Q4 2026 Horizon Oil Ltd Earnings Call

August 27, 2026

Speaker #1: Thank you for standing by, and welcome to the Horizon Oil FY26 full-year results webcast. Presenting today are Horizon's Chief Executive Officer, Richard Beamont, and Chief Financial Officer, Kyle Keane.

Operator: Thank you for standing by and welcome to the Horizon Oil FY2026 full year results webcast. Presenting today are Horizon's Chief Executive Officer, Richard Beament, and Chief Financial Officer, Kyle Keen. If you have any questions during today's webcast, please type your question in the ask a question box located under the webcast frame on your screen and click submit. The presenters will answer your questions at the conclusion of the presentation. I would now like to hand you over to Richard.

Speaker #1: If you have any questions during today's webcast, please type your question in the Ask a Question box located under the webcast frame on your screen and click Submit.

Speaker #1: The presenters will answer your questions at the conclusion of the presentation. I'd now like to hand you over to Richard.

Speaker #2: Well, Luke, thanks very much, and good morning, everyone. Look, FY26 resets Horizon's scale and cash flow base. The business now operates from a larger, more diversified platform than this time last year.

Richard Beament: Well, look, thanks very much and good morning, everyone. Look, FY2026 resets Horizon's scale and cash flow base. The business now operates from a larger, more diversified platform than this time last year. We delivered record production and record sales. Thailand is contributing low-cost cash flow, and the Cue acquisition expands Horizon into a broader five-country Asia Pacific platform. We achieved that growth while continuing to deliver shareholder returns and maintain a strong balance sheet. This morning, I am going to start with a strategic overview, and then Kyle will take you through the financial results before I will return to cover the asset portfolio, the outlook, and the near-term value runway before we open up to questions. Look, before we begin, I will draw you to the customary compliance statement, which I encourage you all to read in full.

Speaker #2: We delivered record production and record sales. Thailand is contributing low-cost cash flow, and the Q acquisition expands Horizon into a broader, five-country Asia-Pacific platform.

Speaker #2: We achieved that growth while continuing to deliver shareholder returns and maintain a strong balance sheet. This morning, I'm going to start with the strategic overview, and then Kyle will take you through the financial results.

Speaker #2: Before I'll return to cover the asset portfolios, the outlook, and near-term value and the near-term value runway, before we open up for questions. So, look, before we begin, I'll draw you to the customer compliance statement, which I encourage you all to read in full.

Speaker #2: It includes the usual cautionary statements, as the presentation contains forward-looking statements, financial measures which are not prescribed by Australian accounting standards, and reserves and resources information.

Richard Beament: It includes the usual cautionary statements as the presentation includes forward-looking statements, financial measures which are not prescribed by Australian Accounting Standards and reserves and resources information. I also note that all references to dollars are USD unless otherwise stated. At a glance, Horizon is now a diversified, cash-generative Asia Pacific oil and gas producer with producing assets across Thailand, Indonesia, Australia, New Zealand and China. That five-country footprint supports a more resilient production and cash flow base. FY2026 net production reached a record 2.15 million barrels of oil equivalent, and following the Cue acquisition, current Horizon Group production is approximately 7,300 barrels of oil equivalent per day. The portfolio is broader and longer dated, with 13.6 million barrels of 2P reserves and 19.8 million barrels of 2C contingent resources at 30 June.

Speaker #2: I also note that all references to dollars are US dollars unless otherwise stated. So, at a glance, Horizon is now a diversified, cash-generative Asia-Pacific oil and gas producer, with producing assets across Thailand, Indonesia, Australia, New Zealand, and China.

Speaker #2: That five-country footprint supports a more resilient production and cash flow base. FY26 net production reached a record 2.15 million barrels of oil equivalent, and, following the Q acquisition, current Horizon Group production is approximately 7,300 barrels of oil equivalent per day.

Speaker #2: The portfolio is broader and longer-dated, with 13.6 million barrels of 2P reserves and 19.8 million barrels of 2C contingent resources as at 30 June.

Speaker #2: The investment proposition is deliberately simple: reliable production, low operating costs, strong cash generation, disciplined reinvestment, and shareholder returns. Now, turning to a map of the new portfolio, which is important because it clearly shows that Horizon is no longer a narrow one- or two-asset story.

Richard Beament: The investment proposition is deliberately simple. Reliable production, low operating costs, strong cash generation, disciplined reinvestment, and shareholder returns. Turning to a map of the new portfolio, which is important because it clearly shows that Horizon is no longer a narrow one or two-asset story. Today, we have a portfolio spanning five countries and nine producing assets, with each region playing a clear role. Thailand provides low-cost, oil-linked domestic gas cash flow. China and Maari provide established offshore oil exposure. Australia provides strategically important domestic gas through Mereenie, Palm Valley, and Dingo. Indonesia adds near-term oil growth at Mahato and disciplined gas exposure at Sampang. The benefit is practical diversification, commodity exposure, market structure, asset maturity, and opportunity type. That mix improves portfolio resilience and gives Horizon multiple ways to sustain production and cash flow over time. This is the investment highlights of FY2026.

Speaker #2: Today, we have a portfolio spanning five countries and nine producing assets, with each region playing a clear role. Thailand provides low-cost, oil-linked domestic gas cash flow; China and Maari provide established offshore oil exposure; Australia provides strategically important domestic gas through Mereenie, Palm Valley, and Dingo; Indonesia adds near-term oil growth at Mataram, and disciplined gas exposure at Sampang.

Speaker #2: The benefit is practical diversification: commodity exposure, market structure, asset maturity, and opportunity type. That mix improves portfolio resilience and gives Horizon multiple ways to sustain production and cash flow over time.

Speaker #2: So, this is the investment highlights of FY26. As I mentioned, record production of 2.15 million barrels of oil equivalent, record sales of 1.98 million barrels of oil equivalent, underlying revenue of 107.2 million US dollars, EBITDAX of 56.4 million US dollars, and an ending cash position of 37.4 million US dollars.

