Edison Investment Research Limited
Edison Issues Outlook on Hurricane Energy (HUR)
Wednesday, May 20, 2020 4:35 AM
LONDON, UK / ACCESSWIRE / May 20, 2020 / In April 2020, Hurricane Energy (LSE:HUR) provided an update on Lancaster early production system (EPS) data gathered since first oil. The company announced that productivity from the two producing wells is over 10.0kbod per well. Aggregate water has been higher than initial expectations; however, this has been identified as being perched water and is expected to stabilise with time. Management expects that a longer period of data gathering will be required before the next stages of development. Given the need for additional data and the current commodity price environment, Hurricane is reviewing its capital allocation for 2020-21. Although the capital markets day did not confirm the next steps required to be able to confirm the upside case for the company's asset base, Hurricane's balance sheet is strong and the EPS keeps on delivering. Our mid-case risked valuation has slightly decreased to 70.4p/share from 73.0p/share ( 4%) as we adjust our short-term oil price assumptions and our core NAV stands at 21.9p/share, a premium of 99% to the current share price.
Our risked valuation stands at 70.4p/share, or 21.9p/share excluding any value beyond Lancaster EPS. We have updated our short-term Brent price expectations based on EIA forecasts, while our long-term (2022 onwards) Brent assumptions remain in line with our last note. Hurricane is currently trading at a 50% discount to our core NAV, which only takes Lancaster EPS into consideration and no upside.
Click here to view the full report.
Subscribe to Edison's content to receive reports by email.
All reports published by Edison are free-to-access and available on the website.
About Edison: Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.
Edison is authorised and regulated by the Financial Conduct Authority.
Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities.
For more information please contact Edison:
Carlos Gomes, +44 (0)20 3077 5700
Elaine Reynolds, +44 (0)20 3077 5713
Learn more at www.edisongroup.com and connect with Edison on:
SOURCE: Edison Investment Research Limited