What next for the Hurricane Energy share price as Warwick site reveals vulnerability?

Hurricane Energy has seen its share price tumble more than 35% since the end of November, driven by disappointing drill results at its Warwick West site which highlighted vulnerabilities.

Last week, the company revealed that the Warwick West site was only capable of producing 1,300 barrels of oil per day, which is weak compared to Hurricane Energy’s pervious wells.

Hurricane Energy is trading at 30p a share as of 16:15 GMT on Wednesday.

Berenberg remains upbeat about Hurricane Energy

Despite the news, analysts at Berenberg remain optimistic about Hurricane Energy, with the Hamburg-based bank reiterating its ‘buy’ rating and issuing a 100p target price for the stock, representing a potential upside of 233.3%.

While analysts at Berenberg agreed that flow rates at the Warwick West well were insufficient to be commercially viable, they had not banked on the site reaping major rewards, with the bank pinning its hopes on its site in Lancaster.

‘The focus remains on Lancaster, where results from the early production scheme (EPS) continue to deliver in line with guidance,’ Berenberg analysts said in a note.

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Barclays Capital refuses to share Berenberg’s optimism

Analysts at Barclays Capital failed to share Berenberg’s optimism about Hurricane Energy, with the bank reiterating its ‘overweight’ rating for the stock and downgrading its target price from 55p to 50p in December.

The new target price still implies a potential upside for the stock of 66.6%, however.

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