Hurricane Energy shares dive after Warwick well test
Shares of Hurricane Energy tumbled on Monday after the oil explorer said that further analysis was required following test work at a new well on the Greater Warwick Area (GWA) site in the North Sea.
Testing saw the Warwick West well, which was was drilled to a total depth of 1,879 metres, flow for 85 hours in a number of flowing periods at variable rates, using both an electric submersible pump and under natural flow, while work continued to clean the well and evaluate reservoir performance.
However, while controlled natural flow conditions achieved a stable rate of 1,300 barrels of oil per day, a stable rate could not be reliably measured while using a pump as the well was still in the process of cleaning up.
Hurricane is currently working to evaluate the results of the three wells drilled this year at GWA with its 50/50 joint venture partner, Spirit Energy.
In accordance with regulatory requirements, the oil and gas company's semi-submersible rig will now plug and abandon the Warwick West well before demobilising.
Meanwhile, the AIM traded company said average fourth quarter production at its Lancaster EPS operation is expected to continue to be in-line with guidance of approximately 11,000 bopd.
Chief executive Robert Trice said: "We are pleased to have made another discovery with the Warwick West well. The flow test results confirm the presence of light, mobile oil.
"The impact that this well will have on how the company views the GWA accumulation and its associated volumetrics will require further technical analysis. The GWA joint venture is now assessing the optimal appraisal strategy for the GWA, and Hurricane will provide an update in due course."
Analysts from Berenberg said: "The flow-rates result from Hurricane Energy’s Warwick West well is too low to be commercial, in our view. The company will have to drill more wells and conduct further analysis to determine potential commerciality."
Hurricane Energy shares were down 17.24% at 38.40p at 1228 GMT.