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Horizon Oil forecasts ongoing strong production in China, NZ

Thursday 23rd August 2018

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Horizon Oil is projecting similar production for 2019 and improved revenue on the back of infill drilling at its operations in China’s Beibu Gulf and ongoing optimisation efforts in the Maari field off the Taranaki coast.

The Sydney-based explorer is expecting oil sales of 1.6 million to 1.8 million barrels in the current financial year, up from the 1.65 million achieved in the June year just ended. Sales revenue will likely range from US$100 million to US$120 million, compared with the US$100 million just reported after hedging.

“It is expected that the 2019 financial year and beyond will be underpinned by continued strong oil production from the group’s China and New Zealand operations,” the company said in its report for the year ended June 30.

Horizon today reported a 52 percent increase in operating earnings due to increased production in China and New Zealand and higher oil prices. Earnings before interest, tax, depreciation, amortisation and exploration expenses climbed to US$68.5 million from US$45.2 million.

Oil sales rose by 16 percent to 1.65 million barrels, reflecting Horizon’s purchase of Todd Energy’s 16 percent stake in the OMV-operated Maari field in New Zealand during the period. It now owns 26 percent of the project.

Horizon’s sales from its China National Offshore Oil Corp-operated interests in the Beibu Gulf increased 6 percent to 1.17 million barrels. Oil prices rose to an average US$64.35 before hedging, from US$47.81 a year earlier.

Horizon also has a 30 percent interest in a series of permits forming the proposed Western LNG project in Papua New Guinea. Repsol, the operator of the project’s two major permits, is planning to sell out and has had its standing challenged by the government there.

Horizon reiterated that it believes the bid to cancel the Repsol-operated Stanley permit and the associated gas supply agreement is without merit and procedurally invalid. It noted that the recovery in oil prices this year has improved the economics of an option for the early development of gas and condensate sales from the Stanley permit, pending the longer-term completion of Western LNG.

(BusinessDesk)

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