Horizon Oil Limited · ASX:HZN
Horizon Oil — Shareholder Meeting (November 2009)
41 slides from Horizon Oil's shareholder meeting presentation, Nov 20, 2009
Slide 1: Horizon Oil Annual General Meeting Presentation
For personal use only 20 November 2009 The Manager, Company Announcements Australian Stock Exchange Limited Exchange Centre 20 Bridge Street Sydney NSW 2000 HORIZON OIL (HZN) ANNUAL GENERAL MEETING PRESENTATION 20 NOVEMBER 2009 Please find attached the presentation to be made today at Horizon Oil’s
Slide 2: Chairman's Address: Introduction
CHAIRMAN’S ADDRESS 2009 HZN AGM Ladies and Gentlemen: 1. INTRODUCTION For personal use only Again – a warm welcome to all shareholders and invited guests. I hasten to add that in contrast to last year’s AGM it is both a great pleasure (and relief!) to meet against the background of a less uncertain
Slide 3: 2009 Management Priorities
• the share price and how that relates to our view of the future value of Horizon Oil shares; • the Company’s current financial position, funding requirements and likely sources of these funds; For personal use only • the outlook, including comments on oil and gas markets. 2. 2009 MANAGEMENT PRIORIT
Slide 4: Defer commitments and Maari production
(1) Defer / minimize 2009 commitments to conserve cash In light of these changed circumstances, our first priority was to minimize or defer 2009 expenditures, without prejudicing near term development opportunities. The For personal use only main actions were:- • withdrawal from the US$30 million Gu
Slide 5: Manaia appraisal and financial response
(3) Appraisal of the Manaia discovery and the Maari M2A reservoir • The Manaia-1 (“MN1”) appraisal / development well was successfully completed as an oil producer. At this stage there has been no revision to For personal use only pre-drill oil-in-place estimates of 50 – 60 million barrels. MN1 was
Slide 6: Capital raising and asset sales
Accordingly, when in March / April 2009 management perceived that a capital raising of the size required may have been possible, the board acted expeditiously, taking the view that a combined placement and share purchase For personal use only plan (“SPP”) would best serve shareholder interests as a
Slide 7: Loan facility and share price
• Largely as a result of the Company’s responses to the challenging circumstances (as described above), the relationship with our loan facility provider was not prejudiced by any breaches of debt covenants. Furthermore I am pleased to say Horizon Oil satisfied all technical and For personal use only
Slide 8: Share price performance and ASX 300 inclusion
The Company’s share price was dramatically buffeted by the GFC and market reaction to Maari field production delays. However, the relative performance from mid-2009 is particularly notable, with the Company’s share price increasing markedly against the backdrop of good performance from Maari, repaym
Slide 9: Financial position and plans
would expect - all other things being equal - an upward revaluation to result. Further increases may be expected when the fields come on stream. 4. FINANCIAL POSITION AND PLANS For personal use only The Company’s financial position has strengthened materially over the last 12 months. Proceeds of Maa
Slide 10: Acknowledgements
fund the Company’s share of exploration and development expenditure in PRLs 4 and 5 in PNG. 5. ACKNOWLEDGEMENTS For personal use only As noted earlier, the last 12 months have been challenging for the Company. The board highly commends Brent Emmett and the Horizon Oil team for the way they have resp
Slide 11: Outlook: oil and natural gas markets
The GFC has clearly had a significant downward impact on global oil demand, particularly in the USA. However, demand by the fast growing economies in the Asia-Pacific region, led by China and India, has remained notably strong. For personal use only On the supply side, OPEC has to date been cohesive
Slide 12: The Outlook for Horizon Oil
(3) The Outlook for Horizon Oil The exceptional events and circumstances described in this address are clear evidence of the risks involved in the upstream oil and gas industry. The board was (and remains) conscious of these risks. For personal use only However:- • Substantial cash inflows from Maar
Slide 13: Annual General Meeting 20 November 2009
HORIZON OIL LIMITED ABN 51 009 799 455 Annual General Meeting For personal use only 20 November 2009 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
Slide 14: Chairman's Address
HORIZON OIL LIMITED ABN 51 009 799 455 Annual General Meeting For personal use only Chairman’s Address 20 November 2009 This presentation contains some references to forward looking assumptions, representations, estimates and outcomes. These are uncertain by the nature of the business and no assuran
Slide 15: Share Price Performance
Share Price Performance For personal use only
Slide 16: Annual General Meeting 20 November 2009
HORIZON OIL LIMITED ABN 51 009 799 455 Annual General Meeting For personal use only 20 November 2009 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
Slide 17: Shareholder Presentation
HORIZON OIL LIMITED ABN 51 009 799 455 Annual General Meeting For personal use only 20 November 2009 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 a
Slide 18: Investment Strategy
Investment Strategy For personal use only § Distinct southeast Asian geographic focus § Strong, long-lived cashflows from Maari field, offshore New Zealand, to fund future capital program § Substantial inventory of discovered reserves and resources to bring into production with minimal exposure to g
Slide 19: Asset Location – Focus on SE Asia
Asset Location – Focus on SE Asia For personal use only Productive fairways, mature operating environment … …strong demand for oil and gas
Slide 20: Horizon Oil Shareholder Distribution
Horizon Oil Shareholder Distribution For personal use only Register strengthened over 2009… Ward Ferry (HK) Acorn Capital Challenger Accident Compensation Corp (NZ) Paradice Colonial First State New City (UK) BT Perpetual ING etc.
