Hurricane Energy PLC continues to be the stand-out oil stock of 2016, but following the release of encouraging details on the group’s drill plans in the North Sea there are suggestions that there’s still much more to come.

The AIM-quoted share traded positively on Monday as investor caught up on the group’s latest update.

On Friday, the group unveiled the latest value-added steps for a very large oil project – potentially as much as 1bn barrels or more – which is now being referred to as the Greater Lancaster Area.

It revealed that an area immediately next-door to the Lancaster field had been licensed and that the fourth and final well of the current programme would be drilled there.

That will follow the Lincoln exploration well, where drilling is already underway.

Hurricane’s chief executive, Dr Robert Trice, described Halifax as “an extremely exciting opportunity” and a logical target following this year’s successes at Lancaster.

“Our exploration objective is to demonstrate that Halifax is analogous to Lancaster in that the reservoir is highly fractured and that a significant hydrocarbon column is present outside of structural closure,” Trice said.

“If we are successful in this aim, then we believe it will be a significant step in establishing the true extent of the Greater Lancaster Area.”

Oil companies expert Malcolm Graham Wood, in his daily blog, described the acquisition of the Halifax licence as “a stroke of genius”.

He noted: “at a stroke HUR may have picked up a possible 250mln barrels next door to the Lancaster discovery from which it probably extends.”

“Hurricane is now in an extraordinarily strong position; it is well-funded and at present has been able to resist farming-out the prospects; the boot is now on the other foot, [and] those discussions may be for another day,” he added.

“The Lancaster EPS is moving ahead and initial contracts have been awarded, the CPR [competent person’s report], due next spring, may be an interesting read; by then much more may have changed.

“The word transformational is overused but not here; we have a new major UKCS [UK continental shelf] player with a potential world class discovery on its hands and the share price hardly changes; the words gift horse and mouth come to mind.”

Graham-Wood also highlights that his target price ‘has just gone into three figures’.

The Lincoln exploration well is located just nine kilometres from Lancaster, and drilling began around two weeks ago.

Hurricane currently believes Lincoln could contain 250mln barrels of crude.

As with the Lancaster wells, the plan is to confirm the geological theory, and quantify the amount of crude in the ground.

Lincoln is believed to be similar to Lancaster, and if the programme is successful it should add significant incremental value to what could become a ‘hub’ development in what would be known as the Greater Lancaster Area.

The programme is expected to take between 45 to 60 days, so a result could potentially come before the year end.

Source: www.proactiveinvestors.co.uk