The Lancaster field’s production dropped further as a well pump failed, within hours of the troubled firm ceding to an EGM called by activist Crystal Amber Fund.
Hurricane Energy PLC (LON:HUR) said its production well is hampered by a fault in an electric submersible pump (ESP).
The well pump failed on June 8 causing production to be shut-in temporarily, before coming back online at a reduced rate under natural flow.
Hurricane said the fault is being investigated and the ESP’s electrical system is being tested ahead of an attempt to restart the pump.
In London, Hurricane’s already downtrodden shares were down around 2% to 1.18p which values the company at just £22mln.
Prior to the fault, the company said the Lancaster field was producing at a rate of 11,020 barrels of oil per day with an average water cut of 30%. The company also noted that a 512 barrel crude shipment was lifted from Lancaster in early May, the 22nd cargo from the field to date.
The latest problem at Lancaster comes amidst a particularly turbulent moment for Hurricane.
Last week it was announced that the company would not be renewing the lease for the Aoka Mizu floating production vessel beyond 2022, declining an existing three-year option in its contract for the vessel.
Hurricane said it was not in the company’s best interests to exercise the option in its current form due to the significant financial obligations it would entail.
The Lancaster field has for some time been performing below the company’s original expectations, and, following management changes in 2020 the board has been working on a financial restructuring which aims to hand over a substantial allotment of equity to bondholders, to stave off debt pressures.
In May, Hurricane announced a deal with a 69% majority of the group’s convertible bondholders which proposed a US$50mln shares-for-debt exchange, to reduce its US$230mln debt-pile.
The refinancing would see existing shareholders diluted significantly, with bondholders receiving new shares equating to 95% of the company whilst retaining the remaining US$180mln bonds under extended maturity out to December 2024.
Shortly after, activist investor Crystal Amber Fund called for an extraordinary general meeting to oust five non-executive directors and put its own two appointees in place.
The fund, which owns 14.7% of the company, said it provided funds totalling £25mln in three tranches since 2013 but had since lost faith in the board.
Hurricane yesterday confirmed it would hold the requisitioned EGM on July 5, at 11:00am BST.
Due to Coronavirus (COVID-19)-rules, it will be a ‘hybrid’ meeting, using video webcast and audio conferencing.