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SDX Energy PlcHorizon Oil Limited ABN 51 009 799 455
Annual
Report
2019
Consistent growth in sales volumes for
5 consecutive years
Material increase in sales revenue
driven by record oil sales volumes
Accelerated debt reduction with
68% reduction in net debt in FY19
Greater production and revenue
diversification following acquisition of
additional Maari interest in 2018
Maintenance of low operating costs
driving record EBITDAX
RECO RD SALES VO LUME
1.87 mmbbls
RECORD SALES REVENUE
US$122 million
RECORD EBITDAX
US$93 million
13%
NET DEBT REDUC ED TO
US$28 million
68%
22%
UNDERLYING PROFI T
BEFORE TAX
US$37 million
97%
36%
2P RESERVES INCREASE
~95% reserves replacement
1.8mmbbls
Contents
2019 Highlights
Chairman and CEO's Report
Reserves and Resources Statement
Board of Directors
Consolidated Results
1
2
7
12
12
Activities Review
– Production
– Development and Pre-development
– Exploration
Annual Financial Report
13
14
18
20
21
Directors’ Report
Sustainability Report
Shareholder Information
Glossary
Company Directory
22
44
102
104
105
2019 Highlights
1
OIL SALES
(mmbbls)
Maari
Beibu
REVENUE1
(US$m)
EBITDAX
(US$m)
UNDERLYING PROFIT
BEFORE TAX (US$m)
Maari
Beibu
1 Net of hedge
settlements.
Cost recovery entitlement
1.38
1.21
0.90
0.93
1.65
0.31
0.86
1.42
0.30
0.80
1.87
0.29
1.00
104.0
70.5
76.0
35.5
0.29
0.47
0.32
0.48
0.58
33.4
40.5
122.4
80.1
100.0
68.9
42.3
31.2
68.5
52.2
16.4
89.1
93.0
68.5
54.0
45.2
37.3
18.9
8.7
2.2
(8.7)
FY15
FY16 FY17
FY18
FY19
FY15
FY16 FY17
FY18
FY19
FY15
FY16 FY17
FY18
FY19
FY15
FY17
FY18
FY19
FY16
“ Our strengthened balance sheet and
strong cashflow generation provides
increasing capacity to identify and secure
appropriate growth opportunities within
our focus region to complement our
existing oil production assets.”
Areas
of Operation
China
Block 22/12
(Production/Exploration)
26.95%/55%
Papua New Guinea
PDL 10 (Stanley)
PRL 21 (Elevala/Ketu)
PRL 28 (Ubuntu)
PRL 40 (Puk Puk/Douglas)
PPL 372
PPL 373
PPL 430*
PPL 574
30%
30.15%
30%
20%
95%
100%
100%
80%
* Licence PPL 430 expired post 30 June 2019.
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New Zealand
PMP 38160 (Maari/Manaia)
26%
2
Mike Harding
Chairman
Michael Sheridan
Chief Executive Officer
Chairman and Chief Executive
Officer’s Report
Dear Shareholders
2019 saw the continued realisation of Horizon Oil’s objectives of enhancing production, maintaining a low operating cost structure,
controlled capital investment and strengthening the company’s balance sheet. Our conventional oil production assets, which are now
largely ungeared, achieve average oil prices at or near dated Brent and have average operating costs less than US$20/bbl. They will
continue to generate material cashflow in future years and, with an increasingly strengthening balance sheet, favourably position
Horizon Oil for disciplined growth in our focus region of Asia Pacific.
Horizon Oil’s full year results demonstrate the
benefit of the Company’s low cost, conventional
oil production portfolio which delivered:
13% increase in oil sales to a record
1.87 million barrels
22% increase in net revenues to a record
US$122 million
Average operating costs below US$20/bbl
36% increase in EBITDAX to record US$93 million
97% increase in underlying profit before tax to
US$37 million
95% 2P oil reserves replacement
Delivering on objectives
We achieved solid performance in meeting or exceeding our core operating, financial and HSSE objectives for 2019. The
strengthened balance sheet, continuing improvement in operating performance and the organic reserve replacement have put the
Company in a solid position for 2020 and future years.
