Hurricane Energy (LON: HUR) has finally called it a day on a West of Shetland prospect, once thought to hold 1.2 billion barrels of oil.
A decision was taken this month to formally hand back the licence for Halifax, P2308, due to the “low likelihood of a successful economic development”.
It follows Hurricane’s verdict earlier this year, alongside partner Spirit Energy, to give up on the Greater Warwick Area (GWA).
The London-listed company said there is “no reasonable expectation that” Halifax could generate “any near-term cash realisation”.
As a result it is voluntarily relinquishing the licence to allow the company to focus its time and financial resources on alternative and more attractive opportunities.
All previously capitalised costs relating to Halifax have already been impaired and therefore no further impairments are required, Hurricane confirmed.
A reserves report, published in 2021, dramatically downgraded reserves for the operator, sending its share price through the floor.
From the once lofty heights of up to 1.2bn barrels of resources, Halifax was deemed to have no contingent resources being attributed to it.
It was expected at the time that the prospect, located near to its flagship Lancaster field, would be written off.
Greater Warwick Area
The decisions not to press ahead with the GWA or Halifax licences follows “rigorous screening criteria”, Hurricane said.
In April, the GWA Joint Venture announced that it had reassessed its understanding of the area.
Following appraisal and development costs, it was determined the GWA was “not feasible”, with Hurricane taking a $4.1m impairment as a result.
Hurricane and Spirit first signed a deal to enter the Greater Warwick Area (GWA) together in 2018, with Spirit farming into 50%.
In July 2019, the highly anticipated Warwick Deep well did not encounter commercial rates of oil and gas.
Five months later, Hurricane announced the discovery of “light, mobile oil” at its Warwick West well, but shares sank as questions cropped up about its commerciality.
Plans to give up on Halifax were confirmed in the company’s 2022 half year results, published on Friday.
They painted a far brighter picture for the North Sea firm, the future of which has looked more than a bit uncertain in recent years.
But Hurricane revealed it will not be forging ahead with plans to drill another well at Lancaster after it failed to secure flaring assurances.
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