Horizon Oil Hits Record Production and Boosts Reserves After Cue Acquisition

Record Production and Reserves Expansion

Horizon Oil Limited (ASX:HZN) has reported a milestone with record FY26 net production reaching 2.15 million barrels of oil equivalent (MMboe), a 51% increase from the prior year. This surge reflects the strategic acquisition of Cue Energy Resources, completed in July 2026, which lifted Horizon’s current production to approximately 7,300 barrels of oil equivalent per day (boepd). The acquisition also boosted Horizon’s 2P reserves to 13.61 MMboe and 2C contingent resources to 19.81 MMboe, significantly expanding its asset base across the Asia-Pacific region.

The company’s diversified portfolio spans nine producing assets across five countries; Thailand, Indonesia, Australia, New Zealand and China; with interests ranging from offshore oil projects to domestic gas fields. This breadth supports Horizon’s low-cost, reliable production profile and underpins its strong cash generation credentials.

Robust Cash Flow and Disciplined Capital Allocation

FY26 underlying revenue is estimated at around US$105 million, supported by stable oil production and long-term gas sales agreements, particularly in Thailand where gas pricing is linked to high sulphur fuel oil (HSFO). Horizon’s EBITDAX for the year is approximately US$100-110 million, reflecting disciplined cost control and operational efficiency.

The company maintained a conservative capital management approach, paying a US$17 million interim dividend in April and reducing debt in the final quarter of FY26. Cash reserves stood at US$37.4 million as of 30 June 2026, positioning Horizon well for upcoming investment opportunities while continuing to prioritise shareholder returns. Over the past six years, Horizon has distributed more than AUD 270 million to shareholders.

Near-Term Development and Growth Pipeline

Horizon’s near-term value runway is anchored by multiple infrastructure-led projects and drilling programs scheduled through 2028. In Thailand, the Nam Phong and Sinphuhorm gas fields are set for production enhancements via booster compressors, infill drilling, and tie-ins to Pad D, with potential concession extensions under active negotiation.

Indonesia’s Mahato PSC is undergoing low-risk infill drilling with two wells approved and a high-impact exploration well planned for late 2026. Meanwhile, the Sampang PSC is optimising gas production with a booster compressor ahead of Cue’s planned exit at the PSC’s expiry in December 2027.

Australia’s Amadeus Basin assets; Mereenie, Palm Valley and Dingo; continue to provide stable domestic gas supply with ongoing appraisal drilling and development reviews. The Palm Valley PV14 appraisal well was spudded in July 2026, aiming to bolster gas resources supporting contracted supply through 2034.

In New Zealand, the mature Maari offshore oil project contributes steady cash flow, with recent permit extensions through 2037 and workover programs designed to sustain production. The Block 22/12 oil project in China remains a core offshore asset with ongoing facility upgrades and targeted workovers to optimise output.

Strategic Outlook and Operational Resilience

Horizon’s lean management model leverages strong in-country partnerships and hands-on oversight, enabling effective capital allocation and operational discipline across its multi-jurisdictional portfolio. The company emphasises organic growth opportunities through appraisal, infill, and exploration wells, supported by established infrastructure that reduces execution risks.

While the FY26 financials are unaudited and exclude a full-year contribution from Cue, Horizon’s expanded asset base and robust cash flow provide a solid platform for sustainable production and value creation. The company’s focus on shareholder returns, coupled with a material reserves and resource base, positions it well to navigate market uncertainties and capitalise on emerging growth prospects.