Hurricane Energy plugs and abandons Warwick Deep well

Shares in Hurricane Energy slumped on Monday after the company said it had decided to plug and abandon its Warwick Deep well off the west coast of the Shetland Islands.

The oil and gas company, which is focused on hydrocarbon resources in naturally fractured basement reservoirs, said the well did not flow at commercial rates, instead producing a mixture of drilling brine, water, oil and gas.

Hurricane will now move on to the next well in its campaign, Lincoln Crestal, which is the second well of a three-well programme on the Greater Warwick Area.

Hurricane has a 50% interest in the Greater Warwick Area.

Chief executive Robert Trice said: "It is disappointing that the Warwick Deep well did not flow at commercial rates. We were initially encouraged by hydrocarbon shows and gas ratio analysis indicative of light oil, however drill stem testing has clearly demonstrated that Warwick Deep cannot be considered suitable as a future production well and therefore the well will be plugged and abandoned.

"I look forward to commencing operations on the second well in the three-well programme, Lincoln Crestal."

RBC Capital Markets said: "Today's announcement from Hurricane is disappointing, and we expect the share price reaction to reflect this. However, it does not undermine the next two wells scheduled to be drilled by operator Spirit Energy in the Greater Warwick Area (Hurricane 50%), nor does it impact the potential scale and deliverability of the Lancaster EPS (Hurricane 100%)."