Horizon bucks trend, records profit

Horizon bucks trend, records profit
Wednesday, 25 February 2015
HORIZON Oil has bucked the widespread loss-making trend for the second half of 2014, recording an after tax profit of $US7.3 million ($A9.4 million).
The result compares with the Asia-focused explorer’s $47,000 loss for the last six months of 2013.
The turnaround was helped along by gross profits of $22.35 million taken from oil sales from Block 22/12 in China’s Beibu Gulf and the Maari and Manaia fields in New Zealand.
Crude sales in China amounted to 455,561 barrels of oil at an average price of $83.15 per barrel, executed under hedging agreements.
Hedging agreements were also responsible for keeping the company’s New Zealand sales at $98.10 per barrel, with sales covering 109,835bbl as the area delivered six months of full production following its shut-in period in the previous corresponding six months.
Exploration expenditure for the period came to $10.9 million as the company sought to find and add more reserves to its Beibu Gulf development and expand its knowledge of its PNG assets.
In particular, the explorer drilled and completed two development wells in its Stanley licence in PNG during the half-year.
The company has, however, announced that it is undertaking a value engineering review process over the project in light of the current oil price.
In addition, the company has extended its project selection duration in the Elevala/Ketu discoveries in the island nation to ensure cost estimates are in line with market conditions.
The company has been entertaining the idea of a Western Province-based greenfield mid-scale LNG project, however, the recent announcement by the PNG LNG partners that a pipeline might be built through the nearby P’nyang field has presented it with another possible opportunity.
The company, while still considering the Daru Island LNG project proposal as its base case, is also now entertaining the idea of aggregating gas from Stanley, Elevala/Ketu and Ubuntu into the pipeline to feed PNG LNG.
Another major occurrence for the company during the period was the failed merger with Roc Oil, which ended up receiving a superior offer from Chinese conglomerate Fosun International.
The merger was to create a leading Asian mid-cap exploration and production company.
Horizon reported cash on hand at the end of 2014 was $43.5 million.

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