Importantly, we experienced no lost time injuries at Horizon Oil’s operated and non-operated joint ventures during the year, with
over 1 million man-hours worked across those projects. Pleasingly, there were no material spills to environment at any of Horizon
Oil’s operated or non-operated projects during the year.
Horizon Oil Annual Report 2019 CHAIRMAN AND CHIEF EXECUTIVE’S REPORT
3
Field management
Operating performance during the year
was strong with an overall 22% increase
in net production owing largely to active
field management and the benefit of a
full financial year’s production from the
additional 16% interest in Maari/Manaia
acquired in the second half of 2018.
In Block 22/12, China, our partner
CNOOC continued to achieve excellent
performance with underlying production
increasing 16% on the prior year to
1.0 million barrels net to Horizon Oil.
Drawing down an entitlement to just
under 300,000 barrels in additional cost
recovery oil, our resultant oil sales in Block
22/12 were 1.3 million barrels, generating
very strong margins with operating costs
below US$10/barrel sold.
The field performance was enhanced
early in the year with the drilling and
completion of the two infill wells on
the 12-8 West and 12-8 Mid fields, the
initial flow rates of which exceeded
expectations at 3,500 bopd.
At Maari/Manaia fields in New Zealand,
we enjoyed a further improvement on last
year’s strong result with a 33% increase
in our production entitlement to 600,000
bbls net to Horizon Oil.
The additional underlying production from
the 16% interest acquired in the second
half of 2018 was complemented by
increased water injection rates following
the successful conversion of the MR5 well
to a water injector in the first half of the
year, together with a series of production
optimisation activities.
The net increase of 1.8 mmbl to our 2P oil
reserves, which replaced the majority of
our 2019 oil sales, is largely the outcome
of the active field management programs
at Beibu Gulf and Maari/Manaia fields,
undertaken in conjunction with our
operators CNOOC and OMV. The key
contributing factors to the increase are
sustained production at levels above
earlier forecasts, planned improvements
to water handling capacity at Beibu Gulf
together with the benefit of additional
water injection and enhanced well data
gathering at Maari/Manaia.
The joint venture was sharply focused
during the year on cost reduction which,
together with the increased production
levels, reduced the operating cost per
barrel at Maari/Manaia to less than
US$25/bbl.
2019 saw the
operating cost per
barrel at Maari/
Manaia reduce to less
than US$25/bbl.
Horizon Oil Annual Report 2019
4
CHAIRMAN AND CHIEF EXECUTIVE’S REPORT
Development and pre-development assets
In China, development planning and final
contract negotiations continued in respect
of our WZ 12-8 East resource. At the same
time the joint venture continues to refine
our subsurface modelling for what is a
complementary but complex resource.
CNOOC continues to target first oil in early
2021 with a final decision anticipated later
this year.
Our assets in PNG constitute a large
stake in substantial condensate
rich gas resources on the pipeline
route of ExxonMobil, Oil Search and
Santos’ planned PNG LNG expansion
infrastructure.
The aggregate resource volumes of
Horizon Oil’s PNG licences are 2,200
PJ of gas and 64 million barrels of
condensate, of this 1,700 PJ of gas and all
the condensate are held in the northern
fields of Stanley, Elevala, Ketu and Ubuntu.
Horizon Oil operates the Elevala, Ketu and
Ubuntu fields. Our aggregate net interest
in those resources is approximately 30%.
Our core condensate rich gas resources
lie to the south of the P’nyang gas field,
which will provide the threshold volumes
for the PNG LNG expansion train. The
planned P’nyang to Kutubu gas and
condensate pipelines pass within 20 km of
our Ketu field.
