The company said its deals delivered it almost 28% in the total certified resources contained in Papua New Guinea's Western Foreland fields of 2-2.5 trillion cubic feet and 60-70MMbbl of condensate. 

 

Horizon and Spanish partner Repsol now operate all the licences and hold 70% of the total gas resource to be aggregated to underpin the proposed 1.5 million tonne per annum Western LNG project.

 

Horizon said that the consolidation would help facilitate the planned multi-licence development in one of the world's premier locations for LNG developments.

 

In January Horizon snapped up a 50% operated interest in PRL 28 which surrounds the small Ubuntu field adjacent to PRL 21 and the Elevala/Tingu and Ketu fields.

 

Since that time Horizon has acquired an additional 3.15% interest in PRL 21 as result of Mitsubishi Corporation divesting its upstream assets in PNG, for a total 30.15%.

 

It also swapped a 20% stake in PRL 28 for a 20% stake in PRL 40, where Rift Oil made two significant gas-condensate discoveries almost a decade ago: Puk Puk and Douglas.

 

The trade, with PNG's national oil company, comes as the government and Kumul Petroleum Holdings have expressed a desire to bring the undeveloped resources into production in a rapid timeframe.

 

Horizon paid out a confidential amount of cash to improve its position, but said it would not result in a material reduction in its cash position "taking into account the consideration for the acquisitions and the near term exploration and development costs arising from the expanded resource base".

 

Horizon said it was in a much better position to help drive the Western LNG development and regional exploration as the deals include an additional 5% in PPL 372 for 95% and 10% in PPL 373 for 100%.

 

Horizon CEO Brent Emmett said the Puk Puk and Douglas fields would be important contributors to the gas aggregation later in the Western LNG project life, extending the production plateau significantly. 

 

"We are pleased to be able to acquire a 20% interest in these fields in exchange for 20% of our interest in the Ubuntu licence, where we were overweight, in a trade agreement with Kumul Petroleum Holdings," he said.

 

"As a result of this and other recent transactions, Kumul will hold interests in Stanley, Ubuntu, Puk Puk and Douglas fields and, as the national oil company, we expect they will bring considerable strategic value to the gas aggregation project."

 

Emmett said the company had a meaningful but manageable exposure to the proposed LNG development, taking into account the $US130 million ($A166 million) milestone payment due on the final investment decision and various the funds to be reimbursed by the PNG government if it elects to back-in to the project. 

 

"The 80-100% interests in the exploration licences provide scope for Horizon Oil to farm out future exploration work, to reduce exposure to cost and exploration risk," he said. 

 

"The exploration acreage is located close to, and on trend with, existing discoveries and has considerable add-on potential to extend the life of Western LNG." 

 

PPL 373 sits between Oil Search's Kimu and Barikewa appraisal projects, while PPL 372 sits between the Elevala area and the prolific Hides area in the Highlands.

 

The Western LNG development will connect the discovered fields in the Forelands province via 500km of pipelines to a barge mounted liquefaction facility offshore Daru Island, potentially supporting sales into the domestic market.

 

Repsol and Horizon are looking to replicate the operational success of the largest PNG LNG development, targeting rapidly growing markets in the nearby Indonesian Archipelago, South China Sea Rim and China, which could be undersupplied around the time the Western LNG project completes development. 

 

Repsol holds an average 42% of the resources, with the balance shared by Australia's Kina Petroleum, Japan's Osaka Gas, P3GE and Kumul.

 

Between them, Horizon and Repsol operate all the blocks.