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Hurricane Energy Share Price Has Risen 354.5% in the Past Six Months. Should You Buy?

Trade Hurricane Energy Shares Your capital is at risk
Updated: 27 Oct 2021

Hurricane Energy PLC (LON: HUR) share price has risen 354.5% over the past six months, rewarding shareholders who held through the decline to its May all-time lows of 0.6p. However, investors who missed out are wondering whether now is the right time to buy.

Well, the short answer is No. Now is not a good time to be buying Hurricane  Energy shares, given the significant risks faced by the company as it nears the bubble point at its flagship Lancaster oil field.

The UK offshore oil and gas company recently released its H1 2021 earnings report. It recorded a profit of $42.8 million compared to the $307.8 million loss recorded in a similar period last year.

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While its H1 results were impressive, Hurricane Energy is currently producing oil from its P6 well and recently warned investors that it could reach the bubble point as early as in Q1 2022. As a result, the company will have to start flaring the gas produced once the bubble point is reached.

Hurricane Energy expects to produce up to 16 million barrels of oil from the early production system at Lancaster after its production capacity was downgraded from 37.3 million barrels of oil.

The company is also keen to repay its outstanding debts, including its redeemable bonds, worth $152 million after buying back 34% of its convertible bonds at a discount using $62 million, which also covered outstanding interest payments.

Meanwhile, investors have a reason to be hopeful given the current management team’s efforts to ensure the company remains financially stable even as it faces a potential shutdown at its Lancaster field.

Hurricane Energy got a new lease of life after the previous management team resigned after the UK High Court rejected its restructuring plan because it mistreated current shareholders while favouring bondholders.

Therefore, I wouldn’t be buying the oil company’s shares at the current prices due to its tough predicament.

*This is not investment advice.

Hurricane Energy share price.

IG chart of Hurricane Energy share price 27-10-2021
Source: IG

Hurricane Energy share price has risen 354.5% over the past six months. Should you buy it?

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