Richard Beament: As I mentioned, record production of 2.15 million barrels of oil equivalent. Record sales of 1.98 million barrels of oil equivalent. Underlying revenue of USD 107.2 million. EBITDAX of USD 56.4 million and an ending cash position of USD 37.4 million. Those numbers show a business generating cash while funding investment activity and shareholder returns. Thailand contributed approximately USD 23 million of underlying revenue and has very quickly validated the strategic rationale for that acquisition. At the same time, Cue adds scale and a larger opportunity set from FY2027 onwards rather than being the driver of the FY2026 result. We also declared 2.5 Australian cents per share of dividends in FY2026 and closed the year with only modest net debt. That is the capital allocation balance we are executing. Returns to shareholders, selective reinvestment, and balance sheet flexibility.

Richard Beament: As I mentioned, record production of 2.15 million barrels of oil equivalent. Record sales of 1.98 million barrels of oil equivalent. Underlying revenue of USD 107.2 million. EBITDAX of USD 56.4 million and an ending cash position of USD 37.4 million. Those numbers show a business generating cash while funding investment activity and shareholder returns. Thailand contributed approximately USD 23 million of underlying revenue and has very quickly validated the strategic rationale for that acquisition. At the same time, Cue adds scale and a larger opportunity set from FY2027 onwards rather than being the driver of the FY2026 result. We also declared AUD 0.025 Australian cents per share of dividends in FY2026 and closed the year with only modest net debt. That is the capital allocation balance we are executing. Returns to shareholders, selective reinvestment, and balance sheet flexibility.

Speaker #2: Those numbers show a business generating cash while funding investment activity and shareholder returns. Thailand contributed approximately $23 million of underlying revenue, and has very quickly validated the strategic rationale for that acquisition.

Speaker #2: At the same time, Q adds scale and a larger opportunity set from FY27 onwards, rather than being the driver of the FY26 result. We also declared 2.5 Australian cents per share of dividends in FY26, and closed the year with only modest net debt.

Speaker #2: That is the capital allocation balance we are executing: returns to shareholders, selective reinvestment, and balance sheet flexibility. So, on ESG, the key message is that safety and responsible operations remain central to how we run the business.

Richard Beament: On ESG, the key message is that safety and responsible operations remain central to how we run the business. Safety performance remained better than industry benchmarks across the portfolio. We progressed our sustainability strategy and FY2027 goals, and we integrated the Thailand assets into Horizon's ESG governance and reporting framework. We also continued practical emissions and efficiency initiatives, including the Maari Vapor Recovery Unit and energy efficiency work at Nam Phong. As the portfolio grows, we are keeping the same disciplined approach to safety, governance, and stakeholder engagement. This slide brings together what strategy delivery looks like for Horizon. Maximize cash flow, reinvest for growth, and return capital. On cash flow, FY2026 operating cash flow was 32% higher at USD 47.2 million, supported by record production and cash operating costs being maintained below USD 25 per barrel of oil equivalent.

Speaker #2: Safety performance remained better than industry benchmarks across the portfolio. We progressed our sustainability strategy and FY27 goals, and we integrated the Thailand assets into Horizon's ESG governance and reporting framework.

Speaker #2: We also continued practical emissions and efficiency initiatives, including the Maari vapour recovery unit and energy efficiency work at Nampong. As the portfolio grows, we are keeping the same disciplined approach to safety, governance, and stakeholder engagement.

Speaker #2: Now, this slide brings together what strategy delivery looks like for Horizon: maximize cash flow, reinvest for growth, and return capital. On cash flow, FY26 operating cash flow was 32% higher at $47.2 million, supported by record production and cash operating costs being maintained below $25 per barrel of oil equivalent.

Speaker #2: On returns, we paid $33.1 million US dollars to shareholders during the year and declared FY26 dividends of 2.5 Australian cents per share. On growth, we integrated Thailand and acquired a 57.03% controlling interest in Q, expanding Horizon to nine producing assets across five countries.

Richard Beament: On returns, we paid USD 33.1 million to shareholders during the year and declared FY2026 dividends of 2.5 Australian cents per share. On growth, we integrated Thailand and acquired a 57.03% controlling interest in Cue, expanding Horizon to nine producing assets across five countries. Importantly, dividends were balanced with debt repayment and disciplined investment in organic and inorganic growth. The point I would emphasize is that Horizon is growing through assets that generate cash and opportunities that compete for capital. We are not pursuing scale for its own sake. We are building a stronger regional energy business with a clear return discipline. Turning to reserves and resources, FY2026 was a very strong year for portfolio depth and growth. Net 2P reserves increased 51% from 9 million barrels of oil equivalent to 13.6 million barrels. Net 2C contingent resources increased 61% to 19.8 million barrels of oil equivalent.

Speaker #2: Importantly, dividends were balanced with debt repayment, and disciplined investment in organic and inorganic growth. The point I would emphasise is that Horizon is growing through assets that generate cash and opportunities that compete for capital.

Speaker #2: We're not pursuing scale for its own sake. We're building a stronger regional energy business with a clear return discipline. Turning to reserves and resources, FY26 was a very strong year for portfolio depth and growth.

Speaker #2: Net 2P reserves increased 51%, from 9 million barrels of oil equivalent to 13.6 million barrels. Net 2C contingent resources increased 61%, to 19.8 million barrels of oil equivalent.

Speaker #2: The increases were driven primarily by Thailand and by Q, and the group delivered around 200% reserve replacement after record production of 2.1 million barrels during the year.

Richard Beament: The increases were driven primarily by Thailand and by Cue, and the group delivered around 200% reserve replacement after record production of 2.1 million barrels during the year. The importance is straightforward. Horizon increased production, scale, and resource depth in the same year. That creates a stronger platform for future cash generation and a broader set of organic opportunities and options to pursue selectively. With that, I would like to hand over to Kyle to take you through the financial results in more detail.