Recognition of the potential value of the
PNG asset base may well occur as a result
of advancing the commercialisation of
the resources, progression of regional
development and ongoing corporate
activity in and around our asset base.
Both the current and previous
governments in PNG have made
clear the nation’s strategic objective
of ensuring third party access to the
strategic infrastructure associated with
LNG developments in the country. The
clear objectives are capital efficiencies,
expansion of national development
opportunities and greater availability
of domestic gas resources for existing
and prospective domestic industry.
The pathway to achieving these
national objectives exists in the current
legislative framework and the gas
(i.e. project) agreements negotiated
with the LNG developers at the start
of projects. Recently, there has been
considerable media attention in relation
to the Papua LNG project on the PNG’s
government’s focus on third party access
to infrastructure and greater domestic
market obligation in respect of gas
supply. These matters will continue to be
an area of attention as the P’nyang gas
agreement is negotiated.
Access to strategic infrastructure would
facilitate the prospect of Horizon Oil’s
gas resources being available to satisfy
the growing demand and increasing
calls in PNG for gas to be made available
for power and other onshore industrial
development, whether such development
serves an export or PNG domestic market,
by way of greater domestic market
obligations. The prospect of our material
resources directly or indirectly offsetting
the PNG LNG expansion project’s
domestic market obligations would
overcome the diminution of their resource
available for LNG production with our
surplus volumes available to meet their
future demands for gas feedstock.
Repsol, on behalf of the PDL 10 joint
venture, continued engagement with the
PNG Petroleum Minister in relation to
the correspondence received regarding
satisfaction of licence conditions. The
formal dispute resolution process which
the joint venture was compelled to initiate
under the terms of Stanley gas agreement
in November 2018 remains on foot while
the parties also endeavour to resolve the
matter directly.
Horizon Oil Annual Report 2019 CHAIRMAN AND CHIEF EXECUTIVE’S REPORT
5
Capital management
The strong free cashflow in 2019
facilitated the simplification of Horizon
Oil’s capital structure. During the year,
we entered into a new US$95 million
senior debt facility on substantially
improved terms, enabling the
consolidation and reduction of debt,
with funding costs reduced to LIBOR
+2.75%.
The improved financing structure and
free cashflow enabled a 68% reduction
of net debt to US$28 million at 30 June
2019, well ahead of previous forecasts,
and allows us to confidently predict
that we will be in a net cash position in
mid calendar 2020.
Horizon Oil maintains a prudent
approach to addressing its exposure
to oil price and foreign exchange
movements with the continued
application of our rolling hedging
program. At 30 June 2019, the
Company had oil price swaps in place
for 480,000 bbls out to 31 March
2020 at an average price of US$69.43,
inclusive of credit and other fees. This
secures revenue of approximately
US$33.3 million over the 9 month
period. We further mitigate risk by
acquiring loss of production insurance.
The improved financing structure and free
cashflow enabled a 68% reduction of net debt
to US$28 million at 30 June 2019, well ahead of
previous forecasts.
Board renewal
There was further renewal of the board
during 2019 with Mike Harding and Chris
Hodge joining as non-executive directors.
Mike assumed the role of chairman of
Horizon Oil at the 2018 annual general
meeting on John Humphrey’s retirement
from the Company’s board. Horizon Oil
has benefited greatly over many years
from John’s experience, pragmatism
and intellect. His contribution to the
Company’s growth and successful
navigation through challenging periods
has been material and his counsel
and collegiate approach have been
greatly appreciated by the board and
management.
Mike and Chris’ deep industry knowledge
and technical skills complement the
Company’s lean and experienced board.
Their addition provides the board with
the appropriate skills mix with board
members respective technical disciplines
covering sub-surface assessment,
engineering, operational and commercial
management, finance, legal and business
development.
Our small skilled complement of
personnel assists in maintaining low
general and administrative costs, which
include the insurance costs noted above.
