Preliminary analysis of the Lancaster pilot well confirms a continuous oil column below the basement structural closure. An increase in mid-case estimates of Lancaster oil in place and a higher recovery factor, supported by aquifer drive, could potentially lead to a material increase in recoverable resource estimates.
We expect third-party validation of resource upgrades on completion of the 2016 well programme. Ahead of validation, we have increased our estimated early production system (EPS) recoverable volumes to the company’s base-case 53mmbbls and assume full field development P50 recoverable volume of 300mmbo.
As a result, our RENAV increases from 41p/share to 73p/share (+78%) based on Edison’s long-term Brent crude price of $70/bbl.
Oil-down-to (ODT) confirmed below structural closure
A key objective of the 205/21a-7 pilot well was to confirm the location of oil water contact (OWC) and refine the Lancaster resource range which stood at 62- 456mmboe. With preliminary analysis indicating a minimum ODT at 1,620m true vertical depth sub-sea (TVDSS), and 240m below structural closure, the pilot well has confirm ed Hurricane’s conceptual res ervoir model which predicts a continuous oil column across the basement reservoir. Hurricane E (LON:HUR) has high confidence in a fieldwide recoverable resource exceeding 200mmbo.
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