Speaker #2: The importance is straightforward. Horizon increased production, scale, and resource depth in the same year. That creates a stronger platform for future cash generation and a broader set of organic opportunities and options to pursue selectively.

Speaker #2: So, with that, I'd like to hand over to Kyle to take you through the financial results in more detail.

Speaker #3: Thanks, Richard. I'll now step through the 2026 financial year results and the cash flow performance of the group. As always, we'll reference this to United States dollars unless otherwise stated.

Kyle Keen: Thanks, Richard. I will now step through the 2026 financial year results and the cash flow performance of the group. As always, all references are to United States dollars unless otherwise stated. 2026 delivered a strong financial result with record production and sales volumes supported by the successful integration of the Thailand assets. Production increased to 2.15 million barrels of oil equivalent and sales volumes increased to 1.98 million barrels of oil equivalent. Underlying revenue was $107.2 million, broadly in line with the comparative period. That result was supported by the 11-month contribution from Thailand, and it is also worth noting that due to the timing of liftings from both Maari and Block 22/12, approximately 130,000 barrels of crude oil inventory were on hand at 30 June 2026. This inventory was sold through early in 2027, generating further revenues in excess of $10 million.

Speaker #3: 2026 delivered a strong financial result, with record production and sales volumes supported by the successful integration of the Thailand assets. Production increased to 2.15 million barrels of oil equivalent, and sales volumes increased to 1.98 million barrels of oil equivalent.

Speaker #3: Underlying revenue was $107.2 million, broadly aligned with the comparative period. That result was supported by the 11-month contribution from Thailand, and it is also worth noting that, due to the timing of liftings from both Māori and Block 2212, approximately 130,000 barrels of crude oil inventory were on hand at 30 June 2026. This inventory was sold through early in 2027, generating further revenues in excess of $10 million.

Speaker #3: EBITDAX increased to 56.4 million dollars, and cash flow from operating activities increased by 32% to 47.2 million dollars. At year-end, Horizon held 37.4 million dollars in cash, and net debt was a modest 11.3 million dollars, after returning 33.1 million dollars to shareholders during the year.

Kyle Keen: EBITDAX increased to $56.4 million and cash flow from operating activities increased by 32% to $47.2 million. At year-end, Horizon Oil held $37.4 million in cash, and net debt was a modest $11.3 million, after returning $33.1 million to shareholders during the year. The cash flow waterfall illustrates the strength of the underlying business and how the cash generated over the financial year has been deployed. Operating cash flow of $47.2 million funded the $33.1 million paid to shareholders during the year, $10.6 million of debt repayments, and the targeted investment in the producing asset base. At the same time, the group funded the Thailand and Cue Energy Resources acquisitions in a capital-efficient manner and closed the year with substantial liquidity. Cash generation is supporting all three priorities at once, dividends, debt reduction, and organic growth across the portfolio.

Speaker #3: The cash flow waterfall illustrates the strength of the underlying business, and how the cash generated over the financial year has been deployed. Operating cash flow, 47.2 million dollars, funded the 33.1 million dollars pay to shareholders during the year, 10.6 million dollars of debt repayments, and the targeted investment in the producing asset base.

Speaker #3: At the same time, the group funded the Thailand and Q acquisitions in a capital-efficient manner and closed the year with substantial liquidity. Cash generation is supporting all three priorities at once.

Speaker #3: Dividends, debt reduction, and organic growth across the portfolio. This is an important feature of the business model, particularly as their large portfolio gives us more organic growth options to selectively fund.

Kyle Keen: This is an important feature of the business model, particularly as the enlarged portfolio gives us more organic growth options to selectively fund. Looking at production, sales, and revenue over the five-year period, FY26 clearly shows the effect of the Thailand acquisition on the portfolio. Production was up 33% and sales were up 22% in the comparative period, with Thailand's 11-month contribution more than offsetting natural decline across the portfolio. Revenue was resilient despite the timing of crude oil liftings, which, as discussed earlier, crude oil inventory on hand at the end of the year generated further revenues of over $10 million in early 2027. It is also worth noting that the decline in the net realized sales price, as depicted by the line on the profit chart, is a direct result of the introduction of gas into the portfolio following the Mereenie and Thailand acquisitions.

Speaker #3: Looking at production, sales, and revenue over the five-year period, FY26 clearly shows the effect of the Thailand acquisition on the portfolio. Production was up 33%, and sales were up 22% in the comparative period, with Thailand's 11-month contribution more than offsetting natural decline across the portfolio.

Speaker #3: Revenue was resilient, despite the timing of crude oil liftings, which, as discussed earlier, left crude oil inventory on hand at the end of the year. This inventory generated further revenues of over $10 million in early 2027.

Speaker #3: It's also worth noting that the decline in the net realized sales price, as depicted by the line on the profit chart, is a direct result of the introduction of gas into the portfolio following the Marini and Thailand acquisitions.

Speaker #3: The next slide shows continued profitability and the importance of cost discipline. EBITDAX remains strong at $56.4 million, notwithstanding the deferred liftings. Cash operating costs were approximately $21 per barrel of oil equivalent, which remains a core part of the group's cash generation capability.

Kyle Keen: The next slide shows continued profitability and the importance of cost discipline. EBITDAX remains strong at $56.4 million, notwithstanding the deferred liftings. Cash operating costs were approximately $21 per barrel of oil equivalent, which remains a core part of the group's cash generation capability. Statutory profit after tax was $11.1 million. The movement from EBITDAX to statutory profit reflects expected non-cash charges, most notably the $32.2 million of amortization expense for the financial year. From a cash perspective, the operating margin remains resilient. Free cash flow increased approximately $15 million to $36.6 million for the year, driven not only by the Thailand acquisition, but also disciplined investments in our low-cost producing assets. The chart on the right is also important. Despite the Thailand and Cue Energy Resources acquisitions, which were largely debt-funded, and the substantial shareholder distributions made during the year, net debt at 30 June was a modest $11.3 million.

