Horizon Oil Limited · ASX:HZN
Horizon Oil — Investor Presentation (November 2017)
26 slides from Horizon Oil's investor presentation, Nov 13, 2017
Slide 1: ASX cover letter: Investor Presentation
Horizon Oil Limited ABN 51 009 799 455 Level 6, 134 William Street, Woolloomooloo NSW Australia 2011 Tel +61 2 9332 5000, Fax +61 2 9332 5050 www.horizonoil.com.au For personal use only 13 November 2017 The Manager, Company Announcements ASX Limited Exchange Centre 20 Bridge Street Sydney NSW 2000 I
Slide 2: Investor Presentation November 2017
For personal use only HORIZON OIL LIMITED / ABN 51 009 799 455 Investor Presentation 13 November 2017
Slide 3: Disclaimer
For personal use only 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 projection
Slide 4: Horizon Oil snapshot
For personal use only Horizon Oil (ASX:HZN) snapshot • Sydney‐based public company listed on Australian Securities Exchange (ASX) • Portfolio of exploration, development and producing assets in Asia‐Pacific region, with net production of ~4,100 bopd, with free cash flow breakeven after all‐in costs
Slide 5: Corporate summary
For personal use only Corporate summary Share Price vs Brent Crude vs ASX 200 Energy Index ‐ Rebased Shareholders Board of Directors John Humphrey Chairman Brent Emmett Chief Executive Officer / Managing Director Gerrit de Nys Director Andrew Stock Director Sandra Birkensleigh Director Greg Bittar D
Slide 6: Horizon Oil as an investment proposition
For personal use only Horizon Oil as an investment proposition Strong, long‐lived production profile and cash flow • Best‐of‐peer‐group net operating cash flow from China and New Zealand, to average US$60 – 70 million pa over the period FY 2018 – 2022, with modest future capital spend (includes cont
Slide 7: Five year performance – solid track record
For personal use only Five year performance – solid track record 1 Includes impact of Maari acquisition. See HZN’s announcement dated 6 Nov 2017 2 Reserves and Resource statement at 30 June 2017, adjusted for subsequent transactions in PNG and PMP 38160 (New Zealand) pending customary government app
Slide 8: Calendar year 2017 free cash flow breakeven of US$33/barrel
For personal use only Calendar year 2017 free cash flow (FCF) breakeven of US$33/barrel provides capacity for debt repayment • Low breakeven price provides stability in low oil price environment and capacity for debt repayment • Low opex in China and tight control over capital spend underwrites the
Slide 9: Debt reduction trajectory continuing
For personal use only Debt reduction trajectory continuing • Horizon Oil’s proven, developed and producing Beibu Gulf and Maari fields provide substantial debt security in a challenging environment for small and mid‐ cap companies to access debt • The Company refinanced the outstanding US$58.8 milli
Slide 10: Beibu Gulf producing fields and future development targets
For personal use only Beibu Gulf producing fields and future development targets • WZ 6‐12N and WZ 12‐8W fields continue producing above forecast, currently ~9,300 bopd • Remaining cost recovery oil entitlement of US$86.6m to be received over 2017 – 20, unrecovered balance escalates at 9% pa • Fixed
Slide 11: Beibu Gulf future development projects – WZ 12-8E and associated fields
For personal use only Beibu Gulf future development projects – WZ 12‐8E and associated fields Leased mobile production platform (MOPU) • Development plan (ODP) for integrated development of WZ 12‐8E and associated fields (audited gross 2C resources 11.1 mmbo) to be submitted for Government approval
Slide 12: Beibu Gulf fields – phased development approach
For personal use only Beibu Gulf fields – phased development approach Phased approach to development of new reserves – use of existing infrastructure:‐ – reduces costs and engineering risk – accelerates timeline – enhances economics of fields already on stream Investor Presentation November 17 11
Slide 13: Beibu Gulf production and cost recovery driving cash generation through 2022
For personal use only Beibu Gulf production and cost recovery driving cash generation through 2022 Actual Forecast 4,500 4,000 Cost recovery production entitlement 3,500 3,000 2,500 bopd 2,000 WZ 12‐8E field 1,500 Existing fields 1,000 500 0 Jun‐15 Jun‐16 Jun‐17 Jun‐18 Jun‐19 Jun‐20 Jun‐21 Jun‐22 Wo
Slide 14: Maari/Manaia fields – New Zealand
