Hurricane Energy impressed by Lancaster flow rate

Hurricane Energy plc has completed the testing phase of its key horizontal appraisal well in the Lancaster fractured basement oil discovery West of Shetland.

The well will be suspended as a future producer. The company’s shares jumped 48% following the announcement.

Production tests achieved a sustainable oil flow rate using an Electrical Submersible Pump (ESP) of 9,800 stock tank barrels of oil per day (STB/d), the established oil flow rate being constrained by the capacity of the surface test equipment. The Lancaster Field, which is 100 per cent. owned by Hurricane, has estimated 2C Contingent Resources of 207 million barrels of oil equivalent (MMboe).

The testing programme was designed to establish whether commercial hydrocarbon flow rates could be delivered from a 1km horizontal well drilled through faulted and fractured basement rock (granite) under both natural flow and artificial lift conditions. Artificial lift was achieved through the installation of the down-hole ESP, the inclusion of which was to investigate potential flow rates that could be expected under production conditions.

The headline test results are:

– Natural flow – maximum sustainable flow rate of 5,300 STB/d

– Artificial lift (using an ESP) – maximum sustainable flow of 9,800 STB/d (the established oil rate being constrained by surface test equipment)

– Produced water – 340 barrels of drilling brine were produced during the test of which 20 barrels were recovered during natural flow

– Oil type – 38o API

The Company anticipates making a further announcement following completion of operations and the rig moving off location.

Dr Robert Trice, CEO of Hurricane, commented from the Sedco 712 drilling rig: “I am delighted to report the successful completion of our testing operations which have achieved hydrocarbon flow rates in the upper range of our pre-drill estimates. The maximum sustainable flow rate of 9,800 STB/d is particularly impressive as it was achieved despite being constrained by surface equipment. Whilst the artificial lift rates are important, the fact that the well also flowed oil at 5,300 STB/d unaided (natural flow) is a clear demonstration that Hurricane’s plans for progressing to a Lancaster field development are technically viable.

I consider this year’s operational result to be major step in further de-risking the Company’s 2C Contingent (444-470MMboe) and P50 Prospective (432-442MMboe) resources and very important as we seek to enhance shareholder value. This successful outcome reinforces the potential importance of basement resources as a strategic resource for the UK.”