Kerogen Capital is pleased to announce a £44 million (approximately US$63 million) subscription for new ordinary shares in Hurricane Energy plc (“Hurricane” or the “Company”), following which Kerogen will become Hurricane’s largest shareholder with a 29.9% shareholding. Certain existing shareholders, including Hurricane’s current largest shareholder, will also participate in the equity subscription, which together with Kerogen’s investment will provide gross proceeds of £52 million (approximately US$74 million) to the Company. Completion of the investment remains subject to approval by Hurricane’s shareholders at a general meeting scheduled on 9 May 2016.
Hurricane is a UK-based oil and gas company with a specialist focus on naturally fractured basement reservoirs. Its management team is led by CEO Dr. Robert Trice who is an acknowledged leading expert in fractured basement geology. To date Hurricane has made two significant discoveries each with independently certified resources of around 200 million barrels of oil equivalent (“mmboe”). During the same period in which these discoveries were made, the average discovery size on the UK Continental Shelf (“UKCS”) was 20-23 mmboe.
Kerogen’s capital injection will fund the drilling of two wells in 2016 at the Lancaster oil field, Hurricane’s 100% owned and operated anchor project. This 2016 well programme comprises an appraisal well and a producer well, which together with the successful well drilled and tested in 2014, completes the well stock required for the Early Production System (“EPS”) phase of the Lancaster development. This funding enables Hurricane to secure the attractive oilfield service contract rates that are available in today’s market and is intended to accelerate the time to first oil, targeted for 1H 2019.
On completion of the investment, Kerogen will have representation on Hurricane’s board and on a newly formed joint technical committee.
Kerogen’s Co-Founder and Managing Partner, Jason Cheng, commented:
“Hurricane represents an outstanding opportunity for Kerogen to participate in the exciting fractured basement play by gaining exposure to the future development of the Lancaster oil field and prospective adjacent areas. We look forward to partnering with the Hurricane team in the critical next stage of the Company’s development.”
“With our investment in Zennor Petroleum, we are now involved in funding five appraisal and development wells in the North Sea in 2016, underlining our continued commitment to high quality opportunities in today’s oil price environment.”
Hurricane’s CEO, Dr. Robert Trice, commented:
“This is a very important transaction for Hurricane and enables us to progress work at our Lancaster field through the drilling of two technically significant wells which complete the well stock needed for the Phase 1 EPS development. We are delighted to welcome such a knowledgeable and supportive investor as Kerogen who understand and endorse our strategy to progress the development of Lancaster and our other assets. We look forward to working with them and our other key shareholders as we take the business forward.”