UK-based oil and gas company Hurricane Energy (LSE:HUR,OTC Pink:HRCXF) has produced its initial barrels of oil from a fractured basement field, the first of its kind in the UK.
The Lancaster field is the country’s first basement reservoir to go into production on the continental shelf — regions of water surrounding the UK in which the country has mineral rights.
While fractured basement fields are not uncommon around the world, the Lancaster project is a first for this jurisdiction.
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For those unfamiliar with the term, fractured basement reservoirs are deposits of igneous or metamorphic rocks, with naturally formed fractures. Within the fractures lies trapped hydrocarbons, and extracting them creates oil.
Unlike hydraulic fracturing, there is no need to frack basement reservoirs, as they are already fractured.
The initial output at Lancaster was part of a 72 hour production test that aimed to reach and maintain production levels of 20,000 barrels of oil per day.
“Lancaster is the UK’s first producing fractured basement field and the fact that Hurricane has delivered this industry milestone on time and within budget is an incredible achievement,” Robert Trice, CEO of Hurricane, said in a press release.
From here, Hurricane has planned a strategic ramp up for Lancaster over the next six months with a long-term goal of reaching 85 percent operating efficiency.
“We have successfully achieved our start-up data acquisition objectives and commenced the evaluation of this material,” added Trice. “Up to 12 months of stable production will be required in order to provide a clear view of the reservoir and enable us to plan for associated full field development scenarios.”
The discovery of hydrocarbons beneath the UK continental shelf was first recorded in the 1970s; however, abundant oil reserves on land prevented further exploration. Now that traditional oil operations are becoming more precarious, more companies like Hurricane may start taking an unorthodox approach to oil and gas extraction.
Shares of Hurricane were down 6.36 percent on Wednesday (June 5), trading at GBX 56.15.
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
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Source: Investing News Network
(June 5, 2019 - 5:50 PM EDT)
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