Horizon Oil Stock

Thank you for standing by, and welcome to the Horizon Oil FY '26 full year results webcast. Presenting today are Horizon's Chief Executive Officer, Richard Beament; and Chief Financial Officer, Kyle Keen.

[Operator Instructions]

I'd now like to hand you over to Richard.

Look, thanks very much and good morning, everyone. FY '26 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 5-country Asia Pacific platform. We achieved that growth while continuing to deliver shareholder returns and maintain a strong balance sheet. This morning, I'm going to start with a strategic overview, and then Kyle will take you through the financial results before I'll return to cover the asset portfolio, the outlook, and the near-term value runway before we open up for questions. Look, before we begin, I'll draw you to the customary compliance statement, which I encourage you all to read in full.

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 U.S. 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. That 5-country footprint supports a more resilient production and cash flow base. FY '26 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 June 30. 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 1 or 2 asset story. Today, we have a portfolio spanning 5 countries and 9 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. So this is the investment highlights of FY '26.

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 $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 FY '27 onwards, rather than being the driver of the FY '26 result. We also declared AUD 0.025 per share of dividend in FY '26 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.

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 FY '27 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. Now, this slide brings together what strategy delivery looks like for Horizon. Maximize cash flow, reinvest for growth, and return capital. On cash flow, FY '26 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.

On returns, we paid USD 33.1 million to shareholders during the year and declared FY '26 dividends of AUD 0.025 per share. On growth, we integrated Thailand and acquired a 57.03% controlling interest in Cue, expanding Horizon to 9 producing assets across 5 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. So turning to reserves and resources, FY '26 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.

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.

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. 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 June 30, 2026. This inventory was sold through early in 2027, generating further revenues in excess of $10 million.

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 3 priorities at once, dividends, debt reduction, and organic growth across the portfolio.

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 5-year period, FY '26 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.

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 investment 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 June 30 was a modest $11.3 million.

Cumulative distributions paid to shareholders now exceed USD 180 million, 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.

Thanks, Carl. I will now turn to the enlarged portfolio and the near-term activity across the asset base, starting with Thailand. Thailand is the clearest example of the FY '26 transformation, with our acquisition completing on the first of August last year. Since completion, the Nam Phong and Sinphuhorm 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 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.

At Sinphuhorm, the mini booster, water shutoff 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.

Indonesia comes into the portfolio through Cue and gives us 2 different asset roles. Mahato is the near-term oil growth asset. It is producing from a proven basin with current activity involving 2 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.

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.

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.

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.

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's 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're 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.

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 5-country Asia Pacific producer with 9 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 6 years.

With the $0.01 per share final dividend declared and to be paid for FY '26, we have now averaged annual distributions of AUD 0.03 per share for 6 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. FY '26 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.

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

[Operator Instructions]

I will now hand over for any webcast questions to be addressed.

Thank you very much there. We've had a number of questions regarding the dividend. We note that the interim dividend was $0.015 and the final dividend is $0.01. Can you please provide some context as to the final dividend?

Look, I'll take that one. Sure. First of all, let me just reaffirm that dividends remain a priority for the company. But look, 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. As we sit here today, we've got 5 wells either in the process of being drilled or committed to be drilled over the next 6 months, and then we've got a further 3 development wells, which are looking highly likely to be drilled in Sinphuhorm early in the new year. In addition to that, we've added booster compression in Sinphuhorm. We've got another booster compressor going in Nam Phong next month, and in Sampang as well, there's another compression facility. On top of that, we've had the Pad D tie-in works and indeed in Block 22/12, some workover activity.

I guess there's a strong draw on capital for all of those activities, but they're highly accretive. 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. 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. I can see there's another question here which dovetails with this around managing debt levels and are you comfortable with the net debt level gradually increasing. 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, and they're all cash-generative assets.

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're not intending to gear up substantially unless there was a particular accretive opportunity.

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?

Look, 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 FY '26. Obviously there's still elevated oil prices we're seeing now into this first quarter of FY '27, 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'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. 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 energy security in Northeast Thailand, and Thailand's 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'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, 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 Mahato is being retained in the country. 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.

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?

Yes, 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 in the press release, it was sort of averaging about 25 million 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, PH-14 and PH-01, were drilled prior to us coming in. 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 Exxon when they sold the asset.

The last question we have at the moment, so please feel free to ask any more questions if you would like, is with the recent Cue acquisition, where do you see the most value and opportunities in their asset portfolio?

Look, 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. 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. 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 slide. 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. It is highly prospective.

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.

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 [email protected]. I will now pass you back to the moderator.

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

Well, good morning, and thank you for joining Horizon Oil's investor webcast. I'm Richard Beament, the Group CEO, and I wanted to take a moment to run you through an update on the company after what has been a fairly transformational period as the Horizon today is very different to what it was just a year or so ago.

