£1005.1m market cap
50.5p last close
Hurricane Energy is an E&P focused on fractured basement exploration and development in the West of Shetland region. The company’s 100%-owned Lancaster oil discovery (523mmbbl 2P reserves + 2C resources) commenced production in June 2019.
Investment summary
Hurricane Energy is a UK-based E&P focused on hydrocarbon resources in naturally fractured basement reservoirs. Hurricane’s CPRs ascribe 2P reserves + 2C contingent resources of 2.6bn boe (gross) across all assets. On 4 June 2019, first oil was achieved on the Lancaster Early Production System (EPS); Hurricane anticipates a gradual ramp-up in facilities availability over the next six months. On 18 June 2019, the company sold its first cargo thus generating its first revenues from the Lancaster EPS. Focus will now shift to data gathering to enhance reservoir understanding. Successful confirmation of modelling parameters will aid in the de-risking of full field development. Hurricane’s 2019 three-well drilling programme commenced with the spudding of Warwick Deep on 16 April 2019. This accelerated GWA programme is being made possible by Hurricane’s 2018 farm-out to Spirit Energy. Our valuation stands at 102.3p/share.
Y/E Dec |
Revenue (US$m) |
EBITDA (US$m) |
PBT (US$m) |
EPS (c) |
P/E (x) |
P/CF (x) |
|---|---|---|---|---|---|---|
| 2017A | 0.0 | (14.6) | (7.0) | (0.4) | N/A | N/A |
| 2018A | 0.0 | (12.6) | (18.5) | (2.2) | N/A | N/A |
| 2019E | 109.4 | 24.2 | (21.5) | (2.5) | N/A | 404.5 |
| 2020E | 345.8 | 209.3 | 109.6 | 12.9 | 5.0 | 6.7 |
| Last updated on 16/07/2019 | ||||||
Industry outlook
The Lancaster EPS development is forecast to generate a point-forward IRR of c 40% based on our US$70/bbl long-term Brent commodity price assumption.
Last updated on 16/07/2019
Sector |
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| Oil & gas |
Share price graph
Balance sheet |
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| Forecast net debt (US$m) | 102.9 |
| Forecast gearing ratio (%) | 17 |
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Key management |
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| Dr Robert Trice | CEO |
| Alistair Stobie | CFO |
