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Horizon strengthens PNG footprint

Written by  Tuesday, 18 July 2017 00:10
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Sydney-based Horizon Oil has increased its interest to about 28% in the total certified resources contained in Papua New Guinea’s (PNG) Western Foreland fields of 2-2.5 Tcf gas and 60-70 MMbbl condensate.

Horizon and Spanish oil company Repsol will now jointly operate all Western Foreland fields and hold a combined 70% of the total resources while partners Osaka Gas, Kina Petroleum, and P3 Global Energy own the remaining 30%.

This comes after Horizon acquired 50% interest in and operatorship of PRL 28, containing the Ubuntu field and bought additional 3.15% interest in PRL 21, which is home to the Elevala, Tingu and Ketu fields, as a result of Mitsubishi Corp. divesting its upstream assets in PNG.

Moreover, Horizon also exchanged 20% interest in PRL 28 for 20% interest in the Puk Puk and Douglas fields in a trade with Kumul Petroleum, PNG’s national oil company.

After completion of these transactions, Horizon’s resource position for the planned mid-scale liquefied natural gas (LNG) development involving Repsol and other joint venture partners, will enhance the company’s capacity to advance the project. To be located on or near Daru Island in PNG, Western LNG’s (WLNG) design capacity is 1.5 MTPA.

Chief executive Brent Emmett said while the foundation gas for WLNG will come mainly from the Elevala, Tingu and Ketu fields, the Puk Puk and Douglas fields will be important contributors to the gas aggregation later in the project life, extending production plateau significantly.

“We now consider that our PNG acreage portfolio, with the recent enhancements, is optimally balanced. Horizon Oil’s 20-30% interests in the discovered fields will give us a meaningful interest in Western LNG - yet remain manageable from a funding perspective, taking into account the US$130 million milestone payment due on project FID and also the funds to be reimbursed by the PNG government should it elect to back-in to the project," he said. 

“The 80-100% interests in the exploration licenses provide scope for Horizon Oil to farm out future exploration work, to reduce exposure to cost and exploration risk. The exploration acreage is located close to, and on trend with existing discoveries and has considerable add-on potential to extend the life of Western LNG.

“As a result of these transactions, the company holds material working interests in all the appraised fields that will comprise the Western LNG gas aggregation project. Horizon Oil and Repsol between them operate all the licenses involved and, in combination will own about 70% of the total gas resources. This should greatly facilitate the planned multi-license development," he added.

Image: Map of Western Foreland fields and Horizon permits / Horizon

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