Horizon Oil Limited · ASX:HZN
Horizon Oil — FY2022 Earnings Presentation
24 slides from Horizon Oil's earnings presentation, Aug 25, 2022
Slide 1: FY22 Full Year Results
FY22 FULL YEAR RESULTS FY22 RESULTS PRESENTATION
Slide 2: Compliance Statement
COMPLIANCE STATEMENT Disclaimer Reserves Disclosure ► Statements contained in this material, particularly those regarding the possible or assumed ► Unless otherwise stated, all petroleum reserves and resource estimates refer to future performance, costs, dividends, returns, production levels or rate
Slide 3: FY22 Investment Highlights
FY22 INVESTMENT HIGHLIGHTS Underlying profit Total distributions Sales revenue after tax to Shareholders1 US$24.3 million AUD 3 cents per share US$108.1 million (~US$34 million) Net cash Sales volume EBITDAX US$42.8 million 1.205 MMbbl US$73.0 million FY22 RESULTS PRESENTATION 44 1 Includes an unfra
Slide 4: Delivering on Strategy
DELIVERING ON STRATEGY FURTHER DISTRIBUTIONS TO CONTINUE INVESTING IN MAXIMISE FREE CASHFLOW1 SHAREHOLDERS PRODUCTION GROWTH ► Generated EBITDAX of US$73 million, ► AUD$49.4 million distributed in ► WZ12-8E field – commencement of with net cash of US$42.8 million CY2021 project delivering 0.6 MMbbl
Slide 5: FY22 Highlights
FY22 HIGHLIGHTS FINANCIAL OPERATIONAL SHAREHOLDER ESG RETURN ► Sales revenue of US$108.1 ► WZ12-8E project - oil from six ► AUD 3 cent per share capital ► Strong safety record below million wells started in Q2 CY2022, 18 return completed during first industry benchmarks months after FID half ► EBITD
Slide 6: Balancing Growth & Shareholder Distributions
BALANCING GROWTH & SHAREHOLDER DISTRIBUTIONS 70 60 Capex commitments Drawdown of debt 50 - WZ12-8E & other 40 US$m Working capital 30 Cash at 30 June 2022 Dividend 20 10 Capital return 0 Source of Funds Use of funds Liquidity retained to meet capital commitments and working Announced distributions r
Slide 7: Reserves & Resources
RESERVES & RESOURCES1 2P RESERVES RECONCILIATION 5.8 ► ~30% 2P reserves replacement 6.7 1.2 (13% YOY 46% 2P - 5.8 54% 0.3 reduction) ► ~50% increase in Block 22/12 Contingent MMbbl Resources, reflecting an expanded portfolio of short to medium term opportunities ► China 2C increase of 1.2 MMbbl larg
Slide 8: FY22 Financial Results
FY22 FINANCIAL RESULTS FY22 RESULTS PRESENTATION
Slide 9: FY22 Financial & Commercial Highlights
FY22 FINANCIAL & COMMERCIAL HIGHLIGHTS ► Robust production & sales volumes – 1.3 million bbls FY 2022 FY 2021 produced and 1.2 million bbls sold in FY22 Production Volumes (MMbbl) 1.33 1.33 ► Revenue growth – Revenue increased 70% during FY22 to Sales Volumes (MMbbl) 1.21 1.27 US$108 million driven
Slide 10: Strong Cashflow Rebuilds Cash Position Following Capital Return
STRONG CASHFLOW REBUILDS CASH POSITION FOLLOWING CAPITAL RETURN US$ MILLION ( 24.7 ) (19.8) 101.4 ( 11.5 ) ( 10.4 ) 56.9 ( 34.8 ) 44.4 44.1 Opening cash and Net revenue Cash operating costs Corporate, tax, Net cash inflows Debt repayments Investment in oil Return of capital Closing cash cash equival
Slide 11: Revenue Growth with Sustained Low-Cost Production Drives Increased Profitability
REVENUE GROWTH WITH SUSTAINED LOW-COST PRODUCTION DRIVES INCREASED PROFITABILITY US$ MILLION (5.8) (8.3) (2.0) 0.3 50.4 (18.1) 24.3 7.8 Underlying profit Net realised oil price, Sales volume China windfall Operating costs Others Income tax Underlying profit after tax for inclusive of hedge & other l
Slide 12: Sustained Production with Revenue Growth
SUSTAINED PRODUCTION WITH REVENUE GROWTH OIL SALES REVENUE1 2.0 160 100 140 90 0.29 80 1.5 0.31 120 19.2 70 Oil Sales (MMbbl) 0.58 100 60 US$/bbl 0.48 0.60 18.0 33.8 US$m 1.0 0.47 0.36 80 42.3 50 31.2 37.1 40 60 25.5 30 0.5 1.00 40 74.3 0.86 0.83 0.80 0.84 60.9 20 50.9 46.8 20 38.1 10 0.0 0 0 FY 201
