Horizon Oil ((HZN)) has a number of assets in Papua New Guinea, including 50% and 45% stakes in PRL 4 and PRL 21 respectively. Macquarie had previously ascribed these stakes with a risked value of US$255 million.
The company has an agreement with major shareholder, IMC Investments, for a US$50m debt facility. This should provide the funds needed to redeem the remaining US$58.8m of convertible bonds, UBS contends.
Production in the December quarter was 35% above the prior quarter, driven by Beibu production close to the expected plateau rate of 15,000 bopd. Sales were up 17% but below the broker’s estimates because of lower lifting. Maari is now back on line and a significant March quarter is expected.
While June quarter production was largely as the broker had expected it notes scaling issues continue at the Maari project. This has impacted on earnings estimates but there is no change in price target.