Horizon Oil Faces Brent Price Headwinds Despite Strong Asset Expansion
Horizon Oil Limited reported robust FY25 results, highlighted by a strategic acquisition of Thailand upstream assets and a 10-year permit extension at Maari, nearly doubling production and securing a strong outlook through 2030.
- Acquisition of Thailand assets from ExxonMobil adds 28% to 2P reserves
- Production nearly doubled to over 6,500 barrels of oil equivalent per day
- Maintained consistent dividends of AUD 3 cents per share for five years
- Maari field permit extended by 10 years to 2037
- Strong cash flow supports growth projects and shareholder distributions
Strategic Growth and Financial Strength
Horizon Oil Limited’s 2025 Annual General Meeting revealed a company transformed over the past year, with a near doubling of production capacity and a fortified asset base spanning four countries. The highlight was the acquisition of upstream gas assets in Thailand from ExxonMobil, a move that added 3.5 million barrels of oil equivalent to Horizon’s 2P reserves, an increase of 28%, and significantly boosted production and cash flow.
CEO Richard Beament emphasized the disciplined approach behind the acquisition, which included thorough due diligence, regulatory approvals, and financing arrangements with Macquarie Bank. This transaction not only diversifies Horizon’s portfolio geographically but also strengthens its foothold in the growing Southeast Asian energy market.
Sustained Dividends and Operational Excellence
Despite the capital outlay for acquisitions, Horizon maintained its commitment to shareholders by delivering consistent dividends of AUD 3 cents per share for the fifth consecutive year, totaling AUD 15.5 cents per share since 2021. The company’s strong EBITDA and operating cash flow underpin this steady distribution, reflecting a balance between rewarding investors and funding growth.
Operationally, Horizon’s foundation assets, Maari in New Zealand and Block 22/12 in China, continue to perform robustly. Notably, the Maari field secured a 10-year permit extension through 2037, providing long-term production certainty. In Australia, the Mereenie gas field has become a cash flow contributor supported by a new six-year gas sales agreement with the Northern Territory government.
Positioned for the Energy Transition
Horizon’s portfolio now includes four cash-generating businesses, with the Thailand assets supporting domestic gas-fired power generation critical to the region’s energy security. The company’s focus on low operating costs and ESG initiatives, including emission reductions and community programs, positions it well amid the global energy transition.
Looking ahead, Horizon plans to advance growth projects in China and Thailand, maintain capital discipline, and continue delivering shareholder returns. The company’s diversified production base and strategic investments suggest resilience against commodity price fluctuations, even as Brent crude prices have softened recently.
Chairman Bruce highlighted the company’s strong share price performance relative to the ASX 200, underscoring the market’s recognition of Horizon’s focused strategy and operational execution. Board renewal with new non-executive directors also signals a refreshed governance approach as Horizon embarks on its next growth phase.
Bottom Line?
Horizon’s strategic acquisitions and operational discipline have reshaped its growth trajectory, setting the stage for sustained production and shareholder value through 2030 and beyond.
Questions in the middle?
- How will the recent decline in Brent oil prices impact Horizon’s FY26 financial performance?
- What are the long-term operational risks and opportunities associated with the Thailand assets?
- How will Horizon balance further acquisitions with maintaining its strong dividend policy?