The merit of the loss of production
insurance and other operational
insurances was demonstrated with the
insurance recoveries of approximately
US$5 million in respect of repairs in
2016 to the Maari/Manaia facilities. Most
of the reimbursement was received in
the 2019 financial year and resulted
from considerable commercial and
technical effort by Horizon Oil’s finance
and technical teams, achieving a good
outcome for the Company.
Horizon Oil Annual Report 2019
6
CHAIRMAN AND CHIEF EXECUTIVE’S REPORT
Sustainability
Outlook
Strong production and cashflow
providing pathway to growth
The Company’s very strong operating and
financial performance in 2019 has built
upon and extended the good results of
recent years.
We will continue to enhance production
levels at our oil fields in China and
New Zealand through the optimisation
activities, together with infill, appraisal
and exploration opportunities conducted
in-field or near-field. These activities will
serve to mitigate natural reservoir decline.
Average operating costs are expected
to remain below US$20/bbl in the near
term and we will continue our disciplined
approach to capital expenditure.
We continue to be encouraged by the
improved and sustained performance
at Maari/Manaia. Field management
activities underway or to be undertaken
in FY 2020 include well equipment
upgrades, workovers, production
optimisation following installation
of permanent multi-phase metering
and greater focus on water injection.
Furthermore, the strengthening technical
engagement amongst the joint venture
continues to generate good results.
The CNOOC-led joint venture is
currently undertaking a work program
which includes the workover of 3 wells,
installation of enhanced water handling
capacity, additional wells slots on the WZ
6-12 platform for proposed infill wells to
be drilled in calendar 2020 and a near
field appraisal well. If successful, the
associated resource could be tied back to
existing infrastructure.
Our balance sheet continues to
strengthen and we forecast many years of
production and strong cashflow ahead in
Block 22/12 and Maari/Manaia.
Our condensate and gas interests in
PNG present great opportunity for the
Company. Significant developments will
take place in coming years around our
PNG asset base and we anticipate the
composition of our joint ventures will
change in the near future. These matters
will have an impact on the manner and
timing of the commercialisation of our
PNG resources.
Finally, our strengthened balance sheet
and strong cashflow generation provides
increasing capacity to identify and
secure appropriate growth opportunities
within our focus region to complement
our existing oil production assets. We
will be disciplined in our assessment of
opportunities and the execution of any
associated transaction.
Our Sustainability Report in following
pages provides succinct coverage of the
Company’s performance and focus areas
in respect of safety, security, environment
and climate change, community and
people and governance.
Key highlights include:
Maintenance of strong safety and
health performance across our
operations
Enhancements to our information
technology systems to increase the
resilience of the business against
cyber security threats and loss of
business continuity
Our comprehensive program of
environmental baseline monitoring
showed no material environmental
impact from our activities in
PNG and there were no losses of
containment to the environment in
our production operations
We have implemented a governance
framework to assess and evaluate
material risks to our operations
arising from climate change. Our
reporting framework aligns with the
G20’s Task Force on Climate Related
Financial Disclosure (TCFD) and we
are progressively working towards
improved disclosures. Our high
level impact assessment of climate
related risks and opportunities for
our business over the short, medium
and longer term, is set out in the
Sustainability Report.
