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Research: Energy & Resources
The Aoku Mizu FPSO is now on station and hooked up at Lancaster; we believe this keeps the EPS on schedule for first oil in H119. Hurricane will now focus on topside commissioning prior to start-up, which will be followed by a ramp-up period to a gross targeted plateau production rate of 20kbd (17kbod net of operating efficiency). In addition to progressing Lancaster, the company has a full programme of activity in its neighbouring Greater Warwick Area (GWA), with the three-well E&A programme in the GWA expected to kick off in early Q219 at Warwick Deep. Our risked valuation stands at 102.8p/share (see our last note).
Written by
Hurricane Energy |
Aoka Mizu hook-up at Lancaster |
Operational update |
Oil & gas |
19 March 2019 |
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Hurricane Energy is a research client of Edison Investment Research Limited |
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The Aoku Mizu FPSO is now on station and hooked up at Lancaster; we believe this keeps the EPS on schedule for first oil in H119. Hurricane will now focus on topside commissioning prior to start-up, which will be followed by a ramp-up period to a gross targeted plateau production rate of 20kbd (17kbod net of operating efficiency). In addition to progressing Lancaster, the company has a full programme of activity in its neighbouring Greater Warwick Area (GWA), with the three-well E&A programme in the GWA expected to kick off in early Q219 at Warwick Deep. Our risked valuation stands at 102.8p/share (see our last note).
Year-end |
Revenue |
EBITDA |
Operating |
Capex* |
Net cash/ |
12/16 |
0.0 |
(8.8) |
(5.6) |
(63.5) |
98.1 |
12/17 |
0.0 |
(14.6) |
(8.1) |
(265.7) |
133.5 |
12/18e |
0.0 |
(4.7) |
(10.1) |
(229.6) |
(114.9) |
12/19e |
128.4 |
43.2 |
28.6 |
(96.5)* |
(182.8) |
Note: *Capex is net of carried investment by Spirit Energy and includes 5% cost contingency for EPS.
Lancaster EPS remains on schedule
With the Aoka Mizu FPSO now successfully hooked up to the buoy, focus this year will shift to commissioning, production performance and data gathering. Management is guiding that it will take more than six months from first oil to achieve the targeted production rate of 17kbod from the two production wells (net of operating efficiency). Whilst the two Lancaster EPS wells are expected to have combined gross output of c 20kbod from first oil, management guide at a lower operational efficiency (45% to 65%) during the first six months of production. A minimum six- to 12-month period of data gathering will be required to begin evaluating the long-term producibility of the reservoir. Our risked valuation stands at 102.8p/share. We will be providing a more detailed update covering EPS commissioning and upcoming drilling in due course.
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Disclaimer
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Disclaimer
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Research: Healthcare
Laboratorios Farmacéuticos ROVI (ROVI) has announced top-line data from the pivotal Phase III PRISMA-3 trial evaluating DORIA (ISM risperidone) in schizophrenia. DORIA achieved the primary endpoint of a statistically significant reduction (p<0.0001) in PANSS score at week 12 (both 75mg and 100mg doses once-monthly intra-muscular injection). These data not only validate DORIA but also the ISM technology platform developed by ROVI. ROVI plans to file the US NDA in H219. We forecast a potential launch in 2021 in both the US and EU and peak sales opportunities of US$411m (US and EU) in 2027. DORIA has the potential to be highly value enhancing to ROVI’s long-term profit growth. This is in line with our expectations and we leave our forecasts and valuation unchanged at €1.23bn or €21.9 per share.