Hurricane Energy Preparing AIM IPO. Hires ‘Sedco 712’ Rig
Hurricane Energy plc, the UK oil company focused on hydrocarbon resources in fractured basement reservoirs, intends to seek Admission to the AIM market of the London Stock Exchange plc. AIM is a sub-market of the London Stock Exchange, allowing smaller companies to float shares with a more flexible regulatory system than is applicable to the main market.
Through an initial public offering (“IPO”) of its ordinary shares to institutional and other investors the Company will place a total of 41,860,465 new shares at a price of 43 pence per share, raising £18 million before expenses. It expects to have its shares admitted to trading on 4 February 2014. A further 106,733,642 shares will be issued on Admission in respect of the pre-IPO convertible loan notes and a Warrant issued to raise £31.4 million in March 2013 that convert to equity at IPO.
The two stage fundraising process, pre-IPO and at IPO, has resulted in total funds raised of £49.4 million which will be used for the Company’s operations and working capital.
Operations in 2014 will be focused on drilling and testing a horizontal appraisal well on the Company’s Lancaster basement oil discovery (2C Contingent Resources of 207 MMboe recoverable). With a successful flow rate, the well will be suspended for future use in development of the oil field.
Following Admission, the market capitalisation of Hurricane will be approximately £272 million.
Hurricane’s Nominated Adviser and Broker is Cenkos Securities plc. The Company’s AIM ticker will be HUR.
Also, the company says it has entered into an assignment agreement with Transocean Drilling UK Limited and Talisman Sinopec Energy UK Limited for the provision of the Sedco 712 semi-submersible drilling rig for the drilling and testing of the Lancaster basement oil discovery. The rig is expected to be available to start drilling in Q2 2014.
Well management company SPD Limited has been contracted to provide well construction and project management services during the drilling campaign.
The Lancaster discovery was made in 2009 and further tested in 2010. Hurricane’s Competent Person’s Report, prepared by RPS Energy Consultants Limited in November 2013, allocates 2C recoverable Contingent Resources of 207 MMboe to Lancaster. The discovery is located across blocks 205/21a, 205/22a and 205/26b West of Shetland on Frontier Licence P1368.
Robert Trice, Chief Executive Officer of Hurricane, commented: “We are delighted to be proceeding with an IPO of Hurricane in what is a difficult market for new issues in our sector. We believe that the investor support we have received is a strong endorsement of our story and the Hurricane team, and of course the potential for basement reservoirs in the UK. Hurricane has built a high quality asset base and, with the forthcoming drilling of the horizontal appraisal well on our Lancaster discovery, we believe we will rapidly advance our understanding of the potential productivity and ultimate scale of the Lancaster field’s recoverable reserves. We are also pleased to have seen further support during the listing process from existing shareholders, who have been very loyal to the company since its early days. In addition we are delighted to welcome new investors who have shown their commitment to our plans. We look forward to updating the market on the progress of our operations.”
January 22, 2014