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Horizon Oil Limited ABN 51 009 799 455
2019 Reserves and
Resources Statement
as at 30 June 2019
Highlights
STRONG PERFORMANCE FROM PRODUCING CONVENTIONAL OIL
ASSETS IN CHINA AND NEW ZEALAND WITH NET PRODUCTION
INCREASED BY 22% TO 1.6 MMBBL AND AVERAGING 4,400 BOPD
NET TO HORIZON OIL
PROVED PLUS PROBABLE RESERVES (2P) OF OIL EQUAL TO
8.8 MMBBL AFTER REVISIONS TO PREVIOUS ESTIMATES OF
2.1 MMBBLS
FY19 PRODUCTION INCREASED FOLLOWING IMPROVED DATA
GATHERING, PRODUCTION OPTIMISATION ACTIVITIES AND
CONTINUOUS WATER INJECTION INTO THE MAARI MOKI RESERVOIR
IN NEW ZEALAND
WITH SOLID BASE PRODUCTION, HORIZON OIL CONTINUES TO
MATURE VALUE ACCRETIVE CONTINGENT PROJECTS ACROSS
CHINA AND NEW ZEALAND
7
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Horizon Oil Limited 2019
Reserves and Resources Statement
as at 30 June 2019
Proved and Proved plus Probable Reserves (Horizon Oil share)
CHINA
Block 22/12
NEW ZEALAND
PMP 38160
Closing Balance 30 June 2019
WZ 6-12 + WZ 12-8W
Maari + Manaia
Contingent Resources (Horizon Oil share)
CHINA
Block 22/12
NEW ZEALAND
PMP 38160
PAPUA NEW GUINEA
PDL 10
PRL 21
PRL 28
PRL 40
Closing Balance 30 June 2019
WZ 6-12 + WZ 12-8W + WZ 12-8E
Maari + Manaia
Stanley
Elevala-Ketu
Ubuntu
Puk Puk, Douglas, Weimang & Langia
2C
Total
Liquids
mmbbl
2.0
5.5
3.4
15.2
0.7
0.1
26.9
1P
Total
Liquids
mmbbl
2P
Total
Liquids
mmbbl
3.0
1.9
4.9
2C
Raw
Gas
bcf
-
-
123
351
14
111
599
4.4
4.4
8.8
2C
Sales
Gas
PJ
-
-
110
371
14
109
604
8
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Reconciliation of Proved and Proved plus Probable Reserves
PRODUCTION: strong net production of 1.6 mmbbl with a further 0.31 mmbbl of cost-recovery oil in China with
average daily production entitlement approximately 5,200 bopd net to Horizon Oil including adjustment for cost-
recovery barrels in China.
CHINA: upward revision of 1P reserves by 1.6 mmbbl and of 2P reserves of 1.4 mmbbl following review of actual
field performance, and acceleration of cost-recovery barrels due to continued strong production performance and
higher realised oil prices.
NEW ZEALAND: upward revisions of 1P reserves by 0.7 mmbl and of 2P reserves by 0.6 mmbbl following
improved data gathering, production optimisation activities and continuous water injection.
1 Cost recovery oil is reconciled as an Economic Interest Adjustment.
Proved and Proved plus Probable Reserves Reconciliation
Opening Balance 30 June 2018
Production (Net Working Interest)
Production (Cost Recovery oil entitlement)
Revisions of Previous Estimates
Economic Interest Adjustment
Closing Balance 30 June 2019
1P
Total
Liquids
mmbbl
4.8
(1.6)
(0.3)
2.3
(0.2)
4.9
2P
Total
Liquids
mmbbl
8.9
(1.6)
(0.3)
2.1
(0.3)
8.8
Reconciliation of Contingent Resources
CHINA: a reduction of 1 mmbbl associated with the WZ 12-8 East project following reassessment of oil recovery,
partially offset by maturation of infill wells in WZ 6-12 and the WZ 12-10-1 project.
NEW ZEALAND: an increase of 1.3 mmbbl associated with asset life extension and maturation of infill
opportunities in Maari and Manaia.
PAPUA NEW GUINEA: an increase of 99 PJ of sales gas and a decrease of 0.3 mmbbl condensate associated
with the acquisition of a 20% economic interest in PRL 40 and divestment of a 20% interest in PRL 28.
