Hurricane Energy plc, the UK based oil and gas company, is pleased to announce that it has signed a contract with Bluewater (Aoka Mizu) B.V., the owner of the Aoka Mizu FPSO, for an extension to the Bareboat Charter beyond the current expiry date of 4 June 2022.

The key terms of the extension are:

1.    The charter has been extended to cover the remaining economic life of the Lancaster field.

2.    Either party can give six months’ notice to terminate the charter.

3.    The existing day rate and tariff for the vessel remains at $75,000 per day and 8% of revenue respectively.

4.   Hurricane agrees to establish a secured deposit account of up to $18.7 million for the benefit of Bluewater to cover the costs associated with the day rate for the six-month notice period and decommissioning in respect of the vessel.

Financial Update

In addition to the charter extension, the Company has negotiated with BP Oil International, the purchaser of its crude oil, a facility that will allow for cash to be advanced ahead of a lifting. This provides the ability to create more frequent cash receipts and assist with the Company’s working capital. The facility incurs a financing fee that is only payable if the Company uses it.

Antony Maris, Chief Executive Officer of Hurricane, commented:

“Securing the extension to the FPSO contract is an important next step forward. It was key we found a mutually acceptable deal that will enable the Company to continue production beyond repayment of the bond. Based on the current oil price and field performance predictions we forecast this to be at least 18 months from 4 June 2022.

With production continuing in line with our projections, good uptime performance on the FPSO and assuming oil prices are in the range $90-110/bbl, we believe that post clearing our bond debt and after funding the Bluewater secured deposit account, Hurricane will have between $50-80 million of net free cash at the end of July 2022.

This is an important moment for the Company. Against the backdrop of our demonstrable operational track record, financial discipline and the significant rise in oil prices, we are preparing Hurricane for the future.  The UK Government’s renewed emphasis on security of supply is welcome. We are working hard to identify how best to optimise capital allocation in future activities to build further value for our shareholders, whether through further investment in our existing portfolio, or in new opportunities in the UK oil and gas sector, or both.“