Speaker #3: Statutory profit after tax was $11.1 million. The movement from EBITDAX to statutory profit reflects expected non-cash charges, most notably the $32.2 million of amortization expense for the financial year.

Speaker #3: From a cash perspective, the operating margin remains resilient. Free cash flow increased approximately $15 million to $36.6 million for the year, driven not only by the Thailand acquisition but also by disciplined investments in our low-cost producing assets.

Speaker #3: The chart on the right is also important. Despite the Thailand and Q acquisitions, which were largely debt-funded, and the substantial shareholder distributions made during the year, net debt at 30 June was a modest $11.3 million.

Speaker #3: Cumulative distributions paid to shareholders now exceed $180 million US dollars, or approximately $270 million Australian dollars. That record demonstrates that shareholder returns have not been incidental to strategy.

Kyle Keen: Cumulative distributions paid to shareholders now exceed $180 million US, or approximately AUD 270 million. That record demonstrates that shareholder returns have not been incidental to strategy. They have been a central part of it. This final slide reinforces the longer-term consistency of the business. Across the period, Horizon has generated strong EBITDAX, maintained a low operating cost base, paid meaningful dividends, and retained balance sheet flexibility. The 2026 financial year continues that pattern, but with a larger and more diversified production platform. In summary, the financial year result shows a business that is cash generative, disciplined, and positioned to fund both returns and growth. With that, I will hand back to Richard to take you through the asset portfolio and outlook for the company.

Speaker #3: They have been a central part of it. This final slide reinforces the longer-term consistency of the business. Across the period, Horizon has generated strong EBITDAX, maintained a low operating cost base, paid meaningful dividends, and retained balance sheet flexibility. The 2026 financial year continues that pattern, but with a larger and more diversified production platform.

Speaker #3: In summary, the financial year result shows a business that is cash-generative, disciplined, and positioned to fund both returns and growth. With that, I will hand back to Richard to take you through the asset portfolio and outlook for the company.

Speaker #2: Thanks, Kyle. So, look, I'll now turn to the large portfolio and the near-term activity across the asset base, starting with Thailand. Thailand is the clearest example of the FY26 transformation, with our acquisition completing on the 1st of August last year.

Richard Beament: Thanks, Kyle. Look, I will now turn to the large portfolio and the near-term activity across the asset base, starting with Thailand. Thailand is the clearest example of the FY26 transformation, with our acquisition completing on 1 August last year. Since completion, the Nam Phong and Sin Phu Horm gas fields have quickly become material cash flow contributors, supported by low cash operating costs, long-term gas sales arrangements, and oil-linked pricing. The assets are currently contributing net production to Horizon of around 2,100 barrels of oil equivalent per day, with the assets supplying essential domestic gas into Northeast Thailand. That is strategically important. These fields support the Nam Phong Power Plant, which supplies around 20% of Northeast Thailand's electricity demand. The near-term focus is deliverability. At Nam Phong, booster compression is aimed at increasing and stabilizing production.

Richard Beament: Thanks, Kyle. Look, I will now turn to the large portfolio and the near-term activity across the asset base, starting with Thailand. Thailand is the clearest example of the FY26 transformation, with our acquisition completing on 1st of August last year. Since completion, the Nam Phong and Sin Phu Horm gas fields have quickly become material cash flow contributors, supported by low cash operating costs, long-term gas sales arrangements, and oil-linked pricing. The assets are currently contributing net production to Horizon of around 2,100 barrels of oil equivalent per day, with the assets supplying essential domestic gas into Northeast Thailand. That is strategically important. These fields support the Nam Phong Power Plant, which supplies around 20% of Northeast Thailand's electricity demand. The near-term focus is deliverability. At Nam Phong, booster compression is aimed at increasing and stabilizing production.

Speaker #2: Since completion, the Namphong and Simplehorn gas fields have quickly become material cash flow contributors, supported by low cash operating costs, long-term gas sales arrangements, and oil-linked pricing.

Speaker #2: The assets are currently contributing net production to Horizon of around 2,100 barrels of oil equivalent per day, with the assets supplying essential domestic gas into northeast Thailand.

Speaker #2: That is strategically important. These fields support the Nam Phong Power Station, which supplies around 20% of Northeast Thailand's electricity demand. The near-term focus is deliverability; at Nam Phong, booster compression is aimed at increasing and stabilizing production.

Speaker #2: At Simplehorn, the mini-booster water shutoff work and Pad Dee tie-in are all about adding capacity and reducing decline. Just last week, the venture achieved a significant milestone with the early completion and commissioning of the Pad Dee tie-in, with production boosted by the PH-14 and PH-1 wells.

Richard Beament: At Sin Phu Horm, the mini booster, water shut off work, and Pad D tie-in are all about adding capacity and reducing decline. Just last week, the venture achieved a significant milestone with the early completion and commissioning of the Pad D tie-in, with the production boosted by the PH-14 and PH-1 wells. This has seen an immediate lift in field production rates by well over 10% to sustained rates of over 107 million standard cubic feet per day. The result is Horizon net production from Thailand increasing from around 1,900 barrels of oil equivalent per day in the last quarter to around 2,100 barrels of oil equivalent per day recently. This is before the Nam Phong booster compressor is commissioned next month. The bigger point is that Thailand is a low-cost, infrastructure-backed gas platform with reserves, resources, and a clear project set that supports cash flow over time.

Speaker #2: This has resulted in an immediate increase in field production rates by well over 10%, reaching sustained rates of over 107 million standard cubic feet per day.

Speaker #2: The result is Horizon net production from Thailand increasing from around 1,900 barrels of oil equivalent per day in the last quarter to around 2,100 barrels of oil equivalent per day recently.

