UK-based oil and gas exploration company Hurricane Energy has announced its final audited results for 2018, expecting an “exciting period” over 2019 despite losses of $60.9m after tax.

This was an increase from 2017’s loss after tax of $7m. Hurricane Energy also reported a closing cash position of $83m, a decrease from 2017’s position of $326m.

In its report, Hurricane claims to have transitioned from an exploration and appraisal company to a “full-cycle exploration, development and production business” over 2018.

As part of this transition the company is preparing to produce its first oil from the Lancaster early production system (EPS), the first phase of its planned full field development of the Greater Lancaster area in the first half of 2019. Development cash expenditure on the Lancaster EPS cost $205.3m, and was cited as a reason for Hurricane’s full-year loss in 2018.

Following completion of substantial floating production storage and offloading (FPSO) upgrades and offshore installation works, the Lancaster EPS is expected to produce a net 17,000 barrels of oil per day (bopd) following the initial ramp-up period for the facility. Following this initial production the EPS is expected to have a production per well of 10,000bopd, to be achieved six months after the first oil.

Hurricane predict that the Lancaster EPS will generate in excess of $200m on a full-year run-rate basis.

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Hurricane chief executive Dr Robert Trice said: “This [cash flow] will allow us to pursue significant further appraisal and development activities within our Rona Ridge portfolio.

“This follows a highly successful 2018, which involved execution of a development programme including the upgrade of the Aoka Mizu FPSO and a significant offshore installation programme.”

The Lancaster EPS is also poised to start generating reservoir data to clarify the potential of Hurricane’s reserves and resources at its Rona Ridge portfolio.

As well as its projects in Lancaster, Hurricane have partnered with independent oil and gas operator Spirit Energy in a transformational deal for the Greater Warwick Area.

This includes a fully-carried three well drilling programme for 2019, with the first well expected to spud in April 2019. With these projects, Hurricane has a “clear path” to potential proved and probable reserves of over 100 million barrels during 2020.

Trice said: “With first oil from the Lancaster EPS and a three well drilling programme on the GLA, we look forward to another exciting period for Hurricane in 2019 as we advance our strategy of de-risking and monetising the substantial resources in our Rona Ridge portfolio.”