The Aim-quoted oil exploration and production company said ahead of unveiling its 2021 results that revenue for the year amounted to $239 million (£175m), up from $180m in 2020, with an average realised oil price of $67 a barrel, an increase from $35 in 2020.
Production for the final three months of 2021 averaged 10,000 barrels of oil per day, “within guidance,” while looking at the year as a whole, it amounted to 3.7 million barrels.
Its year-end total debt totalled $78.5m following the repurchase of $151.5m of outstanding convertible bonds for cancellation during the second half of last year.
Regarding the Lancaster field, which it owns and operates, Hurricane stated that the well gauge pressure last month reached and dropped below “bubble point” – the pressure at which gas begins to come out of solution from oil within the reservoir – in line with the previously guided timing, and no resulting production issues have been observed to date. It said last year that reaching that point could lead to production “being reduced or ceased altogether”.
The next cargo of Lancaster crude is anticipated to be lifted towards the end of this month, Hurricane added.
Chief executive Antony Maris said: "Despite the major challenges faced by Hurricane last year, the team has done a superb job at delivering excellent production performance... as well as finding cost savings.
“Oil prices, while volatile, have been stronger in the second half of the year and, combined with the impact of the bond buybacks, production performance and cost-reduction measures, we are optimistic that the ability to repay the bonds in full at maturity is now within reach.
“Given our current prediction of performance and assuming oil prices continue to be within the range experienced over the past month, we believe that post-clearing our bond debt, Hurricane will have between $8-38 million of net free cash at the end of July 2022.
"This needs to cover any subsequent working capital requirements until revenue is received from the next lifting… going forward we are working hard towards ensuring a confident future for Hurricane based upon a sustainable financial platform.”
SP Angel said: “There will be some concern that the water-cut at Lancaster continues to grow; however, with production still slightly ahead of expectations, the company will no doubt pursue any technical means available to contain this issue.”
Shares in Hurricane closed up 11.14 per cent at 4.54p. Headquartered in Surrey and with a base in Aberdeen, the firm was founded in 2004 "in the belief that UK fractured basement reservoirs represent a significant untapped resource,” but it has more recently faced questions over its viability.
The appointment of Mr Maris was announced in 2020. Prior to joining Hurricane he was chief operating officer at Pharos Energy where he was responsible for the development of oilfields off the coast of Vietnam and onshore assets in Yemen.