Speaker #2: And this is before the Namphong booster compressor is commissioned next month. The bigger point is that Thailand is a low-cost, infrastructure-backed gas platform with reserves, resources, and a clear project set that supports cash flow over time.

Speaker #2: So, Indonesia comes into the portfolio through Q, and gives us two different asset roles. Mahato is the near-term oil growth asset. It is producing from a proven basin, with current activity involving two approved infill wells at the Bekasap field.

Richard Beament: Indonesia comes into the portfolio through Cue and gives us two different asset roles. Mahato is the near-term oil growth asset. It is producing from a proven basin with current activity involving two approved infill wells at the Bekasap field. The PB-41 well has already been successfully completed and brought onto production, and a second well, PB-42, recently spud. The operator is also progressing the OPL-3 Phase 3 development plan and a high-impact exploration well, the GA-1 well. Sampang plays a different role. It is a mature gas asset focused on production optimization through compression and disciplined management through to the end of the PSC. Together, Indonesia adds activity, optionality, and another source of portfolio diversification. The Australian Amadeus Basin assets strengthen Horizon's domestic gas position. Mereenie, Palm Valley, and Dingo are established fields tied into regional infrastructure, serving Northern Territory linked and East Coast markets.

Speaker #2: The PB-41 well has already been successfully completed and brought onto production, and a second well, PB-42, was recently spud. The operator is also progressing the OPL 3 Phase 3 development plan and a high-impact exploration well, the GA-1 well.

Speaker #2: Sampang plays a different role. It's a mature gas asset focused on production optimization through compression and disciplined management through to the end of the PSC.

Speaker #2: Together, Indonesia adds activity, optionality, and another source of portfolio diversification. Now, the Australian Amadeus Basin assets strengthen Horizon's domestic gas position. Mereenie, Palm Valley, and Dingo are established fields tied into regional infrastructure, serving Northern Territory–linked and East Coast markets.

Speaker #2: These are strategically relevant assets, because domestic gas remains important for reliability and energy security. Together, these fields currently supply about 30% to 40% of the Northern Territory's domestic gas demand.

Richard Beament: These are strategically relevant assets because domestic gas remains important for reliability and energy security. Together, these fields currently supply about 30% to 40% of Northern Territory's domestic gas demand. Mereenie continues to provide stable production and cash flow with a development review progressing to assess future well opportunities. Palm Valley adds a near-term catalyst with PV-14 underway and PV-15 to follow, both designated to evaluate and develop additional gas resources to be sold into a long-term gas sales agreement with the Northern Territory Government all the way through to 2034. Dingo provides contracted gas exposure into the local Alice Springs power market. This is a clear example of the enlarged portfolio, stable base cash flow, existing infrastructure, and a practical pathway to future gas supply growth. Turning to Maari, this remains an established offshore oil cash flow asset and one that we know very, very well.

Speaker #2: Marini continues to provide stable production and cash flow, with a development review progressing to assess future well opportunities. Palm Valley adds a near-term catalyst, with PV-14 underway and PV-15 to follow, both designated to evaluate and develop additional gas resources to be sold into a long-term gas sales agreement with the Northern Territory Government, all the way through to 2034.

Speaker #2: Dingo provides contracted gas exposure into the local Alice Springs power market. This is a clear example of the enlarged portfolio, stable-based cash flow, existing infrastructure, and a practical pathway to future gas supply growth.

Speaker #2: So, turning to Murray, this remains an established offshore oil cash flow asset, and one that we know very, very well. The recent 10-year permit extension to 2037, awarded earlier in this financial year, is important because it provides the runway for continued production, further optimization, infill maturation, and orderly long-term planning.

Richard Beament: The recent 10-year permit extension to 2037, awarded earlier in this financial year, is important because it provides the runway for continued production, further optimization, infill maturation, and orderly long-term planning. Operationally, the near-term focus has been on the MR3 workover, which was successfully returned to production just a few weeks ago, ongoing reservoir management, and studies to mature future infill candidates. Maari has benefited from sustained water injection and active reservoir management, and the Cue transaction increases our effective exposure to that cash flow stream. Maari continues to play a clear role in the portfolio, established offshore oil production, cash generation, and future optionality. Lastly, but certainly not least, our Block 22/12 asset in China. China remains a reliable offshore oil contributor and a core part of Horizon's cash flow base. Block 22/12 continues to provide material production with low cash operating costs.

Speaker #2: Operationally, the near-term focus has been on the MR3 workover, which was successfully returned to production just a few weeks ago, ongoing reservoir management, and studies to mature future infill candidates.

Speaker #2: Murray has benefited from sustained water injection and active reservoir management, and the Q transaction increases our effective exposure to that cash flow stream. So, Murray continues to play a clear role in the portfolio: established offshore oil production, cash generation, and future optionality.

Speaker #2: And lastly, but certainly not least, our Block 2212 asset in China—China remains a reliable offshore oil contributor, and a core part of Horizon's cash flow base.

Speaker #2: Block 2212 continues to provide material production with low cash operating costs. Current gross production is around 7,400 barrels of oil per day, or around 2,000 barrels per day net to Horizon, following positive results from recent workover activity.

Richard Beament: Current gross production is around 7,400 barrels of oil per day or around 2,000 barrels per day net to Horizon, following positive results from recent workover activity. The focus is optimization-led performance, workovers, facility reliability, water handling improvements, and targeted water injection to support production rates. The 12-8 East phase 2 studies also provide additional optionality. What does all this equate to at a consolidated production level? This production outlook slide shows the shape of the portfolio transformation with a look back over the past 5 years and the buildup of the production platform since 2024 through the acquisitions of Mereenie, Thailand, and now Cue. The result is a materially larger and longer-dated asset base with organic growth potential extending well into the next decade. This is an indicative outlook only, and future projects clearly remain subject to usual technical, commercial, joint venture, and regulatory approvals.

