The curious case of the Hurricane bid

UKCS producer’s pared-back portfolio appears to tick few boxes

The board of Hurricane Energy, the North Sea upstream firm that aimed to exploit the potential of fractured basement reservoirs, has rejected a 7.7p/share bid for its entire issued share capital but has launched a formal sales process to try to attract a hungrier suitor. Analysts, though, are puzzled as to the attraction of Hurricane in the current UK continental shelf (UKCS) M&A environment. Hurricane argues it is in “a very strong financial and operational position” and that the offer, at a premium of only 13pc above its 6.8p/share 1 November closing price, undervalues the firm. It is debt free, its decommissioning liabilities are fully funded and forecast year-end net free cash is c.$