Oil and gas explorer Hurricane blown off course by setback at North Sea well

● Plans to link well to field hit the buffers ● Firm looks to ramp up Lancaster output

Shares in oil and gas firm Hurricane Energy fell sharply yesterday after a setback to its North Sea development plans.

In an operational update, the company and its partner Spirit Energy said they had decided it would not be possible to tie back a well in the West of Shetland area to the Aoka Mizu floating production vessel already operating on its nearby Lancaster field this year.

The Lincoln Crestal well could now be plugged and abandoned unless it gets an extension to its current suspension permit from regulators.

However, Hurricane said it is planning an accelerated programme at Lancaster, including the drilling of an additional production well later this year.

It said the move would enable it to fully use the capacity of the Aoka Mizu.

Hurricane’s chief executive Dr Robert Trice said: “We continue to focus on progressing opportunities towards full utilisation of the Aoka Mizu’s throughput capacity.

“A further Lancaster production well would allow us to evaluate the productivity of another part of the Lancaster reservoir, away from the two existing wells, whilst aiming to deliver additional wholly owned production and reducing per barrel costs.”

Hurricane and Spirit said they plan to seek consent from the Oil and Gas Authority to delay the abandonment of the

Lincoln Crestal Well in order to gather additional data during well testing.

It is looking at drilling and testing at least one well this year to determine the maximum vertical extent of the field.

If approval for the extension is not granted, Hurricane said the Lincoln Crestal well will be plugged and abandoned by next month.

Analysts at broker SP Angel said that although the likely plugging of the Lincoln Crestal Well will come as a blow to shareholders, they believe it should “not detract from the considerable operational progress made by Hurricane

across its portfolio”. They pointed out: “Continued strong performance from the Lancaster Early Production System with well productivity above pre-start up expectations with the facility availability running above 90 per cent is no mean feat in our view.”

Last week Hurricane said better-than-expected flows from its flagship Lancaster field saw its 2019 production hit three million barrels of oil, an average of 12,900 barrels a day since first oil in May.

Full-year results are expected to be published by Hurricane on 19 March.