Hurricane Energy has set aside £16.8 million to help ensure it can cover decommissioning costs for its Lancaster field after cancelling a bond agreement.
The company was required to provide security for its decommissioning liability on Lancaster, located west of Shetland, as part of the field development plan approval process.
Since February 2019, the London-listed firm has met its obligation through a decommissioning bond.
But the bond provider asked for Hurricane to provide cash collateral for 100% of the bond’s value following the recent downward revision of reserves at Lancaster and the fall in oil prices earlier this year.
Hurricane said it would not get any benefit from the bond and has terminated the agreement.
It will now hold £16.8m in trust to continue to meet the obligation.