FY '26 was game-changing. We delivered record production and sales, established Thailand as a material low-cost contributor to group cash flow, completed the Cue acquisition and entered FY '27 with a broader 5-country platform and a larger opportunity set.

Before I begin, please note the usual important disclaimers, which I would encourage you to read. Look, at a glance, Horizon is now a diversified Asia-Pacific oil and gas producer with producing assets across Thailand, Indonesia, Australia, New Zealand and China. FY '26 net production was approximately 2.15 million barrels of oil equivalent with FY '26 sales of almost 2 million barrels of oil equivalent, up 33% and 22%, respectively, on FY '25 before any material contribution from Cue.

The portfolio now combines established offshore oil production, domestic gas production with a mix of oil-linked and fixed price gas contracts and a set of infrastructure-led growth opportunities.

On a Horizon net basis at 30 June 2026, 2P reserves were 13.6 million barrels of oil equivalent, 2C contingent resources were 19.8 million barrels of oil equivalent and 2U prospective resources were 14.3 million barrels of oil equivalent. The investment proposition is deliberately straightforward, reliable production, strong cash generation, disciplined reinvestment and shareholder returns.

Now turning to the map showing our diversified portfolio. The map is important because Horizon is no longer a narrow 1 or 2 asset story. We now have exposure to producing assets across 5 countries and following Cue, a footprint that includes 9 producing oil and gas fields. Each part of the portfolio has a role. Thailand provides low-cost oil-linked domestic gas cash flow. China and Maari provide established offshore oil exposure. Australia gives us strategically relevant contracted fixed price domestic gas through Mereenie, Palm Valley and Dingo. Indonesia adds near-term oil exploration and development activity at Mahato and also managed gas exposure at Sampang.

The value is not simply diversification for its own sake. It is diversification across cash flow, commodity exposure, maturity and opportunity type. The company highlights show the scale reset. Current Horizon net production is approximately 7,300 barrels of oil equivalent per day, including Horizon's share of Cue production. And the group's 2P reserves increased 51% from 9 million barrels of oil equivalent to 13.6 million barrels of oil equivalent over the year to 30 June 2026. What matters is the quality of that growth.

The record FY '26 production and sales outcome was delivered before any material Cue operating contribution. Cue, therefore, adds a further platform for growth rather than being the driver of FY '26 record result. At the same time, Horizon has continued to prioritize capital management with more than $270 million distributed to shareholders over the past 6 years, as noted on the slide.

This slide presents -- focuses on the company's key financial metrics over the past 5 years. Now I won't preempt the results for FY '26, but this slide reinforces the strength of the underlying business and disciplined capital allocation over an extended period. As noted in our recent quarterly report and on the slide, at 30 June 2026, Horizon retained $37.4 million of cash after approximately $8 million of debt repayments, the $17 million interim dividend paid in April and Cue-related cash acquisition costs. Net debt at 30 June 2026 was a relatively modest $11.3 million. And the point is that we've been able to return capital, reduce debt, fund growth and still preserve balance sheet flexibility. Our job is not just to grow barrels, it's to convert the portfolio into cash and allocate that cash well.

This slide shows the near-term value runway across the enlarged portfolio. The common theme is infrastructure-led approval gated growth. In Thailand, we have compression projects, Pad D deliverability work and infill drilling. At Mahato, we have infill drilling, the OPL 3 Phase 3 development planning and a high-impact exploration well. At Palm Valley, we have appraisal drilling. At Maari, there is infill maturation. And in China, we have workovers in progress, optimization activities and 12-8 East expansion studies.

What should be clear is that we have an enormous organic growth opportunity set with a period of intense activity over the coming 6 to 12 months. These activities will be important in helping us to grow and sustain production and cash flow generation out into the future. The strategic advantage that we now have is that we have multiple options to improve reliability, extend asset life and support cash flow without relying on any single large project.

Now building on the operational activity, we provided an indicative production outlook. Now I should emphasize that this should be read as indicative only. It's intended to illustrate the shape of the opportunity set, base production plus potential organic growth. It illustrates that the group has organic growth opportunities within our current portfolio that have the potential to support production and cash flow out for the next decade and beyond.

Now just turning to a bit more detail on the assets. Thailand is the clearest example of the FY '26 transformation. Sinphuhorm and Nam Phong have quickly become a material cash flow engine for Horizon, supported by low operating costs and gas pricing linked to oil markets. In Q4, the assets averaged approximately 1,900 barrels of oil equivalent per day net to Horizon with quarterly revenue increasing almost 18% to $7.3 million. The strategic role of Thailand is threefold. First, it provides domestic gas into a market that values reliable supply, even more so after the recent turmoil in the Middle East.

