Horizon Oil’s Production Jumps 37% After Thailand Deal; Maari Permit Extended
Horizon Oil’s recent acquisition of Thai gas assets and a decade-long permit extension at Maari have propelled production and reserves, underpinning a strong financial quarter and sustained shareholder returns.
- 37% production increase driven by Thailand acquisition
- Maari permit extended by 10 years to 2037
- Final FY25 dividend paid, cumulative distributions exceed AUD 250 million
- Net operating cash flow up 21.9% to US$17 million
- Cash operating costs reduced below US$20/boe aided by low-cost Thailand assets
A Transformative Quarter for Horizon Oil
Horizon Oil Limited has delivered a standout first quarter for fiscal year 2026, marked by a strategic acquisition in Thailand and a significant regulatory win in New Zealand. The company’s purchase of a majority stake in two Thai gas fields has not only expanded its reserves by nearly 4 million barrels of oil equivalent but also boosted production volumes by 37% compared to the previous quarter. This surge, combined with robust output from legacy assets, has driven a 19.2% increase in production revenue to US$26.7 million.
Simultaneously, Horizon secured a ten-year extension of its Maari permit offshore New Zealand, pushing the operational horizon to 2037. This extension provides a stable platform for long-term planning and decommissioning strategies, reinforcing the company’s commitment to sustainable asset management.
Financial Strength and Shareholder Returns
The company’s financial health remains solid, with net operating cash flow rising 21.9% to US$17 million and cash operating costs falling below US$20 per barrel of oil equivalent, thanks in part to the low-cost profile of the newly acquired Thai assets. Horizon’s disciplined capital management enabled the payment of a final FY25 dividend of AUD 1.5 cents per share, pushing cumulative distributions over the past five years beyond AUD 250 million.
To fund the Thailand acquisition, Horizon secured a US$21 million debt facility with Macquarie Bank, maintaining a modest net debt position of US$2 million at quarter’s end. The company also benefits from a robust commodity hedge program, covering 140,000 barrels at an average price of approximately US$67 per barrel through March 2026, mitigating near-term price volatility risks.
Operational Resilience Amid Challenges
Operationally, Horizon demonstrated resilience despite weather disruptions, including multiple typhoons affecting offshore China and New Zealand assets. Workover campaigns and optimisation initiatives have restored and enhanced production rates, with notable success in the Maari and Block 22/12 fields. The integration of the Thai assets has been seamless, with joint venture partners Matahio and PTTEP collaborating closely to unlock growth opportunities and maximise production potential.
Looking ahead, Horizon is advancing development plans such as new well tie-ins and exploration drilling in Thailand, aiming to sustain gas supply to local power plants and extend field life. The company forecasts a payback period on the Thailand investment within 24 months, contingent on commodity prices, underscoring the economic rationale behind the acquisition.
Strategic Outlook
Horizon Oil’s recent achievements position it well for sustained cash flow generation and shareholder value creation. The combination of expanded reserves, permit security, and operational efficiency provides a strong foundation for growth. However, the company remains mindful of commodity price fluctuations and operational risks inherent in the oil and gas sector.
Bottom Line?
Horizon Oil’s strategic moves in Thailand and New Zealand set the stage for resilient growth, but market and operational dynamics will be key to watch.
Questions in the middle?
- How will commodity price volatility impact Horizon’s forecasted payback timeline for the Thailand acquisition?
- What are the specific growth initiatives planned for the Thai assets and their expected timelines?
- How will the extended Maari permit influence Horizon’s long-term decommissioning and capital expenditure plans?
