Horizon told the ASX last Friday that the A$2.65m loss for the December half-year (A$2m loss in the corresponding 2003 period) included a write-off of A$1.35 million of exploration expenditure associated with the recent unsuccessful Kapul-1 well in PNG.

But significant progress had been made towards making the Maari final investment decision (FID), which was now expected in the second quarter of 2005.

The development plan had been narrowed to either a jack-up drilling and production unit with a floating storage and offloading vessel; or a minimal facilities wellhead platform with a floating production storage and offloading vessel.

Subsea wellheads had been rejected on risk and economic grounds, with horizontal wells and a waterflood scheme now preferred, although still subject to the completion of detailed studies by operator OMV New Zealand.

A final concept selection on Maari - the largest undeveloped offshore oil field in New Zealand containing at least 50 million barrels of recoverable oil (P50) in the Miocene-aged Moki formation - is to be made about April.

The development will include the flexibility to tie-in the Maari M2A level reservoir and the separate nearby structure where the Maui-4 well flowed oil at the time of the original Maui field discovery.

Design and construction of the Maari project is planned from mid-2005 with production coming onstream from mid-2007.

Horizon also said a revised development approach for Block 22/12 in China allowed for a staged development of the 12-8 area.

The joint venture had reached broad agreement with China National Offshore Oil Corporation to include the design and fabrication for the 12-8 West field in CNOOC’s ongoing development programme, and to utilise existing CNOOC infrastructure in the Gulf of Beibu.

“Our clear priorities for the next six months are to reach the point of financial investment decision on both the Maari field in New Zealand and the 12-8 West field in China,” Horizon chief executive Brent Emmett said.

“Reaching FID by mid-year will depend on maturing these concepts into financially viable outcomes by improving cost definition through the FEED process for the chosen concepts.”