Contingent Resources Reconciliation
Opening Balance 30 June 2018
Revisions of Previous Estimates
Economic Interest Adjustment
Transfers, Discoveries and Extensions
Acquisitions and Divestments
Closing Balance 30 June 2019
2C
Total
Liquids
mmbbl
27.0
0.3
(0.3)
-
(0.3)
26.7
2C
Total
Raw Gas
bcf
2C
Total
Sales Gas
PJ
497
505
-
-
-
102
599
-
-
-
99
604
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10
HORIZON OIL LIMITED 2019 RESERVES AND RESOURCES STATEMENT as at 30 June 2019
Permits, Licences and Interests Held
Permit or License
Operator
Material Projects
Working Interest (%)
30 June 2019
30 June 2018
CHINA
Block 22/12
NEW ZEALAND
PMP 38160
PAPUA NEW GUINEA
PDL 10
PRL 21
PRL 28
PPL 574
PPL 430
PPL 372
PPL 373
PRL 40
CNOOC
WZ 6-12 North & South,
WZ 12-8 West & Mid fields
26.95%
26.95%
WZ 12-8 East field
55.00%1
55.00%1
OMV
Maari and Manaia fields
26.00%
26.00%
Repsol
Stanley field
Horizon Oil
Elevala-Ketu fields
Horizon Oil
Ubuntu field
Horizon Oil
Exploration activities
Horizon Oil
Exploration activities
Horizon Oil
Exploration activities
Horizon Oil
Exploration activities
Repsol
Puk Puk, Douglas,
Weimang and Langia fields
30.00%2
30.15%2,4
30.00%2
80.00%2
100.00%2,5
95.00%2,6
100.00%2,6
20.00%2,3
30.00%2
30.15%2,4
50.00%2
80.00%2
100.00%2
95.00%2
100.00%2
-
1
China National Offshore Oil Corporation (‘CNOOC’) is entitled to participate at up to a 51% equity level in any commercial development within
Block 22/12.
2
PNG government may appoint a state nominee to acquire up to a 22.5% participating interest in any commercial development within the PNG
licence areas.
3
On 6 November 2017, Horizon Oil (Papua) Limited, a wholly owned subsidiary of Horizon Oil Limited, entered into a sale and purchase agreement
with Kumul Petroleum Holdings (Kumul) to acquire a 20% interest in PRL 40 (Puk Puk, Douglas, Weimang and Langia fields) and divest of a 20%
interest in PRL 28. Consideration for the acquisition was in the form of an exchange. The transaction was completed on 30 April 2019.
The effective date of the sale and purchase was 31 May 2017.
4 The PRL 21 licensees have applied for a development licence. Tenure remains current, subject to PNG ministerial approval.
5 Subsequent to 30 June 2019, the PPL 430 licence term expired. The licence had no identified reserves or contingent resources at 30 June 2019.
6
The PPL 372 and 373 licensees have applied for an extension and variation of the licences. Tenure remains current, subject to PNG ministerial
approval. The licences had no identified reserves or contingent resources at 30 June 2019.
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HORIZON OIL LIMITED 2019 RESERVES AND RESOURCES STATEMENT as at 30 June 2019
11
Notes
1
2
3
4
5
6
7
8
9
All estimates are prepared in accordance with the
Society of Petroleum Engineers (SPE) Petroleum
Resources Management System (PRMS) revised
2007.
Relevant terms used in this statement, capitalised or
otherwise, have the same meaning given to those
terms in the SPE PRMS.
Reserves are those quantities of petroleum
anticipated to be commercially recoverable by
application of development projects to known
accumulations from a given date forward under
defined conditions.
Contingent Resources are those quantities of
petroleum estimated, as of a given date, to be
potentially recoverable from known accumulations
by application of development projects, but which
are not currently considered to be commercially
recoverable owing to one or more contingencies.
Contingent Resource estimates quoted for
China have assumed China National Offshore Oil
Corporation (‘CNOOC’) participation at 51%. CNOOC
is entitled to participate at up to a 51% equity level in
any commercial development within Block 22/12.
Contingent Resource estimates quoted for PNG
do not assume PNG State Nominee participation
at this time. The PNG government may appoint a
state nominee to acquire up to a 22.5% participating
interest in any commercial development within the
PNG licence areas.