These gas fields are the only source of domestic gas for the Nam Phong Power Station, which supplies around 20% of Northeast Thailand electricity. Second, the oil-linked pricing structure gives Horizon commodity leverage through gas. Third, existing infrastructure creates a practical path for deliverability enhancement with a strategic imperative growing for extending the life of these fields. Accordingly, the Nam Phong and Sinphuhorm booster compressors, the Pad D tie-in and the infill drilling program slated for early next year are all critical activities aimed at helping to meet these strategic energy needs.

Indonesia comes to Horizon through Cue and gives us 2 different asset roles. Mahato is the near-term oil growth asset, while Sampang is a mature gas asset where the focus is disciplined production optimization. At Mahato, the PB oil field is producing from a proven central Samatra Basin setting with 2 approved infill development wells targeting the Bekasap reservoir. The PB-41 well commenced drilling in July with a second well expected to follow on as part of an approximate 2-month drilling campaign.

The operator is also progressing the Phase 3 development plan and the high-impact GA-1 exploration well. At Sampang, the asset continues to supply gas to the Grati Power Station, but production is declining as the oil and water fields mature. The near-term focus is compressor commissioning of the Grati processing facility expected during this quarter and disciplined management through the current contract expiry.

The Amadeus Basin assets strengthen Horizon's domestic gas exposure. Mereenie, Palm Valley and Dingo are established gas assets tied into regional infrastructure serving both the Northern Territory and East Coast markets. Mereenie has provided critical domestic gas to the territory for over 40 years and continues to supply around 30% to 40% of the market. The ongoing field development review is assessing future well opportunities and optimization initiatives. Palm Valley adds a near-term catalyst.

The PV14 well has commenced drilling as the first of 2 appraisal wells designed to evaluate and develop additional gas resources and support longer-term Northern Territory market supply. Dingo adds contracted gas exposure into the Alice Springs power market. Together, these assets provide strategic domestic gas balance.

Maari remains an established offshore oil cash flow asset and the Cue transaction increases Horizon's effective exposure to an asset we know very well. The asset remains regionally important, regularly supplying Australia's East Coast oil refineries. The near-term focus is on the MR3 well workover, which will be completed shortly, continued reservoir management and subsurface studies to mature potential future infill drilling candidates.

China, well, it remains a reliable offshore oil contributor. In Q4, Block 22/12 gross oil production averaged just over 6,700 barrels a day or around 1,800 barrels of oil per day net to Horizon, and it's increased recently following some workover activity. The asset's role is clear, stable oil cash flow underpinned by low-cost operations with ongoing optimization. Water handling upgrades earlier in the year have continued to support production rates and the current workover program at the 6-12 field is underway. The next area of focus is continuing the 12-8 East Phase 2 feasibility studies.

So to close, the investment case for Horizon is stronger and clearer than it was a year ago. We have a diversified Asia-Pacific 5-country production platform, record FY '26 production and sales volumes, a larger reserves and resources base and a disciplined capital allocation model that continues to prioritize shareholder returns.

The transformation has 3 pillars. First, Thailand has become a material cash flow engine with near-term deliverability projects and an oil-linked gas pricing structure. Second, the Cue acquisition has increased scale, broadened reserves and production and added multiple value-accretive opportunities across Australia, Indonesia and New Zealand. Third, the base portfolio, Maari, Beibu, Mereenie and the Thailand assets continue to generate cash while we progress high-return infrastructure-led opportunities through approval gates.

Our focus is unchanged, operate safely, maximize cash flow through strong production and keeping costs under control, allocate capital carefully, maintain balance sheet flexibility and create sustainable long-term value for shareholders with distributions remaining a priority. We are not chasing scale for its own sake. We are building a stronger regional energy business around assets that can generate cash and opportunities that can compete for capital. The enlarged Horizon gives us more options, but the discipline remains the same.

So look, thank you for your time and continued interest in Horizon. I look forward to updating shareholders as the enlarged portfolio is integrated and as we move through this intense period of development activity. I look forward to also speaking to you all again in the coming weeks when we release our full year results for FY '26. Thanks very much.

Thank you for standing by, and welcome to the Horizon Oil Limited Half Year Results. [Operator Instructions]

I would now like to hand the conference over to Mr. Richard Beament, Chief Executive Officer. Please go ahead.

Well, look, a very good morning, and welcome to Horizon Oil's FY '26 Half Year Results Presentation for the period ended 31 December, 2025. I'm Richard Beament, Horizon's CEO, and I'm joined today by Kyle Keen, our CFO.

This half year represents a very important period for the company. Despite a materially lower realized oil price environment, we delivered strong operating and financial performance, underpinned by disciplined cost control and the successful integration of our recently acquired Thailand assets. The completion of the Thailand acquisition on the 1st of August, together with the 10-year extension of the Maari permit to December 2037, has delivered a genuine step change for Horizon, increasing production, strengthening cash flow resilience, extending portfolio life and further diversifying the business.

