Independent oil and gas explorer Hurricane Energy has announced that its Lancaster well West of Shetland could flow twice as much oil as previously expected.
Appraisal work on the one kilometre horizontal well in the remote West of Shetland area – tipped to contain around a fifth of Britain’s remaining oil – showed it could flow 20,000 barrels of oil per day (bpd), more than the 9,800 barrels the company had initially expected.
Hurricane is targeting more than 200million barrels of oil from the Lancaster basement and shares in the firm, which listed on London’s Alternative Investment Market (AIM) in February, shot up in response to the news.
Hurricane specialises in drilling for oil in basement reservoirs that lie beneath the sandstones typically targeted by oil and gas explorers.
The firm’s chief executive, Dr Robert Trice, said their test drilling has given them a better understanding of how the well will behave.
“I am delighted to report that our work on the well data gathered during the recent testing of Lancaster confirms our pre-drill geological model of the fractured basement, as well as significantly advancing our understanding of how the fracture network behaves,” he said.
“Importantly, the key metrics related to oil productivity are even better than expected providing us with further encouragement regarding the productive potential of Lancaster and our other basement assets.
“Such a level of productivity means that an early phase of field development and commercial production could be initiated with the addition of only one more horizontal well.”
The company currently owns all of its West of Shetland assets but said it was looking for partners to share the cost of developing its fields.
Dr Trice added: “As previously reported, we have a data room open for potential farm-inees, however the benefit of having two suspended proven producers and holding 100% of our acreage means that we have a broad range of options to progress the Lancaster Field development and our other assets.”
Stock market analysts said the announcement would “excite” potential partners.
“This excellent detailed well result will both excite and encourage potential industry partners who have been keenly waiting for this result,” said Ashley Kelty, analyst at Cenkos Securities, who rates the stock a “buy”.
Recommended for you
