Shetland Oil Company Reduces Debt Burden As Crude Price Rises

SHETLAND’s oil pioneer Hurricane Energy improved its results after a period in which it faced great challenges.

Hurricane announced that it had bought back $ 15,000,000 (£ 11.25 million) of bonds from investment bank Stifel Nicolaus for $ 14 million. The deal is expected to result in a net savings on debt repayment and interest charges of US $ 1.8 million.

It comes six months after the High Court blocked a proposed debt-for-equity swap that would have left creditors in control of the business. Directors had said restructuring was the only realistic option open to the company.

Hurricane has been able to use the cash generated from its production off the Shetlands to buy back around $ 93 million in bonds in total since the court handed down its ruling, for $ 76 million.

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The Surrey-based company has outstanding bonds of $ 137 million to be repaid in July of next year. Interest is payable on these at 7 percent.

Managing Director Antony Maris said managing its ongoing debt remains a key focus for Hurricane.

However, the outlook for the company looks much brighter than before the High Court hearing in June.

The company benefited from rising crude prices fueled by the recovery from the pandemic.

The hurricane made discoveries that sparked enthusiasm for the potential of the region in West Shetlands under the leadership of its founder Robert Trice.

It started production at the Lancaster field in 2019.

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After encountering problems with a well on Lancaster, Hurricane downgraded estimates of field size and other findings.

The company saw its revenues drop sharply after the start of the pandemic that caused oil prices to plummet.

Mr. Trice resigned from his post as Managing Director in June of last year.

Hurricane Energy shares closed 0.1p lower, at 3.98p. They sold for around 60 pence after production started from the Lancaster. field.

Brent crude sold for $ 76.09 a barrel yesterday afternoon, up $ 0.65 / bbl on the day. The price has fallen sharply following the first reports of the Omicron variant of Covid-19. He recovered as fears about the potential impact of the variant eased.

The price fell below $ 20 / bbl in April of last year.

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