Ann: Quarterly Activities Report, page-2

It was generally a good quarter with no surprises.It has mainly confirmed two crucial HZN claims:

1) even if Chinese oil production is slowly declining (as expected), profit margin at the Beibu field is increasing
2) Maari oil field production will come back strong in the next quarters as the expansion/maintenance work is advancing.

Despite overall oil production decreased (due to natural oil field decline, typhoon, ongoing development works), oil sales remained stable as operation profit margin greatly increased by 25%: $13541 vs $10761 (previous quarter). Exploration and development costs almost doubled (as expected) but the quarter balance registered a reasonable $12204 loss.

China: 1) two oil discoveries out of two exploration drills; 2) Beibu oil production unlucky affected by typhoon activity but looks steady despite natural field declining; 3) operation field costs and amortisation sinked by 25%.

NZ: 1) Maari oil production slightly increased despite drilling activities; 2) some delays in completing the MR6A production well but development work is advancing well with MR8A well coming on stream soon; 3) interestingly, the Whio-1 exploration results (no oil discoveries) are still being evaluated: may they consider having another "try"?  

PNG: 1) Stanley drilling campaign successfully completed with gas production wells delivering better than expected results in performance tests, 2) development and exploration activities continued as expected 3) "reasonable" delay (about one month) in the Nama-1 exploration drilling.

From my point of view, the greatest news in this quarter remains the HZN oil hedging strategy: they secured the sale of about 800,000 barrels (50% of year oil production) for the price of about $96 a barrel till July 2015 - therefore, crucially reducing the effects of the current oil price decline over HZN yearly revenues. Here, please a standing ovation for the HZN board.

Comments, anyone?