(Sharecast News) - Oil and gas company Hurricane Energy said on Wednesday that it had determined further appraisal and development work to reach an economic development in the Greater Warwick Area within its remaining licence term was no longer feasible.
Hurricane Energy said on Wednesday that following discussions with its joint venture partner, Spirit Energy, the pair had decided to relinquish the P2294 licence area.
The AIM-listed group, which previously announced its decision to relinquish the Lincoln P1368(S) licence sub-area, noted the carrying value of the P2294 asset in its accounts of roughly $4.1m will be impaired but will be an accounting charge only and not have any cash impact.
Chief executive Antony Maris said: "We have made this decision deploying the rigorous screening criteria we bring to all opportunities in terms of determining the most appropriate allocation of our capital to deliver the best value for shareholders. There is no reasonable expectation that the P2294 licence could generate any near-term cash realisation, thus voluntarily relinquishing the licence at this time allows the Company to focus its time and financial resources on alternative and more attractive opportunities.
"Following the recent May lifting we have updated our cash forecast such that if oil prices remain over $90/bbl we now forecast to have over $70.0m of net free cash post bond repayment. As such we are looking to utilise this cash to generate the best return for shareholders at an acceptable level of risk."
As of 0900 BST, Hurricane shares were down 1.51% at 7.84p.
Reporting by Iain Gilbert at Sharecast.com