Slide 13: Revenue Growth with Sustained Low-Cost Production Drives Increased Profitability
REVENUE GROWTH WITH SUSTAINED LOW-COST PRODUCTION DRIVES INCREASED PROFITABILITY EBITDAX1 AND COST PER BBL UNDERLYING PROFIT AFTER TAX1 100 20 30 90 18 19.2 25 80 16 70 14 20 60 18.0 12 US$/bbl US$m US$m 50 0.1 10 15 19.2 40 8 24.3 73.8 73.0 30 6 10 18.0 50.5 51.3 20 36.4 4 5 8.2 10 2 7.8 5.5 0 0 0
Slide 14: Positive Free Cashflow & Increased Net Cash Position
POSITIVE FREE CASHFLOW & INCREASED NET CASH POSITION FREE CASH FLOW1 NET CASH/(NET DEBT) 80 150 60 40 100 34.8 72.8 57.6 56.9 20 36.7 US$m 23.2 50 42.8 US$m 0 (8.1) (3.4) (10.2) (10.4) 31.7 0.5 -20 (37.7) 0 (28.0) -40 (88.6) -50 -60 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 -100 Operating CF Investing
Slide 15: Outlook & Asset Updates
OUTLOOK & ASSET UPDATES FY22 RESULTS PRESENTATION PAGE 16
Slide 16: Block 22/12: Reliable, High Margin Production
BLOCK 22/12: RELIABLE, HIGH MARGIN PRODUCTION Export to Weizhou WZ 6-12 North ASSET OVERVIEW Terminal WZ 6-12 Mid WZ 6-12 South ► Block 22/12, Beibu Gulf, China, 26.95% production / 55% exploration WZ 6-12 Sliver CNOOC ► JV: CNOOC (51% - Operator), Roc Oil (19.6%), Majuko Corp. (2.45%) facilities ►
Slide 17: Block 22/12: WZ12-8E Development Project
BLOCK 22/12: WZ12-8E DEVELOPMENT PROJECT ► Project commissioned and brought on to production in April 2022 ► 6 development wells and 1 water disposal well successfully drilled and completed WZ12-8E WHP ► Oil production forecast to average ~4,000bopd (gross) in the first year of production Export ► F
Slide 18: Block 22/12: Infill, Appraisal & Exploration Opportunities
BLOCK 22/12: INFILL, APPRAISAL & EXPLORATION OPPORTUNITIES ► The JV has a strong portfolio of 2P, North 2C and 2U infill, appraisal and M3 infrastructure led near-field exploration opportunities, two of which are proposed for drilling by CYE 20221 ► Success in these opportunities will help to extend
Slide 19: Block 22/12: History & Indicative Forecast (Gross)
BLOCK 22/12: HISTORY & INDICATIVE FORECAST (GROSS) 20,000 History Forecast 2P reserves Indicative future activities at 30-June-2022: 12.7 MMbbl est. net Capex $10-15m p.a. ODP1 forecast 15,000 recovery 16.2 MMbbl Gross oil rate (bopd) 10,000 End of Production period 5,000 Cumulative production to 30
Slide 20: Maari: Stable Performance
MAARI: STABLE PERFORMANCE ASSET OVERVIEW ► Maari, New Zealand, 26% ► JV: OMV (69% - Operator), Cue Energy (5%) ► Maari/Manaia generates approximately 30% of Horizon operating cashflow ► Cash operating costs for FY2022 of $28/bbl produced ► CY2022 production impacted by COVID led deferrals of workove
Slide 21: Maari: History & Indicative Forecast (Gross)
MAARI: HISTORY & INDICATIVE FORECAST (GROSS) 30,000 History Forecast 25,000 Gross Oil Rate (bopd) 20,000 Indicative future activities in the current licence period1 Indicative future activities beyond 15,000 the current licence period1 2P developed reserves at 30-June-2022: 10.1 MMbbl Indicative Lif
Slide 22: 2022 Operations Activity
2022 OPERATIONS ACTIVITY 2022 Q1 Q2 Q3 Q4 Successfully completed, Block 22/12 WZ12-8 East drilling (x8) FIRST OIL all production wells online Block 22/12 WZ6-12 Workovers (x5) In progress and appraisal drilling (x1) A final decision on this Block 22/12 WZ6-12 Infill Drilling (x1)1 opportunity will
Slide 23: Investment Highlights
INVESTMENT HIGHLIGHTS • 26.95% Block 22/12, Beibu Gulf, China Material positions in • 26% Maari Project, New Zealand excellent producing assets • Current Horizon net production rate of ~5,000 bopd • JV’s - IOC’s with decades of relevant in-country experience Right sized organization • Focused active
Slide 24: Contacts
CONTACTS RICHARD BEAMENT, CEO +61 2 9332 5000 info@horizonoil.com.au Horizon Oil Limited Level 4, 360 Kent Street Sydney NSW 2000 Australia horizonoil.com.au FY22 RESULTS PRESENTATION