Ann: Quarterly Report Presentation, page-13

UBS upgrades HZN to buy today (from neutral) after investor presentation:


HZN has reported June qtr production of 0.37 mmbbl (UBSe: 0.38 mmbbl) and sales of 0.32 mmbbl (UBSe: 0.36 mmbbl), with revenues (including hedging) of US$25.1m (UBSe: uS$29.2m). Maari prod'n was up 69.3% vs the March qtr, due to progress on the Maari Growth Program. At the end of June HZN had US$61.3m cash (up from US$39.4m at end March qtr), a fully drawn US$120m reserves-based lending facility and US$80m in convertible bonds. Adjustments to our oil sales and depreciation have reduced our FY15 EPS estimates by 39.8%.

HZN set to navigate through convertible bond redemption in mid-CY16

HZN had US$138.7m in net debt at 30 June after investing in Beibu Gulf and Maari Growth Program. Astute oil hedging has meant the company hasn't had to raise equity, but all focus is on the next 12 months, with the redemption obligations of its US$80m (due mid-CY16). HZN remains confident that with the US$120m reserves based lending facility + access to a US$50m 'accordion' debt facility + capex reduced to US$33m over the next 12 months + >US$80m in forecast operating cash flow over the same period, the company has sufficient liquidity available to repay the notes and fund PNG.