It is rare for companies at Hurricane Energy’s (HUR) stage of life to neatly sync up with the required reporting schedule. Discoveries are made, cash gets burned, and sometimes projects are funded. Half-year financials for the North Sea explorer, published this week, provided little interest aside from the fact they are now outlined in dollars, and period-end net cash stood at $29.1m (£21.4m).
Events have moved on. In July, the company successfully raised $547m to finance the construction of an early production system for the Lancaster field. Progress since then has been steady, with long lead items ordered, contractors signed up and the floating vessel leased and on the way to Dubai for upgrades. Once those are completed, and the Aoka Mizu floating production storage and offloading vessel (FPSO) reaches the North Sea field, first oil is expected before the summer of 2019. Before then, FinnCap expects a loss per share of 0.3p in both 2017 and 2018.
These results essentially provided colour, from which investors will have to draw two further conclusions. The first: whether the “key production and reservoir data” needed from the early production system to fully develop the field presents a risk worth taking. The second, though related point: whether the lack of detail on Hurricane’s discussions with potential farm-in partners – despite an open door to the data room and financial and operational clout on the other side of the table – signals doubt over Lancaster’s geological complexity, potential costs, or just plain hard bargaining.
| HURRICANE ENERGY (HUR) | ||||
| ORD PRICE: | 27.8p | MARKET VALUE: | £544m | |
| TOUCH: | 27.5-27.8p | 12-MONTH HIGH: | 68p | LOW: 26p |
| DIVIDEND YIELD: | NIL | PE RATIO: | N/A | |
| NET ASSET VALUE: | 20.1¢ | NET CASH: | $29.1m | |
| Half-year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
| 2016 | nil | -2.57 | -0.35 | nil |
| 2017 | nil | -4.23 | -0.35 | nil |
| % change | - | - | - | - |
| Ex-div: | n/a | |||
| Payment: | n/a | |||
| £1=$1.36 | ||||
