HURRICANE Energy chief executive Robert Trice has noted the company has had recent interest from serious industry players in the acreage West of Shetland where it plans to complete a pioneering $500 million (£370m) development.
The company last week sanctioned the hefty investment required to bring the Lancaster oil field into production in what will be the first development of its kind.
Lancaster is reckoned to be the biggest undeveloped field on the United Kingdom Continental Shelf. It lies in a layer of granite beneath the sandstone rock on which other firms have focused.
The field is the only one that has won development approval so far this year in the UK North Sea, where firms have slashed spending amid the downturn since 2014.
Hurricane reiterated yesterday that it expects to start first phase production in 2019.
Comments by Mr Trice may boost hopes the decision to proceed with Lancaster provides the spur for a surge in activity over the longer term off Shetland.
He said Hurricane continues to engage with a number of "financially and operationally capable counterparties" that have shown interest in acquiring stakes in the Lancaster area, without naming any.
Hurricane shelved the hunt for farm-in partners in 2016 pending the completion of appraisal drilling on Lancaster.
In June the company said it had opened the data room to a limited number of firms with the clout to support the full development of Lancaster.
The results of the drilling generated enough interest in the City for Hurricane to be able to raise $530m from investors in July.
The company believes this will give it enough cash to bring the first phase of Lancaster into development.
“To have closed such a large capital raise against a backdrop of historically low oil prices and a challenging equity market was a significant endorsement of Hurricane’s development of fractured basement reservoirs West of Shetland,” said Mr Trice yesterday.
Analysts at Cenkos Securities noted: “Hurricane are in the extremely fortunate position of being fully funded to first oil, and consequently is in a far stronger position to secure a partner for the wider development of the largest undeveloped field on the United Kingdom Continental Shelf.”
Lancaster is the first North Sea development focused on the fractured basement area beneath the seabed.
Mr Trice believes the initial Lancaster development could provide the foundation for a significant portfolio of fractured basement fields.
The company expects to use the information from the first phase development to help plan a much bigger production facility covering the whole Lancaster field, estimated to contain around 500 million barrels.
It could use cash generated from Lancaster to fund work on three other discoveries that are in its portfolio. Cenkos thinks Hurricane has found more than 1.4 billion barrels in recent years.
Hurricane lost $4.2 million before tax in the first half, against $2.6m last time. It had no operating revenue.
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