Speaker #2: The focus is optimization-led performance, workovers, facility reliability, water handling improvements, and targeted water injection to support production rates. The 128 East Phase 2 studies also provide additional optionality.

Speaker #2: So, look, what does all this equate to at a consolidated production level? This production outlook slide shows the shape of the portfolio transformation, with a look back over the past five years, and the buildup of the production platform since 2024 through the acquisitions of Marini, Thailand, and now Q.

Speaker #2: The result is a materially larger and longer-dated asset base, with organic growth potential extending well into the next decade. This is indicative outlook only, and future projects clearly remain subject to the usual technical, commercial, joint venture, and regulatory approvals.

Speaker #2: The strategic message, though, is that Horizon now has multiple ways to sustain and grow production, rather than relying on a single large project. That improves cash flow visibility and capital allocation flexibility.

Richard Beament: The strategic message, though, is that Horizon now has multiple ways to sustain and grow production rather than relying on a single large project. That improves cash flow visibility and capital allocation flexibility. We can sequence activity across the portfolio and fund the opportunities that offer the best risk-adjusted returns. This slide brings together the near-term activity set across the enlarged portfolio. As you can see, it is an intense period of activity. In Thailand, we have compression. Pad D now delivering and a potential infill drilling program early in the new year. In Indonesia, Mahato has infill drilling underway, the OPL-3 development planning and exploration activity. In Australia, Mereenie and Palm Valley provide further gas development and appraisal opportunities. At Maari, we are maturing infill opportunities. In China, we have workovers, liquids handling improvements, and the 12-8E studies. The common theme is infrastructure-led, approval-gated growth.

Speaker #2: We can sequence activity across the portfolio and fund the opportunities that offer the best risk-adjusted returns. So, this slide brings together the near-term activity set across the enlarged portfolio, and as you can see, it's an intense period of activity.

Speaker #2: In Thailand, we have compression and Pad D now delivering, with a potential infill drilling program early in the new year. In Indonesia, Mahato has infill drilling underway.

Speaker #2: The OPL 3 development, planning, and exploration activity. In Australia, Marini and Palm Valley provide further gas development and appraisal opportunities. At Murray, we're maturing infill opportunities, and in China, we have workovers, liquids handling improvements, and the 128 East studies.

Speaker #2: The common theme is infrastructure-led, approval-gated growth. These opportunities sit around assets and markets we understand, and they are designed to enhance production reliability and cash flow.

Richard Beament: These opportunities sit around assets and markets we understand, and they are designed to enhance production, reliability, and cash flow. The strategic advantage is the breadth of the opportunity set. We are not dependent on one project, one country, or one commodity exposure to create value. To close, the investment case for Horizon is stronger and clearer than it was a year ago. First, scale. Horizon is now a five-country Asia Pacific producer with nine producing assets and current production of approximately 7,300 barrels of oil equivalent per day. Second, cash generation. The portfolio combines stable oil production, long-term gas sales contracts, low operating costs, and a larger reserves and resources base. Third, shareholder returns. Horizon has paid or declared more than AUD 290 million to shareholders over the past six years.

Speaker #2: The strategic advantage is the breadth of the opportunity set. We are not dependent on one project, one country, or one commodity exposure to create value.

Speaker #2: And so, to close, the investment case for Horizon is stronger and clearer than it was a year ago. First, scale: Horizon is now a five-country Asia-Pacific producer, with nine producing assets and current production of approximately 7,300 barrels of oil equivalent per day.

Speaker #2: Second, cash generation. The portfolio combines stable oil production, long-term gas sales contracts, low operating costs, and a larger reserves and resources base. Third, shareholder returns.

Speaker #2: Horizon has paid or declared more than $290 million Australian dollars to shareholders over the past six years, and with the 1 cent per share final dividend declared and to be paid for FY26, we have now averaged annual distributions of 3 Australian cents per share for six consecutive years.

Richard Beament: With the AUD 0.01 per share final dividend declared and to be paid for FY2026, we have now averaged annual distributions of AUD 0.03 per share for six consecutive years. Needless to say, dividends and distributions remain a priority. Fourth, opportunity set. We now have multiple infrastructure-led growth options across Thailand, Indonesia, Australia, New Zealand, and China, rather than dependence on a single project. Finally, discipline. We are allocating capital carefully, maintaining balance sheet flexibility, and focusing on opportunities that enhance cash flow and long-term value. The enlarged Horizon gives us more options, and the return discipline remains the same. Look, thank you for your time this morning and your continued interest in Horizon. FY2026 has reset the scale of the business, strengthened the cash flow base, and expanded the opportunity set. We look forward to updating shareholders as we progress activity across the portfolio.

Speaker #2: Needless to say, dividends and distributions remain a priority. Fourth, opportunity set: we now have multiple infrastructure-led growth options across Thailand, Indonesia, Australia, New Zealand, and China, rather than dependence on a single project.

Speaker #2: And finally, discipline. We are allocating capital carefully, maintaining balance sheet flexibility, and focusing on opportunities that enhance cash flow and long-term value. The enlarged Horizon gives us more options.

Speaker #2: And the return discipline remains the same. So, look, thank you for your time this morning and your continued interest in Horizon. FY26 has reset the scale of the business, strengthened the cash flow base, and expanded the opportunity set, and we look forward to updating shareholders as we progress activity across the portfolio.

Speaker #2: And with that, Kyle and I would be pleased to take any questions that you might have.

Richard Beament: With that, Kyle and I would be pleased to take any questions that you might have.

Speaker #1: Thank you. Once again, if you enter your question into the Ask a Question box under the webcast frame and click Submit, I'll now hand over for any webcast questions to be addressed.

Operator: Thank you. Once again, if you would like to ask a question, please type your question into the Ask a Question box under the webcast frame and click Submit. I will now hand over for any webcast questions to be addressed.

