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According to Horizon CEO Brent Emmett, ““We are generally pleased with progress over the past year and believe that the coming year will be a good one in terms of the level of activity and bringing assets closer to production.”
“All this will happen against a back-drop of currently high oil prices; an environment that the weight of argument suggests, apart from short-term fluctuations, should persist. Undoubtedly our pre-development assets and exploration plays look attractive in the context of US$30-40 oil,” he added.
Returns for Horizon came from the November 2003 rights issue which raised $5.9 million for E&P, $2.3 million from farm-outs of the Bayou Choctaw interest and divestments of New Zealand assets, $5.3 million from the sale of Swift Energy Co Inc shares, and cash in hand to the tune of $7.8 million as of 30 June 2004 which includes the firm’s share of JV cash surpluses.
Emmett has confidence, despite some technical setbacks at the Maari field offshore New Zealand, which could be rectified through the use of hydraulic or electric submersible pumps. He says the rest of the E&P calendar looks bright.
According to Emmett, “The best prospect for near-term cash flow is our Bayou Choctaw play, which is now being funded and managed by a very successful specialist in the area, [CLK Energy Inc] with drilling well underway before the end of 2004.”
“Despite initial pessimism with the results of recent drilling on Block 22/12 in China, prospects for development of the 12-8 East and West fields now appear to be back on track. We anticipate submitting a development plan to the China National Offshore Oil Corporation within three months [and] the exploration play that has come out of the recalibrated 3D seismic grid over Block 22/12 is new and exciting and we would hope to drill at least one well on it within the next 12 months.
“This drilling, plus Kapul [in October] and Bayou Choctaw [in December], has the potential to add significant reserves. In the case of Block 22/12 and Bayou Choctaw, the drilling will be supported by high quality 3D seismic,” added Emmett.
