UK-based oil and gas company Hurricane Energy has signed a contract with floater specialist Bluewater for an extension to the bareboat charter of the Aoka Mizu floating production storage and offloading (FPSO) on the Lancaster field west of Shetland.
floating production storage and offloading (FPSO) on the Lancaster field west of Shetland.The deal has been extended beyond the current expiry date of June 4, 2022, and will see the FPSO stay on the field for the remainder of its economic life. The existing day rate and tariff for the vessel will remain at $75,000 per day and 8% of revenue, respectively.
Either party can give six months’ notice to terminate the charter. Hurricane has agreed to establish a secured deposit account of up to $18.7m for the benefit of Bluewater to cover the costs associated with the day rate for the six-month notice period and decommissioning in respect of the vessel.
Antony Maris, CEO of Hurricane, commented: “Securing the extension to the FPSO contract is an important next step forward. It was key we found a mutually acceptable deal that will enable the company to continue production beyond repayment of the bond. Based on the current oil price and field performance predictions we forecast this to be at least 18 months from June 4, 2022.
“With production continuing in line with our projections, good uptime performance on the FPSO and assuming oil prices are in the range $90-110/bbl, we believe that post clearing our bond debt and after funding the Bluewater secured deposit account, Hurricane will have between $50-80m of net free cash at the end of July 2022.”
