Australia’s Horizon Oil Snaps Up Exxon Mobil’s Thai Assets

Horizon Thailand Investments Pty Limited, a wholly subsidiary of Australia’s Horizon Oil Limited, has signed an agreement with US oil and gas major Exxon Mobil Corporation to acquire 7.5% stake in Sinphuhorm conventional gas and condensate field, and 60% interest in the Nam Phong conventional gas field in Thailand.

The acquisition is proposed through a consortium, with Horizon to acquire 75% of the shares in Exxon Mobil Exploration and Production Khorat Inc. (EMEPKI) with Matahio Energy acquiring the residual 25% and agreeing to manage EMEPKI employees and operatorship of the Nam Phong field on behalf of the consortium.

Horizon’s headline cash consideration for the 75% holding in EMEPKI is $30 million, with an effective date of 1 January 2025, plus up to $7.5 million in contingent payments over the next six years which are subject to certain conditions being met.

The upfront cash consideration will be substantially funded from a credit approved amendment to Horizon Oil’s existing Macquarie Bank debt facility which will provide additional debt capacity for the acquisition of up to approximately $22 million, with up to a further $10 million of finance made available following completion of the acquisition.

The funding structure, together with the expected free cash flow generation from Sinphuhorm and Nam Phong allows for the continuation of Horizon’s distribution strategy. The transaction remains subject to customary completion conditions.

Excellent Additions

Horizon CEO Richard Beament said that these assets were excellent additions to their portfolio – complementing, diversifying and expanding the company’s production base. These assets have the potential to allow Horizon to sustain production at current pre-acquisition levels through into the 2030s.

“In partnering with Matahio, we have structured the transaction to play to Horizon’s strengths as a non-operator, being also right sized, requiring minimal capital and with upside. We are delighted to have identified another inorganic growth opportunity which meets our strict investment criteria of acquiring assets which allow for the continuation of our capital distribution strategy,” he said.

He also said that they were delighted to partner with Matahio, an independent energy company focused on Southeast Asia and Australasia as Horizon’s teams were like minded and have collaborated extremely well over many months to bring this deal to a close.

Upon completion, the acquisition will increase Horizon’s net daily production by over 2,000 boe/d, and Proved and Probable (2P) reserves by 3.9 million barrels of oil equivalent as at 1 January 2025. This compares with Horizon Net Proved plus Probable reserves of 9.9 MMboe reported as of 30 June 2024.

The acquisition is expected to meaningfully increase net operating cash flow over the next 5+ years and provide a substantial production base beyond the end of the decade.

These assets provide Horizon Oil with further diversification into gas production in a country with growing gas demand. The power station using the gas from these fields has a key role in providing essential energy for domestic consumption in north-east Thailand and aiding the country to achieve its energy transition objectives.