Match and Final Pressure Build-Up Derivative Match are available within the Communications section of the Company's website at www.hurricaneenergy.com.

Dr Robert Trice, Chief Executive, commented:

"I am delighted to report that our work on the well data gathered during the recent testing of Lancaster confirms our pre-drill geological model of the fractured basement, as well as significantly advancing our understanding of how the fracture network behaves. Importantly, the key metrics related to oil productivity are even better than expected providing us with further encouragement regarding the productive potential of Lancaster and our other basement assets.

"Such a level of productivity means that an early phase of field development and commercial production could be initiated with the addition of only one more horizontal well. As previously reported, we have a data room open for potential farm-inees, however the benefit of having two suspended proven producers and holding 100 per cent. of our acreage means that we have a broad range of options to progress the Lancaster Field development and our other assets."

-Ends-

Contact Details:

Hurricane Energy plc	Dr Robert Trice Chief Executive Officer	[phone]	[e-mail] www.hurricaneenergy.com
Cenkos Securities plc	Derrick Lee Nick Tulloch	[phone]	[e-mail] [e-mail]
Media enquiries: Vigo Communications	Patrick d'Ancona Ben Simons	[phone] [phone]	[e-mail]

Competent Person:

The technical information in this release has been reviewed by Dr Robert Trice, who is a qualified person for the purposes of the AIM Guidance Note for Mining, Oil and Gas Companies.  Dr Robert Trice, Chief Executive Officer of Hurricane Energy plc, is a geologist and geoscientist with a PhD in geology and has over 30 years' experience in the oil and gas industry. 

Glossary of Technical Terms:

STB/d - Stock Tank Barrel of oil per day

PVT - Pressure, Volume, Temperature

STB/d/psi - Stock Tank Barrel of oil per day per pound per square inch

API - A specific gravity scale developed by the American Petroleum Institute for measuring the relative density of various petroleum liquids, expressed in degrees

ODT - Oil down to, the depth at which the oil column penetrates.

Notes for Editors:

Hurricane is an oil and gas company focused on hydrocarbon resources in naturally fractured basement reservoirs. The Company's focus is to discover, appraise and develop oil reserves in basement rock and has successfully found oil on the UKCS. The Company has 444-470 Mmboe of 2C Contingent Resources and 432-442 Mmboe P50 Prospective Resources on acreage it controls 100% under licences P1368, P1485, P1835 and P1884.

The Group completed an IPO on the AIM market on 4 February 2014.

Strategy and Focus

The Group's primary objective is to increase shareholder value through the exploration, appraisal and development of fractured basement reservoirs. The Directors' strategy to achieve this is as follows:

1)            Concentrate on basement in proven petroleum systems

To date, the Group's basement exploration approach has been to focus on areas where oil had been found in basement structures by previous operators but not progressed on the basis that the prevailing opinion at the time was that such discoveries were not commercial. Once such potential areas have been identified, the Group undertakes a high grading process involving the evaluation of existing geotechnical data to establish if, and where, suitable prospects may be present.

The Directors believe this approach serves to reduce exploration risk on basement prospects by ensuring a working hydrocarbon system is present and by having available a comprehensive geotechnical database (both seismic and well data).

2)            Regional focus on West of Shetland

Hurricane has established an attractive portfolio of exploration and appraisal projects, focused on fractured basement prospectivity West of Shetland. The Directors believe that the potential scale of the recoverable resource within these fractured basement reservoirs presents the UK oil and gas industry with a significant opportunity to access a material new strategic asset.

3)            Ownership and operatorship during exploration and early stage appraisal

Hurricane has maintained 100% ownership and operatorship of all of its assets to date. The Directors believe that this puts the Company in a strong position to invite other industry participants to participate in the assets and share costs, in preparation for field development that will lead to producing assets.

4)            Maintain an influential equity position

As Hurricane progresses the Group's assets towards development it intends to seek potential partners through a farm-out or other process to assist in future development and implementation of the FDP whilst maintaining an influential equity position.

5)            Opportunities to acquire exploration licences in existing and new regions

Hurricane intends to participate in applications for new licence areas where the Group will be able to apply its technical expertise in basement reservoir evaluation to create value for its shareholders. The Directors believe that the Group's skill set and its track record to date leave it well positioned to secure further licences in countries with low geopolitical risk.

 

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