Horizon Oil Boosts Production 15% with Mereenie Infill Success

Mereenie Infill Drilling Drives Production Gains

Horizon Oil Limited’s quarterly report for the period ending 31 December 2024 highlights a pivotal operational success at its Mereenie gas field in the Northern Territory. The recently completed WM29 infill well commenced production in January 2025, delivering initial test rates that exceeded pre-drill expectations. This well has contributed to a more than 15% increase in Mereenie’s gross gas production, lifting output to approximately 30 terajoules per day (TJ/d).

The timing of this production boost is particularly advantageous, as the additional gas volumes are being sold into the tight Northern Territory domestic market under newly signed gas sales agreements, including a key contract with the NT Government effective from January 2025. The success of WM29 also bodes well for the ongoing WM30 well, which is currently drilling and expected to come online by late February 2025, promising further production enhancements.

Steady Production Across Portfolio and Financial Strength

Beyond Mereenie, Horizon’s other assets maintained steady performance during the quarter. Total production across all fields reached 411,687 barrels of oil equivalent (boe), with Maari and Mereenie offsetting declines at Block 22/12 in the Beibu Gulf, offshore China. The latter experienced some unplanned downtime and is undergoing workover programs to restore and optimize output.

Financially, the company reported quarterly revenue of US$26.5 million, inclusive of hedge settlements, and net operating cash flow of US$16.5 million. Despite paying a final FY24 dividend of AUD 1.5 cents per share in October, Horizon ended the quarter with cash reserves of US$47.3 million and a net cash position of US$22.5 million, underscoring a robust balance sheet.

Operational Outlook and Strategic Focus

Horizon’s CEO Richard Beament emphasized the strategic value of the Mereenie acquisition and the accretive nature of infill wells like WM29. The company is actively pursuing further infill and appraisal drilling opportunities across its portfolio, with plans for additional wells and infrastructure upgrades, including a water handling capacity enhancement at Block 22/12.

Workover activities remain a key focus, particularly at Block 22/12 where a multi-well program aims to replace downhole pumps and unlock incremental production through targeted perforation and water injection strategies. Meanwhile, Maari’s production remains robust, with recent well restarts contributing to the highest monthly output since September 2023.

Looking ahead, Horizon’s sustained high oil prices and disciplined capital management position the company well to continue delivering shareholder value while navigating the evolving energy market landscape.