Speaker #3: Thank you very much. We've had a number of questions regarding the dividend. We note that the interim dividend was 1.5 cents, and the final dividend is 1 cent.

[Company Representative] (Horizon Oil): Thank you very much. We have had a number of questions regarding the dividend. We note that the interim dividend was 1.5 cents, and the final dividend is 1 cent. Can you please provide some context as to the final dividend?

[Company Representative] (Horizon Oil Ltd): Thank you very much. We have had a number of questions regarding the dividend. We note that the interim dividend was AUD 0.015, and the final dividend is AUD 0.01. Can you please provide some context as to the final dividend?

Speaker #3: Can you please provide some context as to the final dividend?

Speaker #2: Look, I'll take that one. Sure. First of all, let me just reaffirm that dividends remain a priority for the company. But, as noted in one of the slides, we're in a period where we have some fairly intense activity going on right across the portfolio.

Richard Beament: Well, I will take that one. Look, first of all, let me just reaffirm that dividends remain a priority for the company. As noted in one of the slides, we are in a period where we have some fairly intense activity going on right across the portfolio. As we sit here today, we have five wells either in the process of being drilled or committed to be drilled over the next 6 months. Then we have a further three development wells, which are looking highly likely to be drilled in Sin Phu Horm early in the new year. In addition to that, we have added booster compression in Sin Phu Horm. We have another booster compressor going in in Nam Phong next month. In Sampang as well, there is another compression facility. On top of that, we have had the Pad D tie-in works and indeed in Block 22/12, some workover activity.

Speaker #2: As we sit here today, we've got five wells either in the process of being drilled or committed to be drilled over the next six months, and then we've got a further three development wells which are looking highly likely to be drilled in December or early in the new year.

Speaker #2: In addition to that, we've added booster compression in Simple Horn. We've got another booster compressor going in at Nampong next month. And in Sampang as well, there's another compression facility.

Speaker #2: On top of that, we've had the Pad D tie-in works and, indeed, in Block 2212, some workover activity. So, I guess there's a strong draw on capital for all of those activities, but they're highly accretive.

Richard Beament: I guess there is a strong draw on capital for all of those activities, but they are highly accretive. I guess what we are trying to do here is balance all the competing needs between organic growth, returns to shareholders, and indeed managing debt levels. Safe to say, the focus is on long-term cash flow deliverability for the longer term. Obviously, we have had the inorganic growth activities as well throughout the year. I can see there is another question here which dovetails with this around managing debt levels and are you comfortable with the net debt level gradually increasing? I think modest levels of net debt for the company at the stage it is at is fine. You need to acknowledge we have a much broader and longer-dated production platform, and they are all cash-generative assets.

Speaker #2: And I guess what we're trying to do here is balance all the competing needs between organic growth, returns to shareholders, and, indeed, managing debt levels.

Speaker #2: And it's safe to say the focus is on long-term cash flow deliverability for the longer term, and obviously, we've had the inorganic growth activities as well throughout the year.

Speaker #2: I can see there's sort of another question here which sort of dovetails with this around managing sort of debt levels and are you comfortable with the net debt level sort of gradually increasing.

Speaker #2: Look, I think modest levels of net debt for the company, at the stage it's at, is fine. You need to acknowledge we have a much broader and longer-dated production platform.

Speaker #2: And they're all cash-generative assets. So our capacity to service debt over the longer term is far greater than it was a year or two ago.

Richard Beament: Our capacity to service debt over the longer term is far greater than it was a year or 2 ago. Modest net debt levels are fine, noting we are not intending to gear up substantially unless there was a particular accretive opportunity.

Speaker #2: And so, modest net debt levels are fine, noting we're not intending to gear up substantially unless there was a particular accretive opportunity.

Speaker #3: Thanks for that, Rich. Next question we have here is, why has the Strait of Hormuz situation not had any measurable effect, positive or negative, on Horizon?

[Company Representative] (Horizon Oil): Thanks for that, Rich. Next question we have here is, why has the Strait of Hormuz situation not had any measurable effect, positive or negative, to Horizon?

[Company Representative] (Horizon Oil Ltd): Thanks for that, Rich. Next question we have here is, why has the Strait of Hormuz situation not had any measurable effect, positive or negative, to Horizon?

Speaker #2: Well, look, I think it certainly has had a positive effect. Obviously, not so for the world, but I guess you need to recognize, really, it only impacted substantially the final quarter of FY26.

Richard Beament: Well, I think it certainly has had a positive effect. Obviously, not so for the world. I guess you need to recognize, really, it only impacted substantially the final quarter of FY2026. There is still elevated oil prices we are seeing now into this first quarter of FY2027, which will no doubt flow through. I think probably more strategically, it has a very profound positive effect on the business. Regional energy security has really come to the forefront of governments around the world, and particularly in this region. Most of the jurisdictions we are in, whether it be Thailand, Indonesia, even Australia and New Zealand, and China, have all been seriously impacted by the Strait of Hormuz issues. The assets we have and where they are located, have all really come up the importance chain.

Speaker #2: And so, obviously, there are still elevated oil prices. We’re seeing that now into the first quarter of FY27, which will no doubt flow through. I think probably, more strategically, it has.

Speaker #2: It's had a very profound, positive effect on the business. Regional energy security has really come to the forefront for governments around the world, and particularly in this region.

Speaker #2: Most of the jurisdictions where we're in, whether it be Thailand, Indonesia, even Australia and New Zealand, and China, have all been seriously impacted by the Strait of Hormuz issues.

Speaker #2: And the assets we have and where they're located have all really come up the importance chain. If I take Thailand as a standalone, those gas fields are critical to regional or to energy security in northeast Thailand.

