Horizon Oil Limited (HZN), along with its Mereenie Joint Venture partners, has entered into a binding Letter of Intent (LOI) with the Northern Territory’s Power and Water Corporation (PWC). Horizon Oil is an Australian oil and gas exploration and production company with a focus on opportunities in the Asia-Pacific region. The agreement supports the immediate commencement of early works for an accelerated drilling program involving two new wells at the Mereenie gas field. It also aims to promptly document and execute gas supply agreements, aligning with conditional gas supply term sheets, to facilitate the sale of uncontracted firm gas production from Mereenie through to 2034.
The early works for the two-well drilling program will begin immediately, encompassing activities such as ordering long-lead items, advancing civil works, and selecting a drilling rig. Drilling is targeted to commence in mid-2026. The gas supply arrangements between the JVs and PWC have finalised ‘in-principle’ terms for long-term, firm gas supply under term sheets covering uncontracted firm gas production from the Mereenie field through to 2034, including output from the new wells. These term sheets are non-binding and conditional, pending final internal approvals from all JV participants and PWC.
The parties intend to formalise and execute binding Gas Sale Agreements (GSAs), consistent with these term sheets, by 20 February 2026. The LOI includes arrangements for the JVs to be reimbursed by PWC for costs related to the drilling program’s early works if binding GSAs are not executed by the specified date. According to the announcement, the intended supply arrangements are designed to quickly deliver significant new gas volumes to the Northern Territory, while enhancing gas supply security for customers throughout the region.
Horizon Oil holds a 25% interest in the Mereenie field. CEO Richard Beament stated that the LOI marks a major step in unlocking additional, reliable gas supply for the Northern Territory and increasing gas supply from the Amadeus Basin. By commencing early works now and targeting drilling in mid-2026, the company aims to bring new Mereenie volumes to market quickly, utilising existing field capacity. Formalising long-term GSAs consistent with the in-principle term sheets will underpin supply through to 2034, supporting the NT’s gas demand from the middle of next year.
