SELLING 40% of its gas stake to Osaka Gas of Japan for US$204 million (K494 million) was an important step for Horizon in realising value from its assets in Papua New Guinea.
Horizon announced in May last year it had entered into an agreement to sell 40% to Osaka for US$204 million, including US$74 million (K179 million) in cash on completion, a further US$130 million (K314.76 million) in cash upon flame ionisation detector (FID) for an LNG project, plus potential production payments where threshold condensate production is exceeded.
Osaka Gas’ experience as a participant in LNG projects, its LNG engineering capability and role added credibility to the venture.
Horizon chairman Fraser Ainsworth and chief executive Brent Emmett jointly mentioned in a statement that Horizon was seeing significant value from its asset portfolio in PNG.
According to its annual report, Horizon materially expanded its acreage holdings following notice of being awarded a 50% interest in a new licence PPL430 and the acquisition of 90% interests in PPLs 372 and 373.
Horizon’s revenue from operating activities in the last financial year was US$48.1 million (K116 million) compared to US$50.4 million (K122 million) in 2012.
Profit before income tax expense was US$10 million (K24 million) compared to US$23.7 million (K57 million) in 2012.
And net cash inflow from operating activities excluding general and administrative costs was US$22.3 million (K54 million) compared to US$21.1 million (K51 million) in 2012.
Horizon’s key objectives for its PNG assets over the next 18 months include:
Progress on sales of Stanley gas (in Western) to regional PNG consumers and larger scale gas commercialisation export plans;
Progress on Stanley PDL award an development executions; and
Progress on Elevala/ Ketu development planning among others.