Horizon Oil Limited · ASX:HZN
Horizon Oil — Shareholder Meeting (November 2008)
39 slides from Horizon Oil's shareholder meeting presentation, Nov 27, 2008
Slide 1: Chairman's Address 2008 HZN AGM
CHAIRMAN’S ADDRESS 2008 HZN AGM Ladies and Gentlemen: 1. Introduction Again – a warm welcome to all shareholders and invited guests, though I appreciate that the atmosphere here today may not be as warm and positive as we had expected it to be when we last met this time last year – we had in fact ex
Slide 2: 2008 Performance Scorecard
- our Performance Scorecard for the year since last year’s AGM; - financing of our activities especially in the light of delays in cash inflows from Maari; - some comments on the outlook 2. 2008 Performance Scorecard Consistent with past practice, at last year’s AGM we presented our management prior
Slide 3: Brent Emmett will deal with the operational specifics in his presentation later. Some brief
Brent Emmett will deal with the operational specifics in his presentation later. Some brief comments are:- -3-
Slide 4: Scorecard: Maari, Block 22/12, PNG
Maari Project (3/5) This would have been a 5/5 score except for the weather induced delay to the start of development drilling. Block 22/12 (2/5) Delays have been frustrating, but better progress is now being achieved. PNG – PRLs 4 & 5 (4/5) Change of project concept from (initially) a modest gas pr
Slide 5: Share price performance
Maintain share price in fair valuation range (2/5) The table below compares the share price performance of the Company with that of the ASX Small Resources Index and the ASX 200 Energy Index over the last five years. Horizon Oil Share Price Performance vs ASX Small Resources Index and ASX 200 Energy
Slide 6: Financing
Since the second quarter of 2008, like many other companies, Horizon Oil’s share price has been affected by the falling commodity price and external market forces. The good results in PNG provided little apparent support against general market conditions. In fact, until these widespread share price
Slide 7: Financing plans to Q3 2009
opportunities to follow Maari (namely Block 22/12, offshore China) and Stanley in PNG. Ongoing, modest general and administrative costs are also being incurred. The Gulf of Thailand drilling program is expected to start in February 2009, with expected first cash inflows from Maari in the second quar
Slide 8: Outlook
qualified to take account of the substantial risks and challenges associated with the upstream oil and gas industry. The last few months have been particularly challenging for the Horizon Oil team, with the risks and frustrations arising from delays having to be dealt with. The board highly commends
Slide 9: Outlook conclusion
In the meantime, even at current oil prices, forecast returns to Horizon Oil shareholders from the Company’s Maari project and potential projects, Block 22/12 and Stanley, remain robust. The board is determined not to over-react to the current global financial crisis. Rather, we will modify our plan
Slide 10: Horizon Oil Limited Annual General Meeting
HORIZON OIL LIMITED ABN 51 009 799 455 Annual General Meeting 27 November 2008 This presentation contains some references to forward looking assumptions, representations, estimates and outcomes. These are uncertain by the nature of the business and no assurance can be given by Horizon Oil Limited th
Slide 11: Chairman's Address
HORIZON OIL LIMITED ABN 51 009 799 455 Annual General Meeting Chairman’s Address 27 November 2008 This presentation contains some references to forward looking assumptions, representations, estimates and outcomes. These are uncertain by the nature of the business and no assurance can be given by Hor
Slide 12: Management Priorities 2008 (1)
