Hurricane/media/Files/H/Hurricane-Energy... · –Repair and life extension (to allow up to 10...

HurricaneBasement Reservoir Specialists

Annual General Meeting

7th June 2017

HUR-COR-SHA-PRS-0005-0

Hurricane | AGM | 07 June 2017

Agenda

2

1 Chairman’s Statement

2 CEO Update

3 Resolutions

4 Q&A


Chairman’s Statement

3


2 CEO Update

3 Resolutions

4 Q&A


Share Price Performance

4

Note: As at close 05-Jun-17

10

20

30

40

50

60

70

80

Reb

ase

d S

har

e P

rice

(G

Bp

)

Hurricane AIM O&G Brent 12 Months Ago Last Price % Movement

Hurricane (GBp) 16.97 46.25 172.5%

AIM O&G 1,076.70 1,323.39 22.9%

Brent (USD) 49.68 49.22 -0.9%

September - Lancaster Pilot Well Completion

March – Halifax Well Completion

December - Lincoln Well Completion

October - £74.4m Placing and Open Offer

September – OPEC Production Cap Announcement

October - Completion of 7Z Horizontal

Sidetrack

November – OPEC Production Cuts


Market Capitalisation – London Ranking

5

Note: As at close 05-Jun-17

-

500

1,000

1,500

2,000

2,500

3,000

3,500

Mar

ket

Cap

($

m)

AIM

Main Market

Premium Listing

FTSE 250 Constituent


CEO Update

6


2 CEO Update

3 Resolutions

4 Q&A


Lancaster Resources – Drilling Summary

7

Pre-Production Drilling 2016Proof of Concept 2014Initial Appraisal 2009 - 2010

205/21a-4– Confirmed presence of

light moveable oil– Confirmed presence of

an extensive oil column– Penetrated aquifer in

porous and permeable formation

205/21a-4Z– Two DSTs performed– Suspended for use as a

future producer/re-entry

205/21a-6 Horizontal Well– DST testing max flow of 9,800

stb/d with an Electrical Submersible Pump (ESP)

– Suspended to be a future producer

– PI of 160 STB/d/psi– No pressure barriers in reservoir

identified during testing– No formation water produced

205/21a-7 Pilot Well– DST testing max flow of 11,000 stb/d

with ESP support– Confirmed minimum oil water contact

of 1,678m (670m hydrocarbon column)– Penetrated aquifer interval is porous

and permeable– No pressure barriers in reservoir

identified during testing

Discovery

205/21a-7Z Horizontal Well– DST testing max sustainable flow of

15,375 stb/d with ESP support– Suspended to be second producer for

EPS– PI of 147 STB/d/psi– No formation water produced– No pressure barriers identified

Lancaster drilling history and key results


Lancaster Resources – Drilling Impact

8

TVDSS True Vertical Depth Subsea

OWC Oil Water Contact

ESP Electrical Submersible Pump

CPR Competent Persons Report

205/21a-6

205/21a-4 205/21a-4Z

205/21-1A

P1

36

8 B

loc

k B

ou

nd

ary

Max ESP rate 9,800 stb/d 205/21a-6 (2014)

Mobile oil swabbed 205/21a-4 1,597m TVDSS

205/21a-7Z

Max ESP rate 15,375 stb/d 205/21a-7Z (2016)

1,597m TVDSS(2017 CPR 1C OWC)

1,380m TVDSS(4-way dip closure)


Management View OWC 1,678m TVDSS1


205/21a-7

Wireline oil samples205/21a-7 Deepest at

1,669m TVDSS

Note: Indicative schematic, not to scale; References to CPR are to RPS May-17 CPR; 1.Hurricane management base case OWC and high case ODT in RPS May-17 CPR

• Hurricane’s 2016 Lancaster drilling was undertaken to further de-risk the asset ahead of FID and take advantage of a low operational cost base

• 205/21a-7 data confirmed the Company’s interpretation of an extensive oil column and productive reservoir

• 205/21a-7z confirmed the productivity potential of the reservoir and was successfully suspended as a horizontal producer completing the well stock ahead of FID

Lancaster well schematic


Lancaster Resources – New CPR

Source: RPS Nov-2013 CPR; RPS May-2017 CPR; Note that PRMS advises that arithmetic addition of resources is not statistically correct; 2. Reserves designation assumes regulatory approval and project sanction of the Lancaster EPS

