HUR announced that Spirit Energy has farmed-in to 50% of HUR’s Lincoln and Warwick licences (together covering the Greater Warwick Area, or GWA). This will open up significant new work programme, widen strategic options and accelerate both companies’ potential monetisation.
According to the plan, both companies are targeting first oil on the GWA by 2020 and final investment decision regarding first phase of a full field development by 2021, intended to unlock initial reserves of half a billion barrels (gross) from the current GWA resources. The transaction has a commitment by Spirit Energy of up to $387m in carry. Spirit Energy will also make a contingent contribution of $150-250m, depending on the reserves included in the FID for the full field development.
Dr Robert Trice, HUR’s CEO, commented, “This transaction allows us to accelerate monetisation of our GWA resource base through a work programme designed to target significant reserve growth. As we approach first oil on Lancaster, which remains on track for 1H 2019, we have increased financial flexibility and two parallel work programmes to drive our Rona Ridge resources towards monetisation.”
Spirit Energy’s farm-in to GWA is in three phases. First, starting in 2019 Hurricane
is to be carried through its share of a $180.6m gross, three-well programme
accelerating the exploration of Warwick and appraisal of Lincoln and preparation
works for the tie-in of one or more producers to the Aoka Mizu.
A rig has already been contracted, providing visibility on 2019 drilling catalysts. Contingent on phase one success, in 2020 Hurricane will be 50% carried for its share of an estimated $187.5m gross programme to tie-back one GWA well to the Aoka Mizu, including tie-in to the WOSP gas export system: a key requirement for enhancing Aoka Mizu throughput to 40kbod. Finally, there will be a further carry contribution by Spirit Energy of $150–250m for Hurricane’s share of GWA FFD costs.