Horizon Oil Expands in Thailand with $30M Gas Asset Acquisition

About Horizon Oil Limited

Horizon Oil Limited (ASX: HZN) is an independent energy company headquartered in Sydney, Australia. Established in 1969, the company focuses on oil and gas exploration and production, primarily in the Asia-Pacific region. Horizon has a diversified portfolio, with operations spanning offshore and onshore assets. As of today, Horizon Oil’s share price stands at $0.2150, reflecting investor confidence in its recent expansion initiatives.

Strategic Acquisition to Strengthen Production Base

Horizon Oil’s acquisition of interests in the Sinphuhorm and Nam Phong gas fields represents a calculated step towards bolstering its production base. These fields, located in northeastern Thailand, are known for their stable gas output and long-term contracts with PTT Public Company Limited. The Sinphuhorm field, which started production in 2006, produces approximately 122 million standard cubic feet of gas per day. Meanwhile, Nam Phong, operational since 1990, produces around 6.5 million standard cubic feet per day. The acquisition is expected to generate positive cash flow and contribute to Horizon’s sustained growth.

Financing and Financial Strategy

To fund this acquisition, Horizon has structured a financing plan that minimises immediate financial strain. The company has secured a credit-approved amendment to its existing debt facility with Macquarie Bank, enabling it to access up to $22 million in additional funds. An additional $10 million will be available after the acquisition is finalised. This financing structure ensures that Horizon’s existing cash reserves remain largely unaffected, with an estimated impact of less than $10 million. The company’s ability to secure favourable financing terms reflects the market’s confidence in its growth trajectory.

Re-Entry into Thailand: A Strategic Move

This acquisition marks Horizon’s return to the Thai energy sector, a market it previously explored between 2006 and 2008. Thailand presents an attractive investment opportunity due to its growing energy demand and well-established gas infrastructure. The Sinphuhorm and Nam Phong fields play a crucial role in supplying gas to regional power plants, making them vital to Thailand’s energy security. By partnering with Matahio Energy and PTTEP, Horizon is positioning itself strategically to capitalise on future expansion opportunities in South-east Asia.

Long-Term Outlook and Growth Prospects

With this acquisition, Horizon Oil is set to enhance its production levels, improve cash flow stability, and diversify its asset base. The company estimates that the deal will add 3.9 million barrels of oil equivalent to its reserves, providing a substantial boost to its long-term production strategy. Additionally, potential facility upgrades, infill drilling, and reservoir optimisations could further enhance output and profitability. This move aligns with Horizon’s broader strategy of maintaining a balanced portfolio while ensuring sustainable returns for investors.

Horizon Oil’s latest acquisition not only strengthens its position in the Asia-Pacific energy market but also reinforces its commitment to long-term value creation. As the company moves forward with this strategic expansion, investors and industry stakeholders will be keenly watching its next steps in Thailand and beyond.