ASX:HZN
Horizon Oil Ltd
Investment Summary
The fund managers believe that Horizon Oil Ltd (HZN.ASX) presents a compelling investment opportunity due to its recent performance and assets. They note that the share price rose by over 12% in September, driven by a strengthening oil price. Horizon Oil holds significant interests in two conventional oil fields, with the Beibu Gulf field off China producing around 10k barrels of oil per day and projected to maintain this level for at least another six years. The Maari field off New Zealand produces approximately 5k bopd with an expected production duration of four more years. The fund managers recall that when they first invested in HZN seven years ago, it was at 4c amidst financial and operational challenges. Now priced at 18c, Horizon Oil has successfully returned over $150m (9.5cps) to shareholders in the past three years. In their opinion, the company's recovery and growth trajectory make it a notable prospect for investors.
Commentary From The Managers
Spheria Asset Management
30 Sept 2023
$0.18
- Horizon Oil (HZN.ASX) share price rose over 12% in September due to a strengthening oil price.
- HZN has substantial interests in two conventional oil fields.
- The larger field is located in the Beibu Gulf (off China), producing approximately 10k barrels of oil per day (bopd) for the last ten years, with a forecast for at least six more years.
- The second field, Maari (off New Zealand), has produced around 5k bopd and is expected to produce at similar levels for another four years.
- Spheria Asset Management first acquired their position in HZN about seven years ago when it traded around 4c and faced debt issues and corruption allegations.
- HZN is now trading at 18c and has returned over $150m (9.5cps) of cash to shareholders over the last three years.
- Spheria Asset Management continues to hold because of HZN's positive production outlook and improved financials.
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.