GODALMING, UK — The boards of Prax and Hurricane Energy have reached an agreement on an acquisition of Hurricane via a share offer, with a potential value close to £250 million ($301 million).
Hurricane is an E&P company focused on offshore fractured basement reservoirs west of Shetland. It has a 100% interest in the producing Lancaster Field, where latest estimates suggest remaining proved and probable reserves at 6.6 MMbl.
Currently the field is producing 7,710 bbl/d from a single well, with a water cut of 52%, through the leased Aoka Mizu FPSO. Production is set to continue until August 2025 at an assumed oil price of $80/bbl oil price, at which point Lancaster will be abandoned.
Hurricane has 28 employees and offices in Godalming, south of London and in Aberdeen.
Prax is a wholly owned subsidiary of State Oil Ltd., the holding company of the Prax Group, a UK- headquartered midstream and downstream energy group. Prax aims to build an upstream business in the North Sea that will complement its existing activities.
The proposed acquisition is the conclusion of a formal sales process, interest in which dipped following the UK government’s decision to introduce its Energy Profits Levy last year. Twelve companies engaged in the process, Hurricane said, with five providing actionable offers.
Alessandro Agostini, head of E&P at Prax Group, said, "We are committed to building a scaled upstream division and have the financial, strategic and management capacity to complete further upstream M&A at pace. Hurricane is the first step and the platform from which our upstream division will be built, as, together with our M&A colleagues, we review the potential acquisition of further complementary UK continental shelf upstream assets.”