- Lost Time Injury Frequency Rate (LTIFR) of 0.0, Total Reportable Injury Frequency Rate (TRIFR) of 0.0 at 31 December 2016 over a 12 month rolling period (~25,000 manhours)
-Continued strong production during the period from combined WZ 6-12 and WZ 12-8W fields in the Beibu Gulf producing above budget at 1.48 mmbo (~400,000 bbl net to HZN)
- Horizon Oil's share of crude oil sales was 523,960 barrels - approximately 35% of field production (additional 124,159 barrels over net working interest share of 26.95%) due to preferential cost recovery entitlement
- Progress of Overall Development Plan for the WZ 12-8E field continues, with completion scheduled in early 2017
- Production during the period of ~1.49 mmbo (~150,000 bbl net to HZN).
- Production for the period was affected by the scheduled maintenance and repair shutdown period from 24 November 2016. Production recommenced on 12 January 2017; water reinjection system successfully reinstated on 29 January 2017. The Company anticipates that a material proportion of the cost of these works will be recovered from insurance.
Papua New Guinea
- Progressed development concept for a Western Province-based greenfield mid-scale LNG project, through collaboration of the PDL 10 and PRL 21 joint ventures, and the formation of a Joint Working Team (JWT). Cornerstone gas volumes for the proposed "Western LNG" project to be provided by PDL 10 (Stanley) and PRL 21 (Elevala/Ketu)
- HZN acquired strategic 50% interest and operatorship of Ubuntu gas/condensate field in PRL 28 (adjacent to PRL 21) via acquisition of Eaglewood Energy (BVI) Limited in January 2017
Outlook for the next 12 months
- Operating cashflows expected to increase as a result of additional revenues earned from China production entitlement through cost recovery of remaining US$105 million (net to Horizon Oil)
- Continued focus on reduction of overall gearing levels
- ~50% of CY 2017 sales hedged at an average price ~US$54/bbl
- Maintenance of low capex profile and G&A over the course of FY17
Maari/Manaia, offshore New Zealand
- Further optimisation of oil production through workover program and installation of multiphase pumps
- Finalise insurance recoveries in relation to facility repairs and equipment upgrades associated with the FPSO Raroa's mooring system and water injection line
Block 22/12, offshore China
- Preparation of the Overall Development Plan for the WZ 12-8E field continues, with completion scheduled in early 2017. The audited gross 2C resources for the field (including WZ 12-10-1 and WZ 12-3-1) are 11.1 mmbo
PDL 10 (Stanley), PRL 21 (Elevala/Tingu/Ketu) and onshore Papua New Guinea
- Progress the development concept for the Western Province gas aggregation scheme, through collaboration of the PDL 10 and PRL 21 joint ventures, and the formation of a Joint Working Team
- Subsequent to the half-year period end, HZN acquired Eaglewood Energy (BVI) Limited, which holds a strategic 50% interest in the discovered Ubuntu gas and condensate field in PRL 28 (adjacent to PRL 21), in addition to some smaller exploration interests in PNG
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About Horizon Oil Ltd
Horizon Oil Limited (ASX:HZN) (OTCMKTS:HZNFF) is an ASX-listed petroleum exploration and production company, with a geographic focus on the Asia-Pacific region. The company currently produces over 4,000 barrels of oil per day net from its fields in New Zealand and China, which generated over US$80 million in net operating income after operating expense for the year ended 30 June 2015. Further development candidates remain in and around these producing fields.
Horizon Oil maintains prudent policies of oil price hedging and loss of production insurance to ensure that sufficient cash flow is generated to meet the funding requirements of its growth program.
The company holds a large undeveloped reserves and contingent resource position in Western Province, onshore Papua New Guinea. These are liquids-rich gas resources and reflect Horizon Oil’s strategy to focus on Asian gas for growth. Gas constitute about 2/3 of the reserves and resource base. Commercialisation pathways for the gas are emerging.
Although Horizon Oil anticipates continuing strong cash generation over the medium term from its existing producing fields, these developed reserves account for only 10% of total reserves and resource base. The focus going forward will be on new field development, funded largely from existing production cash flow.
Horizon Oil Ltd