Horizon Oil Limited · ASX:HZN

Horizon Oil — Investor Presentation (February 2016)

31 slides from Horizon Oil's investor presentation, Feb 4, 2016

  1. Slide 1: Investor Presentation February 2016

    HORIZON OIL LIMITED ABN 51009799455 Investor Presentation February 2016

  2. Slide 2: Disclaimer

    Disclaimer Statements contained in this material, particularly those regarding the possible or assumed future performance, costs, dividends, returns, production levels or rates, prices, reserves, potential growth of Horizon Oil Limited, industry growth or other trend projections and any estimated co

  3. Slide 3: Company overview – asset portfolio

    Company overview – asset portfolio  Clear geographic focus on Asia-Pacific region  Technical focus on proven, conventional plays with scale, upside and manageable risk *  Working with experienced partners such as CNOOC, OMV, Mitsubishi and Osaka Gas  Currently producing oil but will have a diver

  4. Slide 4: Horizon Oil (HZN:AU) at a glance

    Horizon Oil (HZN:AU) at a glance  Sydney-based public company listed on Australian Securities Exchange  Portfolio of exploration, development and producing assets in Asia-Pacific region  Shareholding: IMC (Singapore) - 29%, institutions - 38%, high net worth - 20%, retail investors - 13%  Curren

  5. Slide 5: Shareholder distribution and trading statistics

    Shareholder distribution and trading statistics Jan - Feb 2016 (to date) Last $0.070 High $0.089 Low $0.070 Volume 13,181,347 12 Months Last $0.070 High $0.140 Low $0.065 Volume 703.36m Fully paid shares 1,302m 1 Partly paid shares 1.50m 2 Employee options 4.37m General options 1.0m Share appreciati

  6. Slide 6: Key performance measures – last five financial years

    Key performance measures – last five financial years Completion of Maari Growth Project in July 2015 expected to increase The outlook for 2016 in the current oil price environment remains production in 2016 positive due to the benefit of oil price hedging Average cash cost of US$14.10/barrel for the

  7. Slide 7: Net Reserves, Contingent Resources and Prospective Resources as at 30 June 2015

    Net Reserves1, Contingent Resources1 and Prospective Resources1 as at 30 June 2015 RESERVES CONTINGENT RESOURCES PROSPECTIVE RESOURCES Proven + Probable Proven + Probable Best Estimate Total: 13.9 mmboe Total: 87.6 mmboe Total: 78 mmboe including 400 bcf gas Including 286 bcf gas  Long life of rese

  8. Slide 8: Forecast net production from Reserves + Contingent Resources

    Forecast net production from Reserves + Contingent Resources as at 1 July 2015 18,000 Assumptions 16,000  Development of WZ 12-8E, 12-10 and 12-3 fields in 14,000 Beibu Gulf, with production commencing in 2017 Barrels of oil equivalent per day 12,000  Stanley condensate start-up 10,000 with gas sa

  9. Slide 9: Strategic imperative – focus on resource development

    Strategic imperative – focus on resource development Total audited reserves and contingent resources of 101.5 million barrels of equivalent 11% developed / 89% undeveloped – 34% oil / 66% gas 10.7 mmboe Developed oil (NZ and China) 5.4 mmboe Undeveloped oil (NZ and China) 66.7 mmboe 18.7 mmboe Undev

  10. Slide 10: Beibu Gulf field production and future development areas – China

    Beibu Gulf field production and future development areas – China  WZ 6-12N and WZ 12-8W fields producing above forecast  Potential for higher oil recovery from WZ 12-8W  Excellent HSE record since production start-up in 2013  Cost recovery oil entitlement of US$98m over 2016-2020  Further devel

  11. Slide 11: Horizon Oil's share of Block 22/12 gross revenue – calculated on 2P Reserves

    Horizon Oil’s share of Block 22/12 gross revenue – calculated on 2P Reserves Forecast  The above graph demonstrates Horizon Oil’s increased share of cost recovery in the period Jan 2016 to Mar 2020, once CNOOC has recovered its share of development costs  Horizon Oil’s portion of investment recove

  12. Slide 12: Beibu Gulf future development projects – WZ 12-8 Development Area

    Beibu Gulf future development projects – WZ 12-8 Development Area  Integrated development of WZ 12-8E and WZ 12-3 fields (audited gross 2C resources 10.5 mmbo) plus WZ 12-10-1 and WZ 12-10-2 accumulations (audited gross 2P+2C reserves and resources 7.1 mmbo) envisaged; development plan to be submit

  13. Slide 13: Beibu Gulf fields – phased development scheme

    Beibu Gulf fields – phased development scheme Phased approach to development of new reserves – utilising existing infrastructure 4 February 2016 13

  14. Slide 14: Maari/Manaia fields – New Zealand

    Maari /Manaia fields – New Zealand  FPSO Raroa purchased in April 2013  Maari field facilities and FPSO Raroa repaired and upgraded in H2 2013  Maari Growth Projects Program successfully completed and Ensco 107 jack-up rig released in July 2015  Field production currently ~13,500 bopd  Workover

  15. Slide 15: Manaia – Maari schematic cross-section

    Manaia – Maari schematic cross-section 4 February 2016 15

  16. Slide 16: Maari production forecast to 2030 showing Growth Projects contribution

    Maari production forecast to 2030 showing Growth Projects contribution and upside potential (HZN) Actual Forecast 4 February 2016 16

  17. Slide 17: Exploration potential on Maari/Manaia oil migration path – PEP 51313

    Exploration potential on Maari/Manaia oil migration path – PEP 51313 4 February 2016 17

  18. Slide 18: Papua New Guinea

    Papua New Guinea  PNG is rich in oil, gas and minerals with track record of successful large-scale development projects  Stable fiscal regime and succession of “pro- development” governments  Jurisdiction well-supported by lenders  Horizon Oil acreage position ~7,900 sq km in foreland terrain, p

  19. Slide 19: Horizon Oil acreage and joint venture partners - Papua New Guinea

    Horizon Oil acreage and joint venture partners - Papua New Guinea  Successful Tingu-1 exploration/appraisal well drilled in 2013 extended PRL 21 gas/condensate resources materially  Development application for Elevala/Tingu/Ketu fields in PRL 21 filed in March 2014  Development licence for Stanle

  20. Slide 20: Stanley and Elevala/Ketu field development schemes

    Stanley and Elevala/Ketu field development schemes  Stanley field Petroleum Development Licence awarded in May 2014  Development drilling subsequently completed, both wells Stanley-3 and -5 met or exceeded expectations  Elevala and Tingu to be developed as one field  Elevala/Ketu Petroleum Devel

  21. Slide 21: PNG gas commercialisation options

    PNG gas commercialisation options  Sales to regional buyers for power generation and other industrial use − Ok Tedi Mining Limited (OTML) and Frieda River project (when sanctioned) − Local towns and communities in Kiunga – Ok Menga – Frieda River corridor − Export to West Papua: Merauke, Jayapura 

  22. Slide 22: Papua New Guinea hydrocarbon production

    Papua New Guinea hydrocarbon production 4 February 2016 22

  23. Slide 23: Horizon Oil forecast net production from Reserves + Contingent Resources

    Horizon Oil forecast net production from Reserves + Contingent Resources as at 1 July 2015 18,000 Assumptions 16,000  Development of WZ 12-8E, 12-10 and 12-3 fields in 14,000 Beibu Gulf, with production commencing in 2017 Barrels of oil equivalent per day 12,000 10,000  Stanley condensate start-up

  24. Slide 24: WoodMackenzie macro oil near-term outlook (Oct 2015)

    WoodMackenzie macro oil near-term outlook (Oct 2015) (1)  US total rig count 767 (574 oil rigs) at 13 Nov 2015, down from 1,928 (1,574 oil rigs), year-on-year  Global oil supply peaked in Q2 2015, as US unconventional oil went into decline  ~ US$280 billion globally in new projects cancelled or d

  25. Slide 25: WoodMackenzie macro oil supply/demand outlook (Oct 2015)

    WoodMackenzie macro oil supply/demand outlook (Oct 2015) (2) 4 February 2016 25

  26. Slide 26: Barclays global oil supply/demand outlook (Oct 2015)

    Barclays global oil supply/demand outlook (Oct 2015) (3) The balances for 2016 are substantially tighter than 2014 and 2015, with stock draws forecast in Q4 2016 4 February 2016 26

  27. Slide 27: RBC oil price forecast Nov 2015

    RBC oil price forecast Nov 2015 (4) 4 February 2016 27

  28. Slide 28: LNG demand vs contracted supply

    LNG demand vs contracted supply Medium to long-term LNG demand forecasts still robust Source: Oil Search Limited 4 February 2016 28

  29. Slide 29: Response to current low oil price environment

    Response to current low oil price environment Brent oil price  Operating income substantively maintained by oil price hedging 2014 – mid 2016  Opex reduced (down ~20% YTD in Block 22/12)  Capex for 2015-2016 materially reduced and discretionary expenditure minimised Estimated capex + net G&A for

  30. Slide 30: Strong risk management with a well established hedging policy

    Strong risk management with a well established hedging policy Oil price hedge profile  842,500 mmboe hedged from 1 Jan 2015 through mid 2016 at average of US$95/bbl  Oil price hedging program means cash flows in 2015 and 2016 not as critically impacted by low oil prices  Production costs signific

  31. Slide 31: 4 February 2016

    ; Please visit the Horizon Oil website to see:- Level 6, 134 William St, Detailed Investor Presentation Woolloomooloo NSW 2011 Tel: +612 9332 5000 Fax: +612 9335 5050 Email: exploration@horizonoil.com.au Latest Quarterly Report Analyst reports on HZN The reserve and resource information contained in

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