Management Priorities 2008 (1) Management Priorities 2008 Outcome / Status (as presented at 2007 AGM) Finalise Maari construction and installation phases and Construction and installation complete. First oil begin production delayed to February 2009 by weather 3 Finalise FEED on Wei 6-12 in Block 22
Slide 13: Management Priorities 2008 (2)
Management Priorities 2008 (2) Management Priorities 2008 Rating Outcome / Status out of 5 (as presented at 2007 AGM) Investigate and, if justified, acquire pre-development Interests in PRLs 4 and 5 significantly increased at opportunities commercially attractive prices 5 Add exploration acreage Acq
Slide 14: Share Price Performance
Share Price Performance Horizon Oil Share Price Performance vs ASX Small Resources Index and ASX 200 Energy Index $0.50 60,000 Block 22/12 Stanley discovery Block 22/12 flow test drilling $0.40 50,000 $0.30 40,000 Price (A$) Maari FID Volume (000's) $0.20 30,000 $0.10 20,000 $0.00 10,000 -$0.10 0 No
Slide 15: Horizon Oil Limited Annual General Meeting
HORIZON OIL LIMITED ABN 51 009 799 455 Annual General Meeting 27 November 2008 This presentation contains some references to forward looking assumptions, representations, estimates and outcomes. These are uncertain by the nature of the business and no assurance can be given by Horizon Oil Limited th
Slide 16: Shareholder Presentation
HORIZON OIL LIMITED ABN 51 009 799 455 Annual General Meeting 27 November 2008 Shareholder Presentation This presentation contains some references to forward looking assumptions, representations, estimates and outcomes. These are uncertain by the nature of the business and no assurance can be given
Slide 17: Oil Supply Costs
Hs Oil Supply Costs Horizon Oj] 120 ~\'\'s Based on Estimates Other South America and North America iad [7] Based on Field Models Canadian Oil Sands Nigeria Deep Wate \ a i rN Range of Marginal Full Cycle Costs us mie Mexico Deep Water Brazil Deep Wat Mexico UK North Sea Pee Libya MY reece anaes - X
Slide 18: Asset Location – Focus on SE Asia
Asset Location – Focus on SE Asia Productive fairways, mature operating environment … …strong demand for oil and gas
Slide 19: Asset Portfolio
Asset Portfolio Exploration Appraisal Development New Zealand New Zealand New Zealand 25% of PEP 38494 (5,341 sq 10% of PEP 38413; Manaia oil 10% of PMP 38160; Maari km); Matariki, Paua and Pike discovery; adjacent structure field; first oil early 2009 prospects; south extension to Maari of Maari Gu
Slide 20: Reserves, Resources and Exploration Potential
Reserves, Resources and Exploration Potential Net recoverable in millions of barrels of oil equivalent
Slide 21: Net Production Forecast
Net Production Forecast Maari on production in early 2009… …generating US$7 million per month EBITDA net to HZN at US$75 oil
Slide 22: Horizon Oil Valuation
Horizon Oil Valuation Analyst coverage and recent 12 month share price targets A$ ABN AMRO Morgans 0.40 Euroz 0.40 Patersons 0.60 Wilson HTM 0.29 Bell Potter 0.62 Consensus value of HZN share of Maari: US$149 million Consensus value of HZN share of Block 22/12: US$109 million Papua New Guinea: What
Slide 23: Maari Development – New Zealand
Maari Development – New Zealand Installation nearing completion of a 56 mmbo oilfield… Joint Venture: HZN 10% OMV 69% (Op) Todd 16% CUE 5% …with 40 mmbo upside potential
Slide 24: Maari Development Concept
We Maari Development Concept Horizon Oil > FPSO - Raroa WHP - Tiro Tiro Moana 7 JU - MODU.-- Ensco 107
Slide 25: Maari Development Summary
Maari Development Summary First oil February 2009, building to 3,500 bopd net to HZN Overall development concept:– 5 production / 3 injection horizontal wells with wellhead platform (WHP) / FPSO production facilities FID capex budget US$365 million (including contingency). Current forecast cost to c
Slide 26: Maari Reserves and Upside Potential
