Horizon Oil achieved record production and sales in FY26, driven by its Thailand assets, and completed the off-market takeover of Cue Energy, expanding its footprint across five countries.
- FY26 production up 33% to 2.15 MMboe excluding Cue
- Off-market Cue takeover completed with 57% stake
- Net operating cash flow hits US$63.3 million for FY26
- Thailand assets deliver strong cash flow with oil-linked gas pricing
- Cue acquisition adds near-term development and exploration opportunities
Record FY26 Production Driven by Thailand Acquisition
Horizon Oil (ASX:HZN) closed FY26 with a bang, reporting record production of 2.15 million barrels of oil equivalent (MMboe), a 33% increase on FY25. This surge was primarily propelled by the August 2025 acquisition of assets in Thailand, notably Sinphuhorm and Nam Phong, which have rapidly become low-cost, material contributors to the group’s cash flow. Quarterly production held steady at around 542,000 boe, while sales volumes jumped 22% to nearly 2 million boe for the year.
Revenue for the quarter rose to US$34.7 million (net of hedging), supported by higher oil prices and sales volumes, translating into robust net operating cash flow of US$23.6 million. Horizon’s disciplined cost control and hedging strategy, which currently covers 180,000 barrels at an average of US$77 per barrel through December 2026, helped underpin this strong cash flow despite some hedge losses realised during the period.
Cue Energy Takeover Expands Scale and Geographic Reach
On 2 July 2026, Horizon completed its off-market takeover of Cue Energy Resources Limited, securing a controlling interest of 57.03%. This acquisition immediately boosts Horizon’s production by approximately 15% to around 7,300 barrels of oil equivalent per day (boepd) net, and increases its 2P reserves by more than 20% to about 15.36 MMboe. The Cue portfolio adds valuable near-term development, appraisal, and exploration opportunities across Australia and Indonesia, including assets at Palm Valley, Mahato, and Sampang.
Importantly, Horizon’s record FY26 results were achieved before Cue’s contribution, providing a solid platform for growth in FY27. The enlarged group now operates across five countries, Australia, New Zealand, China, Thailand, and Indonesia, with a diversified pipeline of projects.
Operational Highlights Across Key Assets
In China’s Beibu Gulf, gross oil production rose 3.8% quarter-on-quarter to average 6,724 barrels per day (bopd), with net oil sales generating US$17.7 million in revenue. Well optimisation and water injection programs have supported stable reservoir pressure and production.
New Zealand’s Maari field saw an 11% production increase following a successful workover, although a downhole pump failure temporarily halted output from one well. Cash operating costs averaged US$30 per barrel, with offtake volumes of 117,813 barrels net to Horizon.
At Australia’s Mereenie gas field, production dipped 7% due to planned maintenance but revenue remained steady at US$4.5 million, supported by strong contract gas pricing averaging A$10.55/GJ. Subsurface studies and development planning continue to explore future growth opportunities.
Thailand’s Sinphuhorm and Nam Phong fields delivered steady production and increased revenue by nearly 18% to US$7.3 million, buoyed by oil-linked gas pricing. Production enhancement initiatives are underway, including compressor installations and new well pad construction, with first gas from new developments expected as early as Q3 FY27.
Cue Assets Add Development Momentum
Cue’s Palm Valley gas field in Australia remains stable, with ongoing drilling of appraisal wells PV 14 and PV 15 aimed at expanding gas resources and supporting long-term supply contracts. Drilling commenced on PV 14 in late July, with first gas anticipated by October 2026.
In Indonesia, Cue’s Mahato PSC continues production from the PB oil field, with two new infill wells approved for drilling. The operator expects government approval for the OPL 3 development plan in early FY27, and exploration drilling at GA-1 is planned for later in the year. Meanwhile, production from the mature Oyong and Wortel gas fields in the Sampang PSC is declining, with a new compressor installation expected to improve output in early FY27. Cue has signalled it will not participate in Sampang beyond contract expiry in December 2027.
Financial Position and Capital Allocation
Horizon ended the quarter with cash reserves of US$37.4 million after repaying approximately US$8 million in debt and paying a US$17 million interim dividend in April. The company also settled US$13 million in cash acquisition costs related to Cue. Net debt stood at US$11.3 million as at 30 June 2026.
Capital expenditure during the quarter was focused on development projects across the portfolio, including well workovers, field optimisation, and infrastructure upgrades. Total capital spend was US$1.24 million for the quarter and US$4.78 million for FY26.
CEO Richard Beament highlighted the strategic importance of Horizon’s geographic diversification and disciplined capital management amid ongoing global energy market volatility. The company’s focus remains on safe operations, financial discipline, and advancing high-return projects to build a stronger regional energy business.
Bottom Line?
With Cue now consolidated, Horizon Oil’s FY27 will test how effectively it leverages its expanded portfolio amid volatile commodity markets and ongoing development challenges.
Questions in the middle?
- How quickly will Cue’s assets contribute materially to Horizon’s cash flow and reserves?
- What impact will ongoing maintenance and equipment issues have on production stability at key fields like Maari?
- Will Horizon’s development projects in Thailand and Indonesia meet their targeted timelines and production uplift?