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Hurricane Energy’s new competent persons report confirms ‘multi-billion’ barrel discoveries

Last updated: 13:55 11 Dec 2017 GMT, First published: 07:32 11 Dec 2017 GMT

Drill team, Hurricane Energy offshore drilling in North Sea
Exploration drilling has delivered some very significant new oil estimates

Hurricane Energy Plc (LON:HUR) saw its shares jump 12% higher today after it unveiled a new competent persons report for the ‘Rona Ridge’ assets, excluding the Lancaster oil field.

The new assessment estimates some 2.6bn barrels of oil resources. The report follows the year’s earlier exploration drilling successes.

In early afternoon trading, Hurricane shares were 2.25p higher at 30.25p.

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It sees some 1.235bn barrels of contingent crude resources in the Halifax discovery, and some 604mln barrels in the Lincoln discovery. The Warwick prospect, which has yet to be tested with drilling, is designated 935mln barrels of prospective resources, and the consultant sees a 77% chance of it being a successful discovery.

The oil-in-place estimates a range of 3.9bn to 13.1bn barrels for Halifax and Lincoln, and 2.27bn to 6.97bn for Warwick.

Further contingent resources were stated for the Whirlwind and Strathmore assets, which are separate from those discovered in recent drilling.

The Lancaster field was assessed earlier this year, some 523mln barrels of reserves and contingent resources were estimated, with particular attention paid to the area that will host the early production system (EPS).

Production is expected to start in 2019, with the EPS due to yield up to 17,000 bopd from two wells.

It is expected that the validation provided by the EPS can help narrow and upgrade the estimates for all the Rona Ridge assets, as drill results showed Halifax and Lincoln are both similar to Lancaster.

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"We are pleased to now have independent validation of our geological model for the Rona Ridge basement play,” said Dr Robert Trice, Hurricane chief executive.

“The Lancaster EPS will go a long way, together with other appraisal work, to narrowing reservoir resource ranges on our assets on the Rona Ridge, following target first production in H1 2019.

“In addition to providing significant cash flow, the company believes that a successful EPS will provide a read-across to the production potential of all our basement assets, materially de-risking Lancaster and the surrounding fields at Lincoln, Halifax, Warwick and Whirlwind."

Hurricane also told investors that whilst its data room process has been positive it expects a farm-out transaction, needed for a full development, is not likely before the de-risking Lancaster EPS has been delivered.

 -- Adds share price --

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