Target Price lifted to 16c

Horizon Oil Limited (HZN) - WZ12-8E development de-risking ahead of first oil HZN provided a progress update on its WZ12-8E offshore oil development in China. Drilling operations are planned to commence in Oct’ 21. Timelines are consistent with prior expectations allowing HZN to reiterate its target for first oil in Mar. Q’22. Gross production is anticipated to average 4,000 bopd in year one. We believe WZ12-8E has derisked sufficiently to incorporate production uplift into our estimates. We continue to view HZN as a leveraged play on rising oil prices, with investors able to look forward to further capital management initiatives. Maintain BUY rating and lift TP to A$0.16/sh (prior A$0.14/sh) after including WZ12-8E into our production forecasts.WZ12-8E approaches first oil in Mar Q 2022Solid progress has been made on the construction phase of the WZ12-8E development, under the management of the operator, Roc Oil. Platform construction was 67% complete at the end of May. HZN’s share of project development costs to completion is ~US$12m.Drilling operations are planned to commence in October 2021, paving the way for first oil in Mar Q 2022 adding ~4,000 bopd over the first year before existing declines.Initial production to commence from two wells, with additional wells to brought online as drilling progresses.Cheap exposure to rising oil prices HZN provides investors cheap exposure to rising oil prices. Our modelling implies an FY 2022F EV / EBITDAX of 1.3x. We view this as cheap considering HZN also offers a strong balance sheet (net cash US$28m) and low cost portfolio at


I know Petra are in regular contact with HZN so it’s Interesting they seem to be very confident of a dividend with an estimated yield of 8-10%.
petra cash levels are a little underestimated with April HZN cash guidance of 19 M USD pre options cash and pre June quarterly cash flow not included . My estimate is USD cash closer to 40m USD after allowing a few million ( 3.5m USD ) on WZ12 -8E