SHETLAND oil pioneer Hurricane Energy has secured a boost to its bottom line following a period in which it faced big challenges.
Hurricane said it has repurchased $15,000,000 (£11.25m) bonds from Stifel Nicolaus investment bank for an outlay of $14m. The deal is expected to result in a net saving in debt repayment and interest charges of U.S.$1.8m.
It comes six months after the High Court blocked a proposed debt-for-equity swap that would have left creditors in control of the firm. Directors had said the restructuring was the only realistic option open to the firm.
Hurricane has been able to use the cash generated from its production off Shetland to repurchase around $93m bonds in total since the court made its decision, for $76m.
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The Surrey-based company has $137m bonds outstanding for repayment in July next year. Interest is payable on these at 7 per cent.
Chief executive Antony Maris said that managing its outstanding debt remains a key focus for Hurricane.
However, the outlook for the firm looks much brighter than it did before the High Court hearing in June.
The company has benefited from the increase in crude prices that has been fuelled by the recovery from the pandemic.
Hurricane made finds that generated excitement about the potential of the area West of Shetland under the leadership of its founder Robert Trice.
It started production from the Lancaster field in 2019.
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After facing problems with a well on Lancaster, Hurricane slashed estimates of the size of the field and other finds.
The company saw revenues fall sharply after the onset of the pandemic sent oil prices tumbling.
Mr Trice resigned as chief executive in June last year.
Shares in Hurricane Energy closed down 0.1p, at 3.98p. They sold for around 60p after it started production from the Lancaster. field.
Brent crude sold for $76.09 per barrel yesterday afternoon, up $0.65/bbl on the day. The price fell sharply following the first reports about the Omicron variant of Covid-19. It has recovered as fears about the potential impact of the variant have eased.
The price fell below $20/bbl in April last year.
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