CaseInitially In-Place

Volumes Reserves Potential Reserves1

Contingent Resources

Reserves + Contingent Resources

6-year EPS only 10-year EPS FFD

Low / 1P / 1C 1,571 28.1 44.5 129.1 157.1

Best / 2P / 2C 2,326 37.3 62.1 486.1 523.4

High / 3P / 3C 3,333 49.3 88.7 1,116.7 1,166.0

60 200

437

28 37 49 129

486

1,117

157

523

1,166

-

400

800

1,200

1C 1C/1P 2C 2C/2P 3C 3C/3P

Re

serv

es

/ R

eso

urc

es

(mm

stb

)

RPS CPR 2013 Resources RPS CPR 2017 Reserves RPS CPR 2017 Resources

162%

162%

167%

Evolution of reserves and resources at Lancaster (Oil, gross/net, mmstb)

In Place Volumes quoted on an on block basis (based on P1368). Quoted values are totals of probabilistic volumes for Rona, Victory and Basement reservoirs. Assumes that operations continue without interruption with the FPSO remaining on station for the duration of the EPS.

1. Reserves based on EPS duration of 6 years. Under the scenario where the EPS is extended to 10 years, additional volumes would qualify as reserves, as indicated. In this event 1C, 2C, 3C quoted above would drop by 16.4, 24.8 and 39.4 mmstb respectively.

RPS classify Lancaster Contingent Resources as ‘Development Unclarified or On Hold’, these resources are associated with potential full field development based on analogue recovery factors without applying any secondary recovery techniques

Updated CPR Figures (Oil, gross/net, mmstb)

New CPR supports the Company’s view of an extensive oil column and productive reservoir, increasing Lancaster resources by over 160% and allocating 37 – 621 mmstb to 2P reserves2

9


Lincoln Result

10

• Lincoln is a discovery having encountered a 660m TVD minimum hydrocarbon column

• The reservoir is highly fractured and demonstrably permeable with an average porosity consistent with Lancaster

Note: 1. Hurricane management base case OWC and high case ODT in RPS May-17 CPR

Lancaster OWC 1,678m1 TVDSS

Structural closure 1,820m TVDSS

Pre-drill ODT based on well 205/26-1, 2,135m TVDSS

Hurricane revised ODT based on well 205/26b-12, 2,258m

TVDSS


Lincoln & Warwick Potential Single Accumulation

• The Company believes that the penetrated ODT indicates that:

a) Lincoln and Warwick are probably a single hydrocarbon accumulation (“Greater Warwick Area” / GWA), and

b) Lancaster and Lincoln are separate accumulations

• Further technical work is ongoing ahead of a new CPR in which Lincoln and Warwick resource estimates will be provided


Note: 1.Hurricane management base case OWC and high case ODT in RPS May-17 CPR

11


Halifax Result

12


Hydrocarbon Thickness 1,156m

TVT (minimum)

Cenozoic undiff.

• Halifax is a discovery encountering a hydrocarbon column in excess of 1km TVT

• Despite this success, there were challenges in achieving a successful DST which the Company attributes to formation damage

• The Company suspended the well with the objective of a future re-entry to confirm hydrocarbon flow to surface and/or oil water contact

• The reservoir is highly fractured and has fracture and porosity characteristics consistent with Lancaster

Note: 1.Hurricane management base case OWC and high case ODT in RPS May-17 CPR


Summary of the 2016-2017 Drilling Campaign

• Campaign completed on budget

• Lancaster operations successfully de-risked the Lancaster field resource ahead of FID resulting in a substantial uplift in resource volumes, assignment of reserves1 and the realisation of the well stock required for the EPS

• Lincoln resulted in a discovery which the Company believes supports Lincoln and Warwick being a single hydrocarbon accumulation (GWA) which, if proven to be productive, could prove to be a larger resource than the Lancaster field

• The Halifax data evaluated so far give the Company confidence that the encountered hydrocarbon is associated with a permeable fracture network. This interpretation is expected to be supported through an optimally planned re-entry and further formation evaluation

• The 205/21a-7 and Halifax well results support the Company’s view that the Greater Lancaster Area “GLA” represents a significant and continuous hydrocarbon accumulation and is progressing its analysis, planning and commercial efforts with the objective of confirming this interpretation

13

Note: 1. Reserves designation assumes regulatory approval and project sanction of the Lancaster EPS


Ongoing Subsurface Work

14

• Integrated data evaluation of Lincoln and Halifax ahead of a revised CPR

– This work includes on-going studies comprising:

Core, special core, NMR, petrophysical, geochemical and other specialist third party analysis

