There was more good news from Hurricane Energy yesterday although you probably won't have heard if you get your news from the mainstream media. The BBC, for example, chose to ignore or hide the story and instead ran one about the Forties pipeline being shut down for repairs for three weeks.
Here's what Proactive Investors had to say about Hurricane's news;
The new competent persons report assessed all Hurricane’s assets except for its most advanced, the Lancaster field, and it confirmed what many in the market had hoped for - that Hurricane’s successful drill campaign unearthed an awful lot of oil.
New discoveries Halifax and Lincoln have been estimated to host 1.23bn and 604mln barrels of crude respectively, whereas the untested (but substantially de-risked) Warwick prospect is estimated to contain a potential 935mln barrels.
Including Lancaster, which was in May estimated to have 523mln barrels of recoverable resources, the new assessment take the group’s total inventory increasing 231% to 2.6bn barrels oil equivalent.
Source;
Hurricane Energy Plc shares advance as oil inventory rises to 2.6bn barrels
If you read the various CPRs on the Hurricane Energy website, the aggregate estimates of oil in place for their various licenses west of Shetland range from 8.9bn to 26.3bn barrels. The CPR also notes that if the Lincoln and Warwick fields turn out to be a single large accumulation, which looks to be quite likely, these estimates would rise further.
It remains to be seen how much of this oil can be economically extracted but, to put these figures into some kind of context, total recoverable reserves from the whole of Scotland were estimated by the OBR and some of the mainstream media to be 10bn and 3bn barrels respectively just before the independence referendum.
With modern drilling and extraction techniques, it's not unusual for large fields to yield up to 80% of their oil initially in place in the fullness of time so Hurricane Energy is definitely worth keeping a close eye on.
These discoveries won't make a significant difference for Aberdeen in the short term. There will be some traffic when the Early Production System starts to be installed next year but full scale production is unlikely before the mid 2020s. That said, these finds look likely to warrant a lot more drilling in order to better understand the reservoirs. Such drilling could happen relatively soon, especially if Hurricane manages to sell its Tempest and Typhoon licenses to generate some early cash. There are lots of drilling rigs available at attractive rates at present, even though the market is starting to pick up.