Maari Reserves and Upside Potential Zone Gross 2P reserves Net 2P reserves (mmbo) (mmbo) Maari Moki 56 6 Gross unrisked mean Net unrisked mean resource potential resource potential (mmbo) (mmbo) Maari M2A Sands 12 1 Manaia 25 3 Total 93 10
Slide 27: Maari Fabrication and Loadout
MAARI Fabrication and Loadout
Slide 28: Maari Field Operating Cashflow
Maari Field Operating Cashflow Plateau EBITDA net to HZN at US$50 oil: US$4.5 million per month at US$75 oil: US$7 million per month Cumulative production after 2 years of 20 mmbo, generating EBITDA net to HZN at US$50 oil: US$81 million at US$75 oil: US$131 million Cumulative production after 4 yea
Slide 29: China 22/12 – Discoveries and Prospects
China 22/12 – Discoveries and Prospects 60+ mmbo recoverable reserves and resources discovered... Joint Venture: HZN 30% ROC 40% (Op) Petsec 25% FAR 5% …development planning underway
Slide 30: Block 22/12 Development Planning
Block 22/12 Development Planning Phased development concept Wellhead platform at Wei 6-12S location, tied back to CNOOC Wei 12-1 processing platform Unmanned minimal structures at Wei 12-8W and Wei 12-8E progressively tied back to Wei 12-1 platform FEED underway; FID Q1 2009; construction 2009/10; o
Slide 31: Phased Development Concept
Ws Phased Development Conce WEI 12-2 Ol Fieki Oa Discovery Gas Field Olland Gas Discovery Ol Prospect Dry Hole Oil Pipeline Fault Proposed Ol Pipeline J Horizon Oil Petroleum Licence t Wish 104% © Washi 130-1 WEI 6-12 nee Mog “> Wei 6126-44 ‘8° WEI 6-12 SOUTH WE! 12-8 EAST
Slide 32: Papua New Guinea
Papua New Guinea Possible recoverable resources of 1 tcf gas and 40 mmb condensate… …development options emerging
Slide 33: Western Province Play – Papua New Guinea
Western Province Play – Papua New Guinea Interests significantly increased from original 7.25% holding with buyouts of Austral Pacific (US$3.5 million) and InterOil (US$6.5 million), resulting in:- • 100% interest in PRL 4 (Stanley gas / condensate discovery) • 49.65% interest in PRL 5 (Elevala and
Slide 34: Gulf of Thailand – Acreage Position
Gulf of Thailand – Acreage Position Partner and operator: Pearl Energy HZN interests: G1/48: 20% 2 wells G3/48: 20% 1 well G6/48: 20% 3 wells G10/48: 25% 5 wells G11/48: 25% 4 wells
Slide 35: Gulf of Thailand Prospects and Leads Inventory
Gulf of Thailand Prospects and Leads Inventory Block Area HZN Unrisked recoverable oil / Exploration wells interest gas potential (sq km) (%) Gross Net 2009 2010 (mmbo/bcf) (mmbo/bcf) G1/48 17,610 20 70 14 1 1 G3/48 11,800 20 40 8 1 G6/48 2,280 20 105 21 1 2 G10/48 18,780 25 163 41 3+2 G11/48 13,600
Slide 36: Investment Highlights
Investment Highlights Reserves and resources Strong position-: 15 mmbo 2P reserves (all oil) and resources of 25 mmbo + 500 bcf gas New Zealand Maari first oil in early 2009, building to 3,500 bopd net to HZN; generates US$7 million per month net cash flow before interest and tax at US$75 per barrel
Slide 37: Management Priorities 2009
Management Priorities 2009 Begin production on Maari field and ramp up to plateau rate of 35,000 bopd by Q3 2009 Appraise Manaia discovery, southwest of Maari Make FID on Block 22/12 development in Q1 2009 and begin construction phase Finalise award of Petroleum Development Licence for Stanley field
Slide 38: Activity Schedule
ME Activity Schedule i Horizon Oil [rask Name {Exploration Drilling 2009 2010 AM oJ oJ AS O N D J F M AM J oJ AS O N DO J F OM AM J oJ A S O N D J F OM Block 22/12, China (2 wells) Block G1/48, Thailand (2 wells) —— Block G3/48, Thailand (1 well) Block G6/48, Thailand (3 wells) Block G10/48, Thailan
Slide 39: Please visit the Horizon Oil website
Please visit the Horizon Oil website www.horizonoil.com.au to see:- Detailed Investor Presentation Latest Quarterly Report Analyst reports on HZN Level 7, 134 William St, Woolloomooloo NSW 2011 Tel: +612 9332 5000 Fax: +612 9335 5050 exploration@horizonoil.com.au