Oil company on safe ground

The National Business

HORIZON Oil says the company is well placed to manage its way through the current volatile oil price environment.
In a market release, Horizon Oil said it had a strong hedge position to mitigate against short term oil price volatility.
It has 270,000 bbls (barrels) of oil swaps covering the six-month period to June 2020 at a weighted average price of US$68.35 (K229.23)/bbl, net of credit charges.
Based on lifting timings, March 2020 forecast oil sales are approximately 80 per cent hedged at over US$69 (K231.41)/bbl.
Some of the key points include:

  • THE balance sheet continues to strengthen and the company remains on track to be in a net cash position by June 30, 2020;
  • THERE is continued strong free cashflow generation – with cash operating costs over recent months remaining below US$20 (K67.07)/bbl produced;
  • CASH on hand is currently in excess of US$25 million (K83.84mil);
  • HORIZON Oil’s debt facility is currently drawn to US$29.4 million (K98.60mil) with the next scheduled debt repayment of US$3.8 million (K12.74m) not due until Dec 31, 2020; and,
  • THE company has limited near-term capital commitments, with all existing commitments for calendar year 2020, expected to be covered by current free cash flow generation.