The significant lift in production and cash from operations indicated in earlier reports by Horizon Oil Ltd (ASX: HZN) were detailed in the half year financial report to December.
The company achieved a 23% increase in net cash from operations to $US24.3 million and a 33% increase in EBITDAX to $US24.5 M.
Horizon reported this week that gross profit lifted 56% on the corresponding half year to $US13.6 M and it achieved a 15% increase in sales revenue to $US36.4 M.
Calendar year net operating cash flow was $US56.1 M which was within the guidance of between $US50-$US60 M, and net debt was reduced by $US14.2 M to $US94.3 M (from $US108.5 M at June 30, 2017) with “continued reduction planned in CY 2018.”
Horizon said operating costs remained low, with free cash flow break-even for the period - inclusive of financing and all capital expenditure – at an “highly competitive $US34/bbl.
Acquisition of an additional 16% interest in the Maari-Manaia fields in PMP 38160 in the offshore Taranaki of New Zealand at the end of 2017, was forecast to materially increase group’s production, revenue and cash flow in 2018 and beyond, subject to customary approvals.
Progressive hedging was implemented during the period (covering the period January 2018 to March 2019), with the remaining hedge volume at December 31, 2017 being 1,033,750 barrels, securing over $US60 M of revenue.
Cash at December 31 was $US31.7 M.
Horizon’s chief executive Brent Emmett said: “Horizon Oil performed well in the period, with strong cash flows from our oil projects in China and New Zealand, which are forecast to increase in calendar year 2018 following acquisition of an additional 16% interest in the Maari-Manaia fields.”
He said the free cash flow break-even of $US34/bbl in 2018 has Horizon Oil well positioned to capture benefits of stronger oil prices, further materially reduce its debt and, together with hedging, mitigate against future oil price volatility.