HORIZON OIL LIMITED HALF-YEAR 2021 RESULTS PRESENTATION
24 FEBRUARY 2021
HORIZON OIL LIMITED | ABN 51 009 799 455
HY21 EXECUTIVE SUMMARY
STRONG CASHFLOW DRIVING VALUE FOR SHAREHOLDERS
24 FEBRUARY 2021
PAGE 2
FINANCIAL RESULTS
2021 HALF-YEAR HIGHLIGHTS
LOW COST, CASH GENERATIVE OIL PRODUCER
• Cashflow positive during low oil prices - cashflow from operating activities of US$10.0 million
• Strengthened balance sheet -net cash of US$10.0 million at 31
December 2020 an increase of US$9.5 million during the half-year
• Efficient operations - continued rationalisation of operating costs
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• China Beibu - investment during the low oil price environment has resulted in increased production as oil price strengthens
• Workovers successfully and safely completed restoring production
• Capital management initiatives - return of capital to shareholders through on-market buy-back of up to 8% of issued shares
• Environmental, Social & Governance (ESG) - continued focus with no losses of containment, strong safety record (TRIFR 1.37)
The 2021 Half-Year results were achieved in a low oil price environment & demonstrate the resilience of Horizon's cashflow and base business
6 months to 31 Dec 2020 | 12 months to 31 Dec 2020 | |
Production Volumes | 0.6 mmbbls | 1.4 mmbbls |
Sales Volumes | 0.6 mmbbls | 1.3 mmbbls |
Revenue (USD) | $26 million | $58 million |
EBITDAX (USD) | $ 11 million | $31 million |
Underlying Profit after tax (USD) | $0.4 million | ($0.6 million) |
Statutory Profit (USD) | $4.7 million | $12.3 million |
Net Cash (USD) | $10 million at 31 Dec 20 | |
Cash (USD) | $33 million at 31 Dec 20 |
POSITIVE CASHFLOW INCREASING NET CASH
US$ MILLION
- 1.4
-
34.4
33.0
33.0
25.9
Opening cash Crude oil sales and cash equivalents at 30 June 2020
Hedging settlementsOperating costs (excl amortisation)Corporate & tax
InterestNet cash inflows from operating activitesDebt repayment and transaction costs
Proceeds from Investment inExplorationsale of PNG oil and gas and expenditureassetsother assets
Closing cash and cash equivalents at 31 December 2020
REDUCED OPEX OFFSETS LOWER OIL PRICE
US$ MILLION
30.0
20.0
25.0
10.0
15.0
0.0
5.0
Underlying profit
Underlying profit after tax for HY 2020
Operating costsG&A / other income
Exploration and development expenses
Financing costsIncome tax and royalty tax
Sales volumeNet realised oilprice. Inclusive of after tax for HY 2021 hedge settlements
CONSISTENCY OF SALES VOLUMES
LOW COST PRODUCTION RETAINS PROFITABILITY
POSITIVE FREE CASHFLOW & INCREASED NET CASH POSITION
FREE CASH FLOW (US$m)
80.0
60.0
40.0
20.0
0.0
-20.0
-40.0
-60.0
CY 2016
CY 2017
CY 2018
CY 2019
CY 2020
Operating CFInvesting CF
FCF
FCF (excl. cost recovery)
* Free Cash Flow represents cash flows from operating activities less investing cash flows (net of acquisition payments)
OUTLOOK & ASSET UPDATES
OVERVIEW OF PORTFOLIO
Block 22/12 (Beibu Gulf]
26.95% / 55%
•
Asia Pacific focus
•
•
Asia Pacific focus
Material joint venture interests
•
•
Material joint venture interests High margin, long life oil production
•
Hasigshetms ainrgCihni,nlaonagndlifNeeowil pZreoadlauncdtion gasesnetrsatininCghsitnraonagndcaNsehwfloZwealand generating strong cashflow
PMP 38160 (Maari/Manaia)
PMP 38160 (Maari/Manaia)
26% 26%
RELIABLE, LONG-LIFE & HIGH MARGIN PRODUCTION
CHINA - BLOCK 22/12
BLOCK 22/12 PRODUCTION HISTORY & OUTLOOK
14,000 12,000
CY 2016
3.28
8,981
CY 2017
CY 2018
10,000 8,000 6,000 4,000 2,000
CY 2019
3.04 3.60 3.43
8,326 9,857 9,399
CY 2020 Average
3.33 3.37
9,117 9,136
• Current gross daily production rate back above 10,000 bopd following successful infill wells in WZ 6-12 fields.
-
• Production rates maintained since first production over 8 years ago through infill and nearfield drilling, installation of additional water handling capacity and production optimising well workovers.
• JV evaluating infill well opportunities, which together with the WZ12-8E field development, seeks to maintain production levels.
NEW DEVELOPMENT
CHINA - BLOCK 22/12
WZ 12-8E Project
• Final investment decision made in October 2020 with the fabrication of the wellhead platform progressing well.
• First oil is expected in early calendar year 2022 with gross oil production from the first phase expected to average a first-year oil rate of 4,000 bopd.
