Hurricane Energy : 6,491KB

Key figures

Revenue

From 6 cargoes

$311 million

Free cash flow†

Equivalent of $57 per barrel during 2022

$176 million

Statutory profit after tax

$109 million

Production

Average daily rate

8,500 bopd

Crude oil sales

Across 6 cargoes

3.2 MMbbl

Net free cash† at 31 December 2022

$121 million

Strategic Report

1. Highlights
2. Chairman's Statement

1. Chief Executive Officer's Review

1. Strategy and Business Model

1. Stakeholder Engagement

1. Section 172

1. Chief Financial Officer's Review

1. Going Concern

1. Principal Risks and Uncertainties

29 Environmental, Social and Governance Report

Corporate Governance

1. Board of Directors

1. Governance Report

1. Audit and Risk Committee Chair's Report

1. Nominations Committee Chair's Report
2. Directors' Remuneration Report

1. Directors' Report

Financial Statements

63 Independent Auditor's Report

1. Group Statement of Comprehensive Income
2. Group Statement of Financial Position
3. Group Statement of Changes in Equity
4. Group Cash Flow Statement
5. Notes to the Group Financial Statements

1. Company Statement of Financial Position
2. Company Statement of Changes in Equity
3. Notes to the Company Financial Statements

1. Advisers
2. Appendix A: Glossary

1. Appendix B: Non-IFRS Measures

1. Notes

STRATEGIC REPORT

STRATEGIC REPORT

Chairman's Statement

Philip Wolfe

Chairman

Dear Shareholders,

I am pleased to present the 2022 annual report for Hurricane Energy, the first year of my chairmanship.

2022 was a busy and important year for Hurricane, and 2023 to date has been transformational

for the Company, as we hope to complete the recommended acquisition of Hurricane by Prax Exploration & Production PLC (Prax) (a wholly- owned subsidiary of State Oil Limited) imminently.

The terrible events in Ukraine provided a volatile backdrop for the energy sector throughout 2022, with sharp movements in commodity prices and an enhanced focus on security of energy supply. The imposition by the UK government of the Energy Profits Levy only added to the sense of instability for the sector.

Operationally and commercially 2022 was a strong year for the Company. Production averaged 8,500 bopd from the Lancaster field with uptime of 97%. In July 2022 we were able to pay off our outstanding Convertible Bonds, as a result of the excellent operational performance at the field, combined with strong oil prices. In May we welcomed Linda Beal to the Board, followed shortly thereafter with Robin Allan joining us in July. Both joined as Independent Non-Executive Directors, and have contributed superbly to our discussions since their arrivals in what has been a busy time for the Board.

Having repaid our debt and established a firmer footing, the Company considered its options in terms of increasing production at Lancaster. However, despite many months of engagement we did not receive the requisite comfort from the regulator, the NSTA, required for the very material investment proposed.

In November 2022, following the receipt of an unsolicited bid for the Company valuing each share at 7.7p which the Board concluded should not be recommended to shareholders, and with our largest investor, Crystal Amber, being clear that they wished to monetise their holding in Hurricane and would not support an investment-led growth strategy, the Board launched a Formal Sale Process.

This thorough and exhaustive process culminated in the Board recommending an offer from Prax. Should the Scheme be sanctioned by the Court, I believe Hurricane has an exciting future as part of the wider Prax organisation.

During what has been an exciting but also challenging period, I would like to thank our staff, the Board and our advisors for their continuing hard work during a particularly busy and uncertain time for the Company.

Philip Wolfe

Chairman

25 May 2023