OIL and gas pioneer Robert Trice has hailed the start-up of the giant Lancaster field West of Shetland which could usher in a new era for the North Sea oil and gas industry.

The Hurricane Energy business led by Mr Trice announced yesterday that it had started production from Lancaster in a landmark success for the firm.

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Estimated to contain around 500 million barrels, Lancaster lies in an area in which there has been limited exploration activity.

The field is in a layer of granite known as the fractured basement, beneath the sandstone the North Sea exploration effort has focused on.

“Lancaster is the UK’s first producing fractured basement field and the fact that Hurricane has delivered this industry milestone on time and within budget is an incredible achievement,” said Mr Trice yesterday.

The performance of the field will be studied closely by other oil and gas firms as the North Sea industry emerges from the slump triggered by the plunge in the crude price from 2014 to early in 2016.

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Romana Adamcikova, a senior North Sea analyst at the Wood Mackenzie consultancy noted: “The next 12 months are pivotal for Hurricane Energy and the UK’s fractured basement play.”

She said if Lancaster flowed successfully the field would generate significant revenues, interest in West of Shetland and mergers and acquisitions activity.

Mike Tholen of the Oil & Gas UK trade body said: “Hurricane Energy’s announcement of first oil from the Lancaster Development further highlights the exciting potential of the United Kingdom Continental Shelf and the North Sea’s continued position as an attractive investment opportunity.”

Hurricane’s achievement in getting to this stage has already helped generate huge interest in the West of Shetland area.

Some sector watchers reckon the area could contain enough oil and gas to help support another generation of life for the North Sea industry.

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Hurricane received a huge vote of confidence last year when Spirit Energy bought into its acreage.

Spirit, which is part-owned by Centrica, agreed to fund a $180m drilling campaign on a find and a prospect.

If all goes to plan, Hurricane will generate huge amounts of cash from Hurricane, with average daily production expected to top 10,000 barrels oil daily.

The company has been left sitting on a £1.2 billion stock market capitalisation that provides a remarkable vindication of the faith Mr Trice has shown in the potential of the fractured basement.

After working at Enterprise Oil, Mr Trice founded Hurricane in his garden shed in 2005.

Lancaster went on to make enough progress to persuade the Kerogen Capital private equity house to provide £44m backing in 2016 allowing the firm to keep drilling amid the downturn. It raised £400m from investors in 2017 to fund work on an early production system (EPS) for Lancaster.

Hurricane will assess the results from this before deciding whether to proceed with a full field development.

Read more: Oil firms to explore frontier areas off UK

A range of relatively small firms were awarded acreage in the latest UK licensing round this week. The round covered what are classed as frontier areas, including East of Shetland.

Winners included United Oil and Gas, which was awarded acreage around 115 miles north east of Aberdeen and in the English channel.

The territory off England contains the Colter discovery made by Corallian Energy this year and a find made in 1984.

Surrey’s Pharis Energy was awarded licences off eastern Scotland containing undeveloped finds. It hopes to increase the amounts recoverable from heavy oil finds by using steam rather than cold water to help squeeze output from reservoirs.

Giants such as BP, Shell and Equinor applied successfully for acreage in the latest round.