Richard Beament: If I take Thailand as a standalone, those gas fields are critical to regional energy security in Northeast Thailand. Thailand is a huge importer of LNG. To have indigenous supply of gas in that country really sets us apart and puts those assets under a spotlight. That is really part of the reason why there is such an intense period of investment here. Those host governments and the companies we work with are under pressure to deliver more gas, particularly in that jurisdiction. In Indonesia, it is much the same. There has essentially been a moratorium put on the exportation of crude oil, and hence all the oil being produced in Mahato is being retained in the country. I think from a strategic point of view, you will see our assets really are probably more valuable than they have ever been, given that regional energy security thematic.

Speaker #2: And Thailand's a huge importer of LNG, so to have indigenous supply of gas in that country really sets us apart and puts those assets under a spotlight.

Speaker #2: That's really part of the reason why there's such an intense period of investment here. Those host governments and the companies we work with are under pressure to deliver more gas.

Speaker #2: Particularly in that jurisdiction in Indonesia, it's much the same. There's essentially been a moratorium put on the exportation of crude oil, and hence all the oil being produced in Madura is being retained in the country.

Speaker #2: So, I think from a strategic point of view, you'll see our assets really are probably more valuable than they've ever been, given that regional energy security thematic.

Speaker #3: Thanks for that. The next question we have is, we saw the recent press release and it was mentioned in the presentation today about the Pad D tie-in in Thailand.

[Company Representative] (Horizon Oil): Thanks for that. The next question we have is, we saw the recent press release and mentioned in the presentation today about the Pad D tie-in in Thailand. Can you provide an update as to the performance of these wells?

[Company Representative] (Horizon Oil Ltd): Thanks for that. The next question we have is, we saw the recent press release and mentioned in the presentation today about the Pad D tie-in in Thailand. Can you provide an update as to the performance of these wells?

Speaker #3: Can you provide an update as to the performance of these wells?

Speaker #2: Yeah, look, it's been a very positive step. That project came on stream about 50 days earlier than anticipated, which, again, sort of ties to my earlier question there on that regional energy security thematic. There's been a fair bit of pressure to get that on stream quickly.

Richard Beament: Yeah, look, it has been a very positive step. That project came on stream about 50 days earlier than anticipated, which again, sort of to my earlier question there on that regional energy security thematic, there has been a fair bit of pressure there to get that on stream quickly. Production has been good. We put out the press release. It was sort of averaging about 25 to 30 million standard cubic feet per day, and it has been continuing to perform like that. I would just sort of remind investors, those wells, PH14 and PH1, were drilled prior to us coming in. So we have sort of got a bit of a free hit on them, apart from paying for the pipelines to tie those wells in. All that production has really been a bit of a gift from ExxonMobil when they sold the asset.

Speaker #2: Production's been good. We put out the press release. It was averaging about 25 to 30 million standard cubic feet per day, and it's been continuing to perform like that.

Speaker #2: I would just sort of remind investors, those wells—PH14 and PH1—were drilled prior to us coming in. So we've sort of got a bit of a free hit on them, apart from paying for the pipelines to tie those wells in.

Speaker #2: All that production has really been a bit of a gift from Exxon when they sold the asset.

[Company Representative] (Horizon Oil): The last question we have at the moment, so please feel free to ask any more questions if you like, is, with the recent Cue acquisition, where do you see the most value and opportunities in their asset portfolio?

[Company Representative] (Horizon Oil Ltd): The last question we have at the moment, so please feel free to ask any more questions if you like, is, with the recent Cue acquisition, where do you see the most value and opportunities in their asset portfolio?

Speaker #3: The last question we have at the moment—so please feel free to ask any more questions if you like—is: With the recent Q acquisition, where do you see the most value and opportunities in their asset portfolio?

Speaker #2: Look, I'll take that one as well. Obviously, it's a diverse portfolio, and we are familiar with Murray and Marini in particular, which continue to have opportunity.

Richard Beament: Well, I will take that one as well. Look, obviously, it is a diverse portfolio, and we are familiar with Maari and Mereenie in particular, which continue to have opportunity. But probably in the nearer term, obviously Palm Valley in Australia has some appraisal wells going down now. So that, we are watching them pretty closely. But look, Mahato in Indonesia is probably the one which is most interesting. Obviously, there are some infill wells being drilled as we speak. And then that is being followed up with a high-impact exploration well. I would encourage people to have a look on the map, which is in the slides. It is in a pretty interesting place in Central Sumatra, adjacent to the multi-billion barrel fields, the Minas and Duri fields there. It is ex-Caltex acreage, and it is highly prospective.

Speaker #2: But probably in the nearer term, obviously Palm Valley in Australia has some appraisal wells going down now, so we're watching them pretty closely.

Speaker #2: But look, Manhattan in Indonesia is probably the one which is most interesting. Obviously, there are some infill wells being drilled—drilled as we speak—and then that's being followed up with a high-impact exploration well.

Speaker #2: I'd encourage people to have a look at the map, which is in the slides. It's in a pretty interesting place in central Sumatra, adjacent to the multi-billion-barrel fields—the Minas and Duri fields there.

Speaker #2: It's ex-Caltex acreage, and it's highly prospective. So we certainly are looking at it with interest. Obviously, it's been a very successful producer and cash generator for Q over many years.

Richard Beament: So we certainly are looking at it with interest, and obviously, it has been very successfully producer for, and cash generator for Cue over many years.

[Company Representative] (Horizon Oil): I think that concludes our questions now. Thank you very much for joining our webcast today. If you do have any further questions, please feel free to email them through to info@horizonoil.com.au. I will now pass you back to the moderator.

[Company Representative] (Horizon Oil Ltd): I think that concludes our questions now. Thank you very much for joining our webcast today. If you do have any further questions, please feel free to email them through to info@horizonoil.com.au. I will now pass you back to the moderator.

Speaker #3: I think that concludes our questions now. Thank you very much for joining our webcast today. If you do have any further questions, please feel free to email them to info@horizonoil.com.au.

Speaker #3: I'll now pass you back to the moderator.

Operator: Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.

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Q4 2026 Horizon Oil Ltd Earnings Call

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