Liquids are equal to the total of oil, condensate and
natural gas liquids where 1 barrel of condensate or
natural gas liquids equals 1 barrel of oil.
Raw Gas is natural gas as it is produced from the
reservoir which may include varying amounts of
heavier hydrocarbons which liquefy at atmospheric
conditions, water vapor and other non-hydrocarbon
gases such as hydrogen sulphide, carbon dioxide,
nitrogen or helium.
Sales Gas represents volumes that are likely to be
present in a saleable product. Sales Gas are reported
assuming average values for fuel, flare and shrinkage
considering the variable reservoir fluid properties
of each constituent field on an energy basis the
customary unit is PJ. PJ means petajoules and is
equal to one quadrillion joules.
10
11
12
13
14
Depending on the asset, either deterministic
estimates or probabilistic estimates have been used
to calculate the petroleum reserves, contingent
resources and prospective resources in this
statement.
Reported estimates of petroleum reserves and
contingent resources have been aggregated by
arithmetic summation by category.
Estimates are reported according to Horizon
Oil’s economic interest, this being Horizon Oil’s
net working interest as adjusted for entitlements
(Economic Interest Adjustment) under production-
sharing contracts and risked-service contracts; and
are reported net of royalties and lease fuel up to the
reference point. For New Zealand, the reference
point is defined as the outlet of the Raroa Floating
Production Storage and Offtake (FPSO) facility. For
China the reference point is the exit flange of the
loading hoses at Weizhou Terminal.
Horizon Oil employs a Reserves Management
System to ensure the veracity of data used in the
estimation process. This process includes review
by senior staff where data is endorsed for inclusion
in the estimating process. Estimates are reviewed
annually, at a minimum, with interim reviews as
required, to respond to any material changes.
Horizon Oil undertakes semi-regular external reviews
to complement its own internal process.
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 Andrew
McArdle, Chief Operating Officer of Horizon Oil
Limited. Mr McArdle is a full-time employee of
Horizon Oil Limited and is a member of the Society
of Petroleum Engineers. Mr McArdle’s qualifications
include a Master of Engineering from the University
of Western Australia, Australia and more than 15
years of relevant experience. Mr McArdle consents
to the use of the petroleum reserves and resources
estimates in the form and context in which they
appear in this statement.
15
Some totals in the tables may not add due to
rounding.
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Board of Directors
Mike Harding
Chairman
Michael Sheridan
Chief Executive Officer
Gerrit de Nys
Director
Sandra Birkensleigh
Director
Gregory Bittar
Director
Chris Hodge
Director
Consolidated Results
Revenue from continuing operations
Cost of sales (includes amortisation)
Gross profit
Other income
General and administrative expenses
Exploration and development expenses
Impairment of non-current assets
Financing costs (includes project facility and convertible bonds)
Financing costs (unrealised movements in value of options)
Unrealised movement in value of convertible bond conversion rights
Gain on buyback of convertible bonds during the period
Other expenses
Profit/(loss) before income tax expense
Net tax (expense)/benefit
Profit/(loss) for the financial year
Profit/(loss) attributable to members of Horizon Oil Limited
2019
US$’000
2018
US$’000
2017
US$’000
2016
US$’000
2015
US$’000
122,401
(67,354)
55,047
4,427
(5,661)
(4,592)
-
(11,748)
11,157
-
-
(221)
