Hurricane Energy announces 1H19 results

2019 Interim results summary

Financial results

• The Group recognised revenue for the first time relating to a single cargo of crude oil that was sold in the period. This resulted in the Group recording an operating profit of US$1.2 million (1H18: operating loss of US$4.7 million).
• The Group recorded a loss after tax for 1H19 of US$21.2 million (1H18: US$75.1 million).This loss includes a non-cash fair value loss on the embedded derivative element of the Convertible Bond of US$23.5 million.
• As at 30 June 2019, the Group had an unrestricted cash position of US$81.4 million (31 December 2018: $83.0 million).

Operational developments - Greater Lancaster Area

• Lancaster Early Production System first oil achieved on 4 June 2019, following introduction of hydrocarbons on 11 May 2019.
• Lancaster has been producing at an average of approximately 14 100 bpd from first oil to latest lifting (completed on 17 September 2019).
• Hurricane has sold over 1.6 million bbl of oil across four cargoes to date.
• Overall system availability on the Lancaster Early Production System has exceeded long-term guidance of 85%.

Operational developments - Greater Warwick Area

• Three well 2019 drilling campaign being carried out in partnership with Spirit Energy using the Transocean Leader semi-submersible rig.
• 'Lincoln Crestal' well (205/26b-14).
• - Drilled to a total depth of 1780 m TVDSS, including a 720 m horizontal section of fractured basement reservoir and successfully flow tested.
  - Maximum stable flow rate of c. 9800 stb/d on electrical submersible pumps, 4682 stb/d under natural conditions.
  - Lincoln confirmed to contain light, 43° API oil.


• 'Warwick Deep' well (205/26b-13Z).
• - Drilled to a total depth of 1964 m TVDSS, including a 712 m horizontal section of fractured basement reservoir.
  - Initial analysis indicates that the well intersected a poorly connected section of the fracture network - it did not flow at commercial rates, producing a mixture of drilling brine, water, oil and gas,and so was plugged and abandoned.
  - Encountered oil shows, with gas chromatography indicating light oil and a DST oil sample which laboratory measurements indicate to be alight oil of 40°.

Outlook

• Lancaster Early Production System 2019 full year production guidance of over 2.8 million bbl (approx. 12 500 bpd from first oil).
• Warwick West, third well in 2019 Greater Warwick Area programme, due to be spudded shortly.
• Long lead items for Greater Warwick Area 2020 well programme have been ordered, rig contract expected to be signed shortly.