Hurricane suspends output guidance after Lancaster well shut-in

Hurricane Energy has shut-in one of two wells at the Lancaster Early Production System (EPS), located in the West of Shetland area, due to interference between two producing wells. As a result, Hurricane has suspended its full-year production guidance.

The Hurricane-operated Lancaster field is now in its first phase of development, the EPS, consisting of two wells tied back to the Aoka Mizu FPSO vessel. The first oil was achieved in June 2019.

Hurricane has been carrying out ongoing testing of the two Lancaster EPS wells in order to determine the sustainability of combined production rates up to gross 20,000 bopd.

In an update on Friday, Hurricane said that achieving this target rate at a sustainable level has not been possible as the impact of increasing production rates resulted in instability in the flow regime on the 205/21a-7Z well as a result of interference between the wells.

This has led to a decision to shut-in the 205/21a-7Z well for the time being and return to a period of testing maximum sustainable rates from just the 205/21a-6 well.

The water production from the 205/21a-7Z well at the time the instability was experienced was in line with the water production that had been seen over the previous weeks.

The Lancaster EPS is currently producing from the 205/21a-6 well at a rate of approximately 10,300 bopd.

The company plans to increase this rate incrementally, to determine its maximum sustainable level.

This process will result in a period of production substantially below forward guidance of net 18,000 bopd and Hurricane is, therefore, suspending previous full-year guidance of net 17,000 bopd.

Production has averaged 15,500 bopd year to date.

Dr Robert Trice, Chief Executive of Hurricane, commented: “The results of the recent testing of the Lancaster EPS wells at elevated combined production rates are disappointing and the degree of interference encountered is unexpected.

“Whilst the wells show high productivity individually, their proximity and associated interference behaviour require further data acquisition before the company can be confident about optimum long-term well rates. This latest development reinforces that.

“This data acquisition process continues, and further updates will be provided once we have determined our target plateau production rate with the existing well configuration”.