48,409
(12,583)
35,826
35,826
100,044
68,534
75,952
103,950
(55,686)
(43,768)
(60,179)
(59,970)
44,358
24,766
15,773
43,980
835
(5,985)
(5,761)
-
(14,345)
(20,464)
-
-
(218)
(1,580)
(1,019)
(2,599)
(2,599)
15
3,638
(6,440)
(1,250)
(8,094)
(1,852)
6,842
(7,569)
(16,222)
-
(147,515)
-
(14,481)
(17,264)
(17,360)
1,400
530
-
(386)
4,154
-
5,322
1,193
(927)
(149,726)
(4,490)
5,201
(336)
(336)
(144,525)
(144,525)
-
9,063
-
(983)
17,751
556
18,307
18,307
12
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Activities
Review 2019
Production
Development
and Pre-development
Exploration
China
Papua New Guinea
Papua New Guinea
Block 22/12 Beibu Gulf
Western Province PNG
Western Province PNG
Horizon Oil Interest
Horizon Oil Interest
Horizon Oil Interest
Production
Exploration
26.95%
PDL 10, Stanley Field
30%
PPL 574
55%
PRL 21, Elevala and Ketu Fields
30.15%*
PPL 430
PRL 28, Ubuntu Field
30%*
PPL 372
PRL 40, Puk Puk/Douglas Fields
20%
PPL 373
* Operator
* Operator
New Zealand
PMP 38160, Maari and Manaia
fields, offshore Taranaki Basin
Horizon Oil Interest
Production
26%
80%*
100%*
95%*
100%*
13
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14
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China
BEIBU GULF
Block 22/12 Beibu Gulf
Production
Exploration
Horizon Oil
Interest
26.95%
55%
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During the year, the Group’s crude oil sales
from the Beibu Gulf fields increased by 10%
to 1,290,632 barrels at an average price
of US$66.31/bbl, exclusive of executed
hedging. Sales volumes were composed of
working interest share of production totalling
1,002,178 barrels, and 288,454 barrels of
cost recovery oil. The Group’s share of sales
volumes over the year was an average of
3,536 bopd. Average production over the
year was 10,188 bopd, of which the Group’s
working interest share was 2,746 bopd.
February 2019
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N
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H
i
Pip elin es to W eizh o u T er m in al
MR9
MR6A
N
5km
(26.95%)
MR1
MR2
MR7A
MR4
MR8A
MR3
MR5
(26.95%)
MR10
6-12
Production
Area
Beibu Gulf
MN1
PAPUA NEW GUINEA
Wellington
Tasman Sea
WZ 12-1
Map Area
NEW
ZEALAND
Auckland
100km
Map Area
Tasman
Sea
500km
Legend
Legend
Producing Oil Field
Oil Field
Discovered Oil Field
Development Area
Legend
Production Area
i
l
Legend
H
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Producing Oil Field
i
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o
Discovered Oil Field
n
O
Development Area
A
n
Production Area
n
u
Oil Pipeline
a
R
Gas Pipeline
e
p
o
Proposed 12-8E flowline
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l
Oil Pipeline
Gas Pipeline
Proposed 12-8E flowline
Oil Field
Oil Producer
Water Injector
Horizon Oil
Petroleum Licence
Oil Producer
12-8
Water Injector
Production Area
Horizon Oil
Petroleum Licence
(26.95%)
N
2km
Producing Oil Field
Discovered Oil Field
Development Area
Production Area
Oil Pipeline
Gas Pipeline
Proposed 12-8E flowline
Legend
Oil Field
Gas Field
PMP 38160
(26%)
WZ 12-3
WZ 12-10-1
WZ 12-8W WHP
Oil Pipeline
MANAIA
Proposed Oil Pipeline
Gas Pipeline
Proposed Gas Pipeline
Rivers
Township
(26.95%)
Horizon Oil Prospecting Licences
Horizon Oil Development/
Retention Licences
N
50km
Wewak
Map Area
Madang
Proposed
WZ 12-8E WHP
Oil
Pipeline
Lae
Daru
Gas
Pipeline
Port Moresby
500km
Gulf of Papua
Block 22/12
12-8 Development Area
WZ 6-12SWZ 6-12NBlock 22/12WZ 12-8EWZ 12-8MWZ 12-8W
China
10% increase in oil sales to 1.3 mmbo with
underlying production increasing 16%
Beibu Gulf operating costs
remained below US$10/bbl
16%
UNDERLYING PRODUCTION
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