This morning, I'll provide a brief overview of the half-year performance, then hand over to Kyle to take you through the financials before I return to cover asset performance, outlook and upcoming activity. And we'll then open up to questions.

Before we begin, I'll draw your attention to the customary compliance statement on Slide 2, which I encourage everyone to read in full. During today's presentation, we may make forward-looking statements, and actual results may differ materially due to known and unknown risks and uncertainties. It's also important to note that in our results, our recent Thailand investment is equity accounted in the half year financial statements since we hold the interest through our 75% shareholding in MH Energy Thailand LLC, the company which we acquired together with Matahio from Exxon.

To aid our investors, where possible, we've reported metrics for the half year inclusive of the contribution from Thailand, such as underlying revenue to aid with comparability. As always, I should also note that all dollar amounts referred to in this presentation are in U.S. dollars unless otherwise stated.

Now, this slide highlights Horizon's diversified non-operated portfolio across Southeast Asia and Australasia. We now have 5 producing assets across 4 countries with China, New Zealand, Australia and Thailand with a strong weighting toward long-life, low-cost oil and gas assets operated by experienced partners. The addition of the Sinphuhorm and Nam Phong gas fields in Thailand further strengthens the portfolio, increasing gas exposure and providing additional scale and resilience.

Turning now to the investment highlights for the half year. Production and sales volumes increased by 26% and 25%, respectively, compared to the prior corresponding half year, reflecting 5 full months of contribution from the Thailand assets, together with continued solid performance from our existing portfolio. Underlying revenue for the half year was $54.2 million, including $9.6 million from Thailand, while EBITDAX of $28.6 million was broadly in line with the prior half year despite a 15% lower realized oil price.

Cash flow from operating activities increased by 37% to $25.1 million, demonstrating the resilience of our assets and cost base. We finished the period with $35.6 million of cash and a modest net debt position of $9.8 million following payment of the FY '25 final dividend in October. Importantly, the Board has declared an FY '26 interim dividend of AUD 0.015 per share payable in April this year, maintaining our long-standing commitment to prioritizing shareholder returns.

Now the next slide brings together how the business is performing against strategy. First, on shareholder returns. With the declaration of the FY '26 interim dividend, Horizon enters its sixth consecutive year of distributions, with more than AUD 0.17 per share paid or declared since 2021, totaling over AUD 274 million. Operationally, we continue to execute across the portfolio. Thailand is already contributing meaningfully following completion of the acquisition in August. Block 22/12 is in the midst of a liquid-handling upgrade. Maari delivered its strongest production rates in more than 5 years following workovers, and Mereenie continued to perform strongly with gas sales now supported by long-term arrangements with the Northern Territory government.

Strategically, the Thailand acquisition and the Maari permit extension materially strengthened portfolio longevity at low-risk growth options and with Thailand's increasing gas exposure, including the sanctioned Nam Phong Booster Compressor, which is expected to deliver a significant percentage uplift in production from that field around mid-2026.

Finally, from an ESG perspective, safety performance remains strong across the portfolio. Our gas assets continue to support regional energy security and the completion of a double materiality assessment during the half year helped sharpen our ESG focus as the business evolves. Overall, this half year reinforces that Horizon is delivering disciplined growth, resilient cash flows and long-term value creation.

And now I'll pass over to Kyle to run through the financial results for the half year in a little more detail.

Thank you, Richard.

As always, all references to dollars are to United States dollars unless otherwise stated. Throughout the financial slides, you'll see a constant theme, the strong and positive contribution from the Thailand acquisition. Whilst the acquisition had an effective date of the 1st of January 2025, completion occurred on the 1st of August 2025. Therefore, only 5 months of contribution is reflected in the half year results. Importantly, cash flows generated between the effective date and the completion dates were deducted from the initial purchase consideration.

Turning to the group's financial performance for the half year. This slide summarizes our results compared with the prior half year period. We've also included 2026 calendar year results, which we reference later. Most key metrics were strong despite a 15% lower realized oil price, which notably impacted profits. That impact was largely offset by the 5 months contribution from Thailand, allowing us to maintain underlying revenue and EBITDAX while increasing operating cash flow. Production and sales for the half year increased by over 20%, exceeding 1 million barrels of oil equivalent and generating underlying revenue of $54.2 million.

On the cost side, the group continued to maintain a low cash operating cost base of around $20 a barrel of oil equivalent, supporting continued strong free cash flow generation with an EBITDAX result of $28.6 million and cash flow from operating activities of $25.1 million for the half year. At the 31st of December, the group held cash reserves of $35.6 million, resulting in a modest net debt position of $9.8 million. This reflects the payment of the FY '25 final dividend and completion of the predominantly debt-funded Thailand acquisition.

This chart clearly illustrates how the business has performed over the