• Provides a hub for the development of the remaining discovered resources in Block 22/12 - including WZ12-8E and 12-3 fields, with access to further prospective opportunities. First phase of the development is expected to recover 0.6 mmbbls 2P reserves net to Horizon.
• The development of WZ12-8E is planned with a new wellhead platform tied back to the existing WZ12-8W platform. The new platform will be leased by the joint venture, reducing upfront capital costs.
• Total development costs are linked to oil prices, Horizon's total share is estimated to be approximately US$15 million, with the majority phased throughout the 2021 and 2022 calendar years.
STABLE, LONG-LIFE PRODUCTION
• Gross daily production rate currently approx. 5,500 bopd
• Workover of MR6A well (1H CY2021) - expected to restore gross production to above 6,000 bopd.
• Overall production decline rate reduced through continued water injection and well optimisation.
Annual Gross Production, | Average Daily Gross Production, | |
mmbbls | bopd | |
CY 2018 | 2.28 | 6,256 |
CY 2019 | 2.44 | 6,675 |
CY 2020 | 1.81 | 4,957 |
Average | 2.18 | 5,963 |
OUTLOOK
RESILIENT IN A LOW OIL PRICE ENVIRONMENT - A PLATFORM TO DRIVE SHAREHOLDER VALUE
STRONG OPERATIONAL CASHFLOWS |
|
STRENGTHENED BALANCE SHEET |
|
DRIVE SHAREHOLDER VALUE |
|
ENVIRONMENTAL SOCIAL GOVERNANCE |
|
FY21 GUIDANCE
RECOVERING OIL PRICE TO AID INCREASED CASH GENERATION
PRODUCTION VOLUME (Net Working Interest Volumes) | 1.3 - 1.4 mmbbls |
SALES VOLUME | 1.2 - 1.3 mmbbls |
REVENUE | US$55 - 60 million |
EBITDAX | US$25 - 35 million |
The above Guidance represents forward looking statements. Such statements relate to future events and expectations, such as oil price movements, and as such involve known and unknown risks and uncertainties. Actual results, actions and developments may differ materially from those expressed or implied by these forward looking statements depending on a variety of factors. Refer to disclaimer on the following slide.
COMPLIANCE STATEMENTS
Disclaimer
Statements contained in this material, particularly those regarding the possible or assumed future performance, costs, dividends, returns, production levels or rates, prices, reserves, potential growth of Horizon Oil Limited, industry growth or other trend projections and any estimated company earnings are or may be forward looking statements. Such statements relate to future events and expectations and as such involve known and unknown risks and uncertainties. Actual results, actions and developments may differ materially from those expressed or implied by these forward looking statements depending on a variety of factors.
While every effort is made to provide accurate and complete information, Horizon accepts no responsibility for any loss, damage, cost or expense incurred by you as a result of any error, omission or misrepresentation in information in this presentation.
In this presentation, references are made to EBITDAX, Underlying Profit and Free Cashflow, which are financial measures which are not prescribed by Australian Accounting Standards:
• EBITDAX represents the profit from continuing operations adjusted for interest expense, taxation expense, depreciation, amortisation, and exploration expenditure (including non-cash impairments)
• Underlying profit represents the profit from continuing operations adjusted for the unrealised movement in the value of options issued under the subordinated loan facility, unrealised movements and gains associated with financial derivatives and non-cash impairments
• Free Cash Flow represents Cashflow from Operating Activities less Investing cashflows
(net of acquisition payments)
All references to dollars in the presentation are United States dollars unless otherwise noted.
Amounts in this presentation may not cast due to rounding differences.
Reserves Disclosure
Unless otherwise stated, all petroleum reserves and resource estimates refer to those estimates as set out in Horizon's Reserves and Resources Statement as at the balance date (i.e. 30 June) as most recently released to ASX. Horizon is not aware of any new information or data that materially affects the information included in this presentation. All the material assumptions and technical parameters underpinning these estimates continue to apply and have not materially changed.
The estimates of petroleum reserves and resources contained in this statement are based on, and fairly represent, information and supporting documentation prepared by staff and independent consultants under the supervision of Mr Gavin Douglas, Subsurface Manager of Horizon Oil Limited. Mr Douglas is a full-time employee of Horizon Oil Limited and is a member of the American Association of Petroleum Geologists and the Society of Petroleum Engineers. Mr Douglas' qualifications include a Master of Reservoir Evaluation and Management from Heriot Watt University, UK and more than 23 years of relevant experience. Mr Douglas consents to the use of the petroleum reserves and resources estimates in the form and context in which it appears.
This presentation should be read in conjunction with the 2020 Reserves and Resources Statement, the Annual Financial Report for the year ended 30 June 2020, ASX Announcements and the Half Year Financial Report for the period ended 31 December 2020.
Authorisation
This ASX announcement is approved and authorised for release by the Horizon board.
FOR MORE INFORMATION PLEASE CONTACT US
CHRIS HODGE | Horizon Oil Limited |
P +61 2 9332 5000 | Level 6, 134 William Street |
info@horizonoil.com.au | Woolloomooloo NSW 2011 |
Australia | |
horizonoil.com.au |
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Disclaimer
Horizon Oil Limited published this content on 24 February 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 March 2021 15:54:03 UTC.
