Horizon Oil Announces Quarterly Report

- Production commenced from the WZ12-8E oil project
- Production from the WZ12-8E project commenced at the beginning of the quarter, reaching up to 5,900 bopd gross (1,500 bopd Horizon net) from three wells prior to a temporary shut-in towards the end of the quarter for repair works to the flexible production hose.
- Production was restarted on 24 July following the successful execution of repairs.
- All six development wells have now been successfully drilled and are on production. As of 25 July, the WZ 12-8E field was producing 7,889 bopd gross, with total Beibu production of in excess of 15,200 bopd gross (over 4,100 bopd net to Horizon).

Highest quarterly revenue in 8 years
- Production volumes were 348,214 bbls, a 9.6% increase over the prior quarter.
- Sales volumes increased 12% during the quarter to 345,558 bbls.
- Revenue for the quarter increased 39% to US$40.1 million (~A$58 million) (including hedge settlements) at an average realised oil price of ~US$113/bbl.
- Revenue for the financial year increased 70% to US$108.1 million (A$157 million).
- Net operating cash flow1 for the quarter increased 38% to US$32.5 million (~A$47 million); net operating cashflow for the financial year increased 102% to US$83.4 million (A$121 million).
- Cash operating costs of US$22/bbl produced for the quarter.
- Cash reserves were US$44.1 million (net cash US$42.8 million) at 30 June 2022, with a further US$9.9 million associated with May 2022 revenue received shortly after 30 June 2022.
- The Company maintains leverage to higher oil prices with a minimal hedge position of 45,000 bbls of swaps and put options which hedge the period July – September 2022. These hedges have a weighted average price of ~US$109/bbl.

CHIEF EXECUTIVE OFFICER’S COMMENTARY

The strong quarterly performance caps off what has been a very positive FY22 and continues to highlight the company’s leverage to the oil price, low-cost operations, and resultant strong cash generation. The higher realised oil price, coupled with robust production from our assets, resulted in an upward revision to the FY22 revenue and EBITDAX guidance. Revenue for the financial year increased 70% to US$108 million (A$157 million) generating net operating cash flow of US$83 million (A$121 million).

We were very pleased to announce first oil from the WZ 12-8E project in early April and were encouraged by initial production results. The temporary disruption to WZ12-8E production has been rectified, with strong rates noted as production ramps up.

Looking ahead to the 2023 financial year, we look forward to finalising preparations (and JV approvals) for a WZ6-12 drilling and workover program designed to restore and enhance production. We are optimistic for another great year ahead. Richard Beament, Chief Executive Officer