Slide 21: Horizon Oil Statistics
Horizon Oil Statistics For personal use only Increased trading volume… SHARE PRICE HISTORY TRADING STATISTICS …HZN admitted to ASX 300 Index
Slide 22: Reserves and Resources
Reserves and Resources For personal use only Net recoverable in millions of barrels of oil equivalent – total 94 mmboe RESERVES RESOURCES
Slide 23: Net Production Forecast
Net Production Forecast For personal use only
Slide 24: Maari Development – New Zealand
Maari Development – New Zealand For personal use only Installation complete and production underway… Maari / Manaia: HZN 10% OMV 69% (Op) Todd 16% CUE 5%
Slide 25: Maari Status
Maari Status For personal use only § Development drilling program with Ensco 107 jack-up rig began 11 November 2008 and completed ahead of schedule on 26 July 2009. Program entailed batch drilling of 3 oil production wells, followed by 3 water injectors and 2 oil production wells § Wellhead platform
Slide 26: Maari Development – Features
Maari Development – Features For personal use only § Production permit through December 2027 with ability to extend § Design plateau production rate 35,000 bopd § Wellhead platform allows well intervention without need to import a rig § Workover rig and coiled tubing unit permanently on platform or
Slide 27: Maari Upside Potential
Maari Upside Potential For personal use only
Slide 28: Maari Reserves and Resources
Maari Reserves and Resources For personal use only Zone Gross Oil-in-place Gross recoverable 2P reserves (mmbo) (mmbo) Maari Moki 141 60 – to be revised (upwards?) Gross 2P resources (mmbo) Maari M2A Sands 40 Waiting on development plan Manaia Mangahewa 50 – 60 Waiting on development plan
Slide 29: PEP 51313 – New Zealand
PEP 51313 – New Zealand For personal use only 2,628 sq km block awarded with 5 year term… PEP 51313: HZN 30% Todd 50% (Op) CUE 20% …deep prospect and lead inventory in proven play-types
Slide 30: China 22/12 – Discoveries and Prospects
China 22/12 – Discoveries and Prospects For personal use only 185 mmbo-in-place discovered... Block 22/12 Pre-CNOOC Back-in: HZN 30% ROC 40% (Op) Petsec 25% Majuko Corp 5% Block 22/12 Post-CNOOC Back-in: HZN 14.7% CNOOC 51% (Op) ROC 19.6% Petsec 12.3% Majuko Corp 2.4% …development planning underway
Slide 31: Block 22/12 Shared, Phased Development Plan
Block 22/12 Shared, Phased Development Plan For personal use only § Philosophy is to utilise CNOOC facilities, infrastructure and manpower where possible to achieve capex and opex sharing and accelerated timing to first oil § Phase I – unmanned wellhead platforms at Wei 6-12S and Wei12-8W, tied back
Slide 32: Phased Development Concept
Phased Development Concept For personal use only
Slide 33: Papua New Guinea
Papua New Guinea Uptick in industry activity, with large projects gaining traction… For personal use only … major gas aggregation play emerging in Western Corridor /Offshore
Slide 34: Recent PNG Transactions
Recent PNG Transactions…heavy artillery arriving For personal use only Date Company Transactions On-going Exxon Development of the Exxon-operated PNG LNG Project On-going InterOil Appraisal / development of Elk / Antelope LNG Project Sep’08 Sasol Papua Petroleum Ltd farms out 51% interests in PPLs 2
Slide 35: PRL 4 and PRL 5 – Papua New Guinea
PRL 4 and PRL 5 – Papua New Guinea Possible recoverable resources of 1 – 2 tcf gas and 40 – 70 mmbo condensate… For personal use only …condensate stripping phase planning underway
Slide 36: Western Province Play – Papua New Guinea
Western Province Play – Papua New Guinea For personal use only § Significant resource position, 50% interest with partner Talisman Energy Inc. in:- • PRL 4 (Stanley gas / condensate discovery) • PRL 5 (Elevala and Ketu gas / condensate discoveries) § Fields located in relatively flat and accessible
Slide 37: Funding Position
Funding Position For personal use only Funding requirements Operations § Remaining Maari development costs funded by project revenues § China Block 22/12 development at 14.7% interest ~US$45 million net § PNG Stanley development at 50% interest ~US$65 million net § Unspecified overhead, exploration
Slide 38: Analysts' Valuations
Analysts’ Valuations For personal use only Firm Date of research Valuation / share Recommendation RBS Morgans 9 November 09 $0.48 BUY Euroz 2 November 09 $0.49 BUY Wilson HTM 2 November 09 $0.52 BUY StockAnalysis 15 October 09 $0.40 BUY Bell Potter 5 October 09 $0.41 BUY Patersons 15 September 09 $0
Slide 39: Catalysts for Re-rating
HZN Share Price … Catalysts for Re- Re-rating For personal use only § FID on Block 22/12 and begin construction § Stanley and Elevala drilling and begin construction of condensate stripping project § Progress (by Talisman) on Western Corridor gas aggregation scheme § Exploration success − PEP 51313,
Slide 40: Coming up in 2010
Coming up in 2010… For personal use only § Maari field, New Zealand – − Optimise production from Moki zone − M2A zone on production − Manaia Mangahewa on production § PEP 51313, New Zealand − Acquire 3D seismic over Matariki − Prepare for drilling in 2011 § Block 22/12, offshore China − FID for Wei
Slide 41: For personal use only
Please visit the Horizon Oil website www.horizonoil.com.au to see:- see:- Detailed Investor Presentation For personal use only 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