Horizon Oil has reflected on its strong financial and operating performance during the 2019 financial year, which included a record revenue of US$122 million ($180 million).
The company also registered an underlying profit before tax of US$37 million, delivered production of 1.6 million barrels (22 per cent increase on 2018) and a strong balance sheet with US$28 million of debt at June 30.
Chairman Mike Harding said its operations in China were underpinned by a strong relationship with CNOOC and its fields in New Zealand performed well with an additional 16 per cent acquired in 2018.
“PNG continues to present opportunities and challenges one what is an increasingly complex jurisdiction,” Harding said.
“The board renewal process continues with Chris Hodge joining the board and is up for election. Chris has 40 years of international oil and gas industry experience in the oil and gas industry as a geologist and petroleum geophysicist.”
Horizon chief executive Michael Sheridan highlighted that at the end of October, the net debt was further reduced to US$14 million.
“Over the past year, our Beibu Gulf fields in China, operated by our partner CNOOC Limited, have continued to achieve excellent performance with underlying production increasing 16 per cent and operating costs maintained below US$10/bbl sold,” he said.
“The joint venture’s efforts to maximise the productivity of our resource base and associated infrastructure were rewarded early in the 2019 financial year with the highly successful infill well program in our WZ 12-8 West and WZ 12-8 Mid fields. This was followed recently with the WZ 6-12M1 oil discovery.”
Sheridan also touched on other highlights of the operating and financial performance, including a 13 per cent increase in oil sales to a record 1.87 million barrels and average operating costs below US$20/bbl.
These results led to a 36 per cent increase in EBITDAX to US$93 million, 95 per cent 2P oil reserves replacement and a 68 per cent reduction in net debt to US$28 million at June 30, 2019.
“Looking ahead, and facilitated by our strengthened balance sheet, Horizon Oil is targeting growth opportunities in our focus area of Asia Pacific to complement our conventional oil production assets,” Sheridan said.
“Strong production and cashflow from our existing assets provide a sound platform for future growth. We will be disciplined in our assessment of opportunities and the execution of associated transactions.”