Fund Manager Summary
The fund managers believe that the outlook for Horizon Oil Ltd remains positive, particularly following a recent rise in share price to approximately $0.18, driven by a strengthening oil market. In their opinion, Horizon's substantial interests in two conventional oil fields, notably in the Beibu Gulf and Maari, present significant opportunities. The Beibu Gulf field has consistently produced around 10k bopd for the past decade, with forecasts suggesting continued production for at least another six years. Meanwhile, Maari contributes 5k bopd with expected production for four more years. The fund managers highlight that after overcoming past challenges, including debt and corruption allegations, Horizon has returned over $150m to shareholders in the last three years, indicating strong financial recovery and potential for future growth.
Source: Trading View
Commentary From The Managers
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Samuel Terry Asset Management
31 Dec 2024
$0.19
Summary
- Horizon Oil is an ASX listed oil producer with minority interests in producing assets located in New Zealand and China.
- The company produces over 1.2 million barrels of oil per year at a break-even operating cost of less than USD 20 per barrel.
- Samuel Terry Asset Management acquired a block of unlisted options in May 2021 and now owns 20% of the company with Board representation.
- At the time of acquisition, Horizon had a poor track record of capital allocation and traded at a discount.
- The company has since begun returning capital to shareholders, streamlining management, and reducing costs.
- Horizon’s current strategy focuses on maximizing free cash flow, capital management, and investing in new business if exceptional.
- Horizon is well positioned to benefit from mid-term strength in oil prices, with no net debt and continued cash generation.
- The company currently trades at approximately 19 cents per share.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Samuel Terry Asset Management
31 Dec 2024
$0.19
- Horizon Oil is an ASX listed oil producer with minority interests in producing assets located in New Zealand and China.
- The company produces over 1.2 million barrels of oil per year at a break-even operating cost of less than USD 20 per barrel.
- Samuel Terry Asset Management acquired a block of unlisted options in May 2021 and now owns 20% of the company with Board representation.
- At the time of acquisition, Horizon had a poor track record of capital allocation and traded at a discount.
- The company has since begun returning capital to shareholders, streamlining management, and reducing costs.
- Horizon’s current strategy focuses on maximizing free cash flow, capital management, and investing in new business if exceptional.
- Horizon is well positioned to benefit from mid-term strength in oil prices, with no net debt and continued cash generation.
- The company currently trades at approximately 19 cents per share.
Summary
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.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
"It appears Horizon Oil is on a promising trajectory, transforming from troubled waters to a potential cash cow, as rising oil prices and robust production forecasts may signal a compelling opportunity for investors looking to capitalize on its resurgence."
Last Updated: 31 Dec 2024
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Frequently Asked Questions
Who is investing in Horizon Oil Ltd (ASX:HZN)?
Fund managers including Spheria Asset Management and Samuel Terry Asset Management have invested in Horizon Oil Ltd (ASX:HZN).
Why do fund managers invest in Horizon Oil Ltd?
Fund managers are investing in Horizon Oil Ltd due to its substantial interests in two productive oil fields, which have shown consistent output and promising forecasts. The company has demonstrated significant recovery from past challenges, including debt and corruption issues, leading to a notable increase in share price and substantial cash returns to shareholders. The strengthening oil market further supports the investment rationale.
What happened to Horizon Oil Ltd (ASX:HZN)?
There have been no recent updates from fund managers regarding Horizon Oil Ltd although fund managers including Spheria Asset Management and Samuel Terry Asset Management have previously commented.