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Hurricane Energy

LN: HUR

£1096.8m market cap

55.95p 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) is targeting first oil in H119.

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. With the FPSO now hooked up and securely moored at the Lancaster field, early production system (EPS) first oil remains on track for H119. Hurricane will now focus on topside commissioning prior to start up which will be followed by a ramp-up period to a gross plateau of 20kbd. Once production has stabilised, focus will 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 three-well drilling programme is expected to commence in Q219, at Warwick Deep. This accelerated GWA programme is being made possible by Hurricane’s 2018 farm-out to Spirit Energy. Our updated 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 463.8
2020E 345.8 209.3 109.6 12.9 5.7 7.6
Last updated on 17/05/2019
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 17/05/2019
Sector
Oil & gas
Share price graph
Balance sheet
Forecast net debt (US$m) 102.9
Forecast gearing ratio (%) 17
Price performance
%
1m
3m
12m
Actual 23.4 25.5 16.6
Relative* 25.4 23.2 23.9
52-week high/low 60.0p/39.0p
*% relative to local index
Key management
Dr Robert Trice CEO
Alistair Stobie CFO

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