Hurricane has announced an update on the strong ongoing performance of the Lancaster early production system (EPS), with recent individual well tests supporting guidance of 20,000bod for FY20 (before operational downtime). It has also been granted a five-year extension to its P1368 licence, covering Lancaster and Lincoln, resulting in changes to its 2020 work programme. One or more sub-vertical wells will be drilled on both Lincoln (in 2020) and Lancaster (in 2021) to determine the maximum vertical extent of the reservoir, while the Greater Warwick Area horizontal wells will no longer be drilled next year. Hurricane estimates FY19 oil production of 3.1mmbbl, representing an average of 13,300bod, generating revenue of c $165m and year-end unrestricted cash of c $150m. We plan to update our numbers shortly to reflect FY19/20 guidance.
Warwick West is the last well of a three-well drilling campaign in the GWA, following the Lincoln Crestal well discovery. The well flowed for a total of 85 hours in different flowing periods, using an electric submersible pump (ESP) and under natural flow, while work continued to clean the well and evaluate the reservoir performance. A final flow period was conducted under controlled natural flow conditions achieving a stable rate of 1,300bod, lower than the natural flow rates found in Lancaster at 5,300bod and 6,520bod. A stable rate using an ESP could not be reliably measured. The well produced 43° API light oil, with less than 0.5% water. The oil API gravity is similar to Lincoln oil samples. The joint venture will now evaluate the results and further technical analysis will help determine the potential for the GWA to be a single accumulation, its volumetrics and longer-term developments, on which we will update our full GWA valuation.
Hurricane also announced it is making progress in better understanding the Lancaster reservoir, with average production for the rest of the year expected to be in line with guidance at c 11,000bod. The company expects to provide a further update later in December.