Proactive Oil & Gas weekly highlights: Hurricane Energy, Cairn, Touchstone, Falcon, Bahamas Petroleum ....
- Mar 29, 2020
- Oil Capital
Hurricane Energy PLC (LON:HUR) announced on Friday that its Lancaster oil field has been struck by the coronavirus (COVID-19) with a crew member on the Aoka Mizu floating production vessel testing positive for the virus.
In a statement, the company said that the crew member was evacuated from the vessel located in the West of Shetland region, offshore Scotland, to the mainland for medical reasons and subsequently tested positive.
Hurricane noted that production operations have not been affected. It added: “Hurricane is supporting Bluewater Lancaster Production (UK) Ltd, installation operator of the Aoka Mizu FPSO, with its response. “Bluewater is working within the guidelines provided by NHS Scotland, Health Protection Scotland, and Oil and Gas UK in determining the next steps.”
Also on Friday, Cairn Energy PLC (LON:CNE) said it is sticking to its guidance for 2020, but told investors it is proactively reviewing each of its assets and evaluating initiatives to reduce capital spending.
The London-listed oiler, in a statement, said significant capex reductions and deferrals have already been identified for the 2020 programme, representing around 23% of previously envisaged spending for the year.
Capex is now anticipated below US$45mln in 2020 for Cairn’s producing assets as a result of saving and deferrals at the Catcher field. Net development capex at the Sangomar joint venture project is now expected to be below US$330mln for the year, down from US$400mln.
Trinidad-focused Touchstone Exploration Inc (LON:TXP), on Thursday, said it will press ahead with the drilling of the Chinook prospect unless it becomes “absolutely necessary” to suspend operations due to the coronavirus (Covid-19).
Operationally, the company’s focus is on delivering the Coho and Cascadura discovery wells – which will significantly boost production volumes – and drill Chinook which follows on as the third well on the Ortoire block.
There was a different approach for Falcon Oil & Gas Ltd (LON:FOG) and its Beetaloo shale venture where the operator has decided to respond to coronavirus uncertainty by suspending work before fracking starts.
Similarly, Bahamas Petroleum Company PLC (LON:BPC) rescheduled its planned Perseverance-1 well to October 2020, from the previously anticipated timeline that saw the well spud in May/June.
The company said the decision came as a result of the unprecedented impact of the coronavirus (Covid-19) pandemic.
“Given the ever-evolving adverse impact of the response to the spread of the Covid-19 virus - which is changing daily and is affecting everyone and all enterprises, around the globe - it has become clear to us that if we continue to push forward with drilling in the first half of 2020, safe and responsible operations would be compromised,” Simon Potter, Bahamas' chief executive said in a statement.
With deal news, Block Energy PLC (LON:BOE) revealed the acquisition of new acreage in Georgia, picking up two areas held by Schlumberger for no upfront cash consideration.
Schlumberger will instead be given options over Block Energy stock - 120mln shares, or 23.3% of the company, ascribing a base deal value of around US$6mln. The firm is acquiring Block XI which is described as “Georgia's most productive block” - over 180mln barrels of oil have been produced historically, with a peak of 67,000 barrels of oil per day (bopd) in the mid-1980s – and, it adds 64mln barrels (boe) of 2P oil reserves to the group.
Diversified Gas & Oil PLC (LON:DGOC) told investors that it has extended its asset retirement agreement with the state of Ohio. The original arrangement had a five-year term and it has extended the deal for another five years, setting a new expiry date of 31 December 2029.
In a statement, the company noted that the terms remain substantially unchanged though commitments increase so that the company is now required to plug 20 wells per year - up from 18 wells per year - over the full duration of the agreement.
It will also post a surety bond of US$0.65mln for the life of the agreement where the company owns around 7,100 wells. The company noted that in 2019 it was in full compliance with the original terms before the new arrangement was agreed.
Anglo African Oil & Gas PLC (LON:AAOG) announced new terms for the divestment of its Congo assets to Zenith Energy Ltd (LON:ZEN). The top-line deal value reduces to £800,000 from £1mln, but, the consideration will now be paid entirely in cash, whereas the original deal saw AAOG received £500,000 cash and £500,000 of Zenith shares. The group said the cash will be paid to AAOG in ten equal instalments.
Originally, the Zenith transaction was accompanied by certain other measures including a loan from Zenith and a put-and-call option agreement.
Tlou Energy Ltd (LON:TLOU) said it has decided to significantly reduce costs in response to the difficult prevailing market conditions. The aim, the company said in a statement, is to make current funds last longer so that more time is available to conclude ongoing commercial and project finance negotiations.
Argentina-based group Echo Energy PLC (LON:ECHO) revealed it is seeking to defer cash interest payments on its debts through the remainder of 2020, as it continues to respond to challenging market conditions as the coronavirus pandemic grips the world
“Echo is proactively managing its assets and cost base with a clear strategy in place to reduce costs and conserve existing cash,” Martin Hull, Echo chief executive said in a statement. “If fully implemented, these actions would lead to a sustainable and cash positive business in the current environment and position the company well for the future," he added.
Industry contractor ADES International Holding PLC (LON:ADES) told investors that the coronavirus pandemic has not significantly impacted the group's operations to date, albeit that in line with the FCA directive the company will delay the release of its financial results.
The rig contractor said its assets are operating as usual, and, trading remains in line with management expectations.
“ADES has established a robust business continuity programme with contingency plans in place should the operations be affected, while following stringent health and safety protocols to mitigate risks posed by the pandemic,” the company said in a statement. “ADES' first priority remains the health and safety of its employees and all stakeholders.”