|
Edison Investment Research Limited  London, UK, 30 July 2019 Edison issues outlook on Hurricane Energy (HUR) In June 2019, Hurricane Energy successfully delivered first oil from the Lancaster early production system (EPS) on time and on budget. Initial production performance has been ahead of management expectations providing support for increasing the EPS production plateau from a current base case of 17kbd to c 30kbd from Q420/Q121. Key to achieving this would be access to gas export, together with success at the ongoing Lincoln Crestal well, 205/26b-14, in the Greater Warwick Area (GWA). In this note, we update our short-term oil price deck (continuing to use last published EIA short-term forecasts) and adjust operational metrics to reflect the latest company guidance. In addition, we increase our risking of GWA to reflect the results of the Warwick Deep exploration well and remove the risked value we had included for Halifax. Overall, these leave our valuation broadly unchanged at 102.8p/share (+0.5%).  Key changes include updated EPS operational cost assumptions, a higher Lancaster crude discount, and an increase in our risking assumption for GWA to reflect the non-commercial flow seen at Warwick Deep. We also removed our risked value for a standalone Halifax development. Our short-term Brent forecasts are re-based to the EIA's latest published forecasts (Brent moves from $62.8/bbl to $66.5/bbl in FY19, and from $62.0/bbl to $67.0/bbl in FY20). Our long-term (2022 onwards) Brent assumption remains $70/bbl. The share count also has been updated. Our risked valuation stands at 102.8p/share, or 38.5p/share excluding any value beyond Lancaster EPS.
 to Edison's content to receive reports by email. All reports published by Edison are free-to-access and available on the .  About Edison: Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the . Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities. For more information please contact Edison: Sanjeev Bahl, +44 (0)20 3077 5700 Elaine Reynolds, +44 (0)20 3077 5713 Carlos Gomes, +44 (0)20 3077 5700  Learn more at and connect with Edison on: LinkedIn       Twitter          YouTube     Â
Dissemination of a CORPORATE NEWS, transmitted by EQS Group. |
848875Â Â 30-Jul-2019Â