Revised fault mapping of the GLA and GWA

• Lancaster

– Next phase of reservoir simulation of the Lancaster field

– Further seismic fault modelling

– Ongoing work in support of EPS

• Once the above has been completed, work will focus on:

– Review of Halifax, with respect to developing a re-entry programme


EPS Status & Target Timeline

15

Overview of key milestonesLLI commitment and fabrication

FPSO arrival in yard

Delivery of buoy and mooring system

Subsea equipment installation

FPSO arrival on field

1

2

3

4

5

2016 2017 2018 2019

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Complete FEED 1

LLI Commitment (Trees and Controls)

FEED 2

GeoTech and GeoPhys Surveys

LLI Commitment (FPSO & SURF)

FPSO Upgrade Yard Contract Award

FPSO Aoka Mizu arrival in Upgrade Yard

Re-enter and Complete Wells 6&7Z (Window)

Delivery of Mooring System

Boulder Clearance (TBA) (Window)

Mooring System Installation (Window)

SURF Installation (Window)

FPSO Ready for Sail Away

FPSO Arrival in Field (Window)

Buoy Hook-Up (Following FPSO Arrival)

Ready for Start-up (Following Buoy Hook-up)

First Oil

1

2

3

4

5



16

2016 2017 2018 2019

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

LLI Commitment (Trees and Controls) 1LLI commitment and fabrication

• Xmas trees currently on TechnipFMC production line

1

Note: Top photo is of one of Hurricane’s trees on the production line, bottom photo shows an example of a similar completed tree



17

2016 2017 2018 2019

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

FPSO Aoka Mizu arrival in Upgrade Yard 2FPSO arrival in conversion yard2

• Scope includes:

– Repair and life extension (to allow up to 10 years on field)

– New mooring system and turret buoy (turret system in FPSO already exists)

– Limited vessel and marine upgrades (primarily greenwater protection)

– Limited topsides upgrades

New Buoy & New HV Swivel

VSD Cabinets

Additional Lifeboats

Inlet Heater & Fuel Gas Compressor

Replace:1 x thruster + 1 x Generator Additional Steam Generator

Repaint Vessel

Greenwater Protection

Green areas on schematic illustrate planned modifications



18

2016 2017 2018 2019

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Delivery of Mooring System 3Delivery of buoy and mooring system3

He

igh

t of 1

1 L

on

do

n B

us

es

~ 5

0m

10m

New mooring system

• 3x4 mooring system

• Chain/wire legs, (1170m of chain & wire) links and shackles

• 12 drag anchors (37 te each) or piles (100 to 130 te each)

New buoy

• New disconnectable buoy with riser slots and buoyancy for EPS and future incremental risers

– Weight 1,000 te

– Height 15 m

– Diameter 18 m

Turret

• Modified existing turret (see following slide), key dimensions:

– Main bearing diameter 13 m

– Overall height 50 m

– Overall weight 1,520 te

• Trial fit of new buoy scheduled for late Q1 2018

• Buoy and mooring system scheduled to be issued to installation contractor late Q2 2018



19

2016 2017 2018 2019

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

SURF Installation (Window) 4Subsea equipment installation & well completions4

• Well completions and installation of subsea equipment to take place during summer 2018 weather window

• Subsea equipment installation to include:

– Installation of flowlines, manifold, umbilicals, risers

– Installation of buoy and mooring system

– Rock dumping and mattress placement



20

2016 2017 2018 2019

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4


First Oil

5FPSO arrival on field5

• Following installation of buoy, FPSO only needs a short period of calm weather to be able to hook-up

• Aoka Mizu is able to pull in buoy independently, without other support vessels

• First oil to follow shortly thereafter – target H1 2019



21

2016 2017 2018 2019

Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

Complete FEED 1

LLI Commitment (Trees and Controls)

FEED 2

GeoTech and GeoPhys Surveys

LLI Commitment (FPSO & SURF)

FPSO Upgrade Yard Contract Award

FPSO Aoka Mizu arrival in Upgrade Yard

Re-enter and Complete Wells 6&7Z (Window)

Delivery of Mooring System

Boulder Clearance (TBA) (Window)

Mooring System Installation (Window)

SURF Installation (Window)

FPSO Ready for Sail Away


Buoy Hook-Up (Following FPSO Arrival)

Ready for Start-up (Following Buoy Hook-up)

First Oil

1

2

3

4

5

Overview of key milestonesLLI commitment and fabrication

FPSO arrival in yard

Delivery of buoy and mooring system

Subsea equipment installation

FPSO arrival on field

1

2

3

4

5


Staffing Development and Retention

22

• Resourcing to deliver FID is in place, including existing staff and core contractors and over 100 subcontractors

• Successful completion of FID will initiate a programme designed to approximately double the Company’s staff levels and increase the numbers of contractors to accommodate new skill sets related to the Field Operatorship of the Lancaster Phase 1 development and production prior to full field development

– The staffing process has already commenced and key personnel have already been identified to be employed/contracted on FID

• Successful attraction of a farm in partner will also result in the need for additional geoscience staff

• Attracting specialist and high quality staff is underpinned by the Company’s ability to provide a competitive remuneration package


Long Term Vision

23

• The Company’s long term vision is to optimise the value of its assets through a combination of:

– Progressing the Lancaster EPS and ultimately full field development

– Increasing resource base through further appraisal of other assets

– Attracting an industry partner

– Demonstrating, through production, the value of Hurricane’s resource base in order to generate the maximum value for the Company’s shareholders

• Benefits of an industry partner

– Acceleration of full field development of the Lancaster field through further appraisal drilling and provision of an operator for the full field development

– Execution of appraisal drilling to confirm:

Commerciality of Lincoln/Warwick (GWA)

Commerciality of Halifax and therefore the extent of the GLA

Commerciality of Whirlwind


Summary

24

• In 2016/2017 the Company delivered a highly successful drilling campaign

– Lancaster Pilot and sidetrack materially derisked the Lancaster field development, adding significant resources to the Company’s portfolio

– Lincoln and Halifax discoveries further support the Company’s belief in the Rona Ridge basement play

• EPS targeted for first oil in H1 2019

• Hurricane is in discussions regarding elements of the EPS funding and is currently considering the optimal combination of its options. No decision has yet been taken on the structure and timing of funding. The Company will provide a further update on the progress with the EPS and the associated funding as soon as possible.


Resolutions

25


2 CEO Update

3 Resolutions

4 Q&A


Ordinary Resolutions (1)

26

1. To receive the Annual Report and Group Financial Statements of the Company and reports thereon of the directors and auditors for the year ended 31 December 2016.

2. To re-appoint Deloitte LLP as the Company's auditors until the next Annual General Meeting and to authorise the directors to agree their remuneration.

3. To re-elect Alistair Stobie as a director of the Company who retires by rotation pursuant to article 64 of the Company’s articles of association.

4. To re-elect Neil Platt as a director of the Company who retires by rotation pursuant to article 64 of the Company’s articles of association.


Ordinary Resolutions (2)

27

5. That, in accordance with section 551 of the Companies Act 2006 (Companies Act), the directors of the Company be generally and unconditionally authorised to exercise all the powers of the Company to allot shares in the Company (Shares) or grant rights to subscribe for, or to convert any security or other convertible instrument into, Shares (Rights) up to an aggregate nominal amount of £60,149.40. The authority conferred by this Ordinary Resolution 5 shall expire on the earlier of the conclusion of the 2018 Annual General Meeting of the Company and 30 June 2018, but the Company may before expiry make an offer or agreement which would or might require Shares to be allotted or Rights to be granted after the expiry date, and the directors of the Company may allot Shares or grant Rights in pursuance of such an offer or agreement as if the power conferred by this Ordinary Resolution 5 had not expired.

Ordinary Resolution 5 revokes and replaces all unexercised authorities previously granted to the directors to allot Shares or grant Rights but without prejudice to any allot


Special Resolution

28

6. To empower the directors, subject to the passing of Ordinary Resolution 5 and in accordance with section 570 of the Companies Act, to allot equity securities (as defined in section 560 of the Companies Act) for cash pursuant to the general authority conferred by Ordinary Resolution 5, as if section 561(1) of the Companies Act did not apply to any such allotment, provided that this power shall be limited to the allotment of equity securities up to an aggregate nominal amount of £60,149.40.

The relevant authority granted pursuant to this Special Resolution 6 shall, unless renewed, varied or revoked by the Company, expire on the earlier of the conclusion of the 2018 Annual General Meeting of the Company and 30 June 2018, save that the Company may, before such expiry, make an offer or agreement which would or might require equity securities to be allotted after such expiry and the directors may allot equity securities in pursuance of any such offer or agreement notwithstanding that the power conferred by this Special Resolution 6 has expired.


Q&A

29


2 CEO Update

3 Resolutions

4 Q&A

Hurricane/media/Files/H/Hurricane-Energy... · –Repair and life extension (to allow up to 10...

Documents

Transcript of Hurricane/media/Files/H/Hurricane-Energy... · –Repair and life extension (to allow up to 10...