Hurricane Energy Plc (LON:HUR) shares traded lower in Wednesday’s early deals after a project update revealed an increase in water production through the Lancaster early production system.
A quarterly production update detailed an increase in the water cut to 17% from 10%, with some 6,000 barrels of water per day flowing in the period (predominantly from the 205/21a-7Z well).
It occurred as overall production volumes were increased to 20,000 bopd – 2,000 bopd from the 205/21a-6 well and 8,000 bopd from 205/21a-7Z.
The company noted that at 17% the level of water production was “well within” capacity for the water handling facilities on the Aoka Mizu floating production, storage and offloading vessel.
Chief executive Dr Robert Trice said he had “sufficient confidence” to maintain Hurricane’s guidance at 18,000 bopd (assuming 10% of downtime).
“Whilst water production rates have materially increased since start-up of the Lancaster EPS, Hurricane’s interpretation of water behaviour data has continued to support the Company’s perched water model,” he said in the statement.
Trice added: “We are very pleased with the performance of the Lancaster EPS in Q1 2020.
“As at the end of March, the EPS has safely produced approximately 4.4mln barrels of oil since starting up last year.
“Despite the significant scale of these produced oil volumes, the Lancaster EPS is still very much in a data gathering phase, as we continue to better our understanding of this unique basement reservoir.
“Further testing at the current rates will be required before any trends can be confirmed and conclusions made about the long-term behaviour of the reservoir.”
In Wednesday morning’s deals Hurricane shares were down 1.25p or 9.1% changing hands at 12.42p.
Published at Wed, 15 Apr 2020 08:17:00 +0000-Hurricane Energy shares drop as Lancaster field sees higher water volumes