For personal use only Maari /Manaia fields – New Zealand • Field production currently ~8,800 bopd • Regular workover program to replace ESPs, clean scale and add perforations has successfully enhanced production • Water injection (WI) repairs and temporary repair to platform strut completed in Janua
Slide 15: Manaia – Maari schematic cross-section
For personal use only Manaia – Maari schematic cross‐section • Multiple oil accumulations on production serve to diversify risk • Potential to develop Moki zone at Manaia in future – gross 2C resource 50.0 mmbo Investor Presentation November 17 14
Slide 16: Acquisition of additional 16% interest in Maari/Manaia fields – metrics
For personal use only Acquisition of additional 16% interest in Maari/Manaia fields – metrics • Acquisition of additional 16% interest in PMP 38160 from Todd, increasing HZN interest in the producing Maari and Manaia fields to 26%*. • Purchase price US$17.6m; effective date of 31 December 2017; acqu
Slide 17: Papua New Guinea – the regional picture
For personal use only Papua New Guinea – the regional picture • PNG is a pro development jurisdiction with stable petroleum fiscal regime • Rich mineral and petroleum province with a history of successful large scale resource projects delivery eg. PNG LNG • Jurisdiction well supported by the interna
Slide 18: Horizon Oil acreage and JV partners – resource development overview
For personal use only Horizon Oil acreage and JV partners – resource development overview • Significant gas resource discovered and appraised in uncomplicated structures, with highly productive sandstone reservoirs • High level of condensate and LPG contained in the gas • Relatively easy surface acc
Slide 19: Appraised western foreland fields – concentrated resource distribution and ownership
For personal use only Appraised western foreland fields – concentrated resource distribution and ownership * * • Contingent resource (2C) : 2.0 – 2.5 tcf gas 60 – 70 mmbbl condensate • Horizon Oil and Repsol have a combined interest of 70% of the total resource and operate all the fields , which wil
Slide 20: Western LNG development scheme
For personal use only Western LNG development scheme WLNG development ‐ 1.5 mtpa sales capacity Aggregated raw gas production profile ‐ 2C resources 300 250 Wellhead rate (mmscfd) 200 150 100 1C resources profile 50 ‐ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 P
Slide 21: Development scheme selection criteria
For personal use only Development scheme selection criteria • Standalone development – 1.5 mtpa right‐sized for appraised resource base • Simple concept with lowest technical and execution risk • Maximum use of standard, proven technology • System uptime consistent with global LNG projects (90‐ 95%)
Slide 22: LNG demand forecast in target areas
For personal use only LNG demand forecast in target areas Source: WoodMac, LNG Tool, Q2 2017 dataset Note: Stylised projections based on underlying annual forecasts Investor Presentation November 17 21
Slide 23: WLNG well-placed to supply emerging demand areas
For personal use only WLNG well‐placed to supply emerging demand areas – Indonesia, South China Sea Rim, China, India • Strong increase in demand forecast in emerging Asian economies, pointing to supply shortfalls from 2023 • Many new entrants seeking to import LNG to: ̶ Offset decline in domestic g
Slide 24: Western LNG project, PNG – key points
For personal use only Western LNG project, PNG – key points • Preliminary project economics are attractive, with 20+ year plateau production for 2C gas resource and economics strengthened by significant condensate production. • 520 km gas and condensate pipelines will connect western foreland fields
Slide 25: Outlook for 2018
For personal use only Outlook for 2018 Financial • Operating cash flows to significantly increase from Jan‐18 with increased interest in Maari/Manaia, continuing steady production at Beibu Gulf fields, including cost recovery production entitlement and ongoing control of opex and capex • Continued f
Slide 26: For more information please contact
For personal use only For more information please contact: Horizon Oil Limited T: +61 2 9332 5000 Level 6, 134 William St Brent Emmett Chief Executive Officer F: +61 2 9332 5050 Woolloomooloo NSW 2011 E: info@horizonoil.com.au horizonoil.com.au Media enquiries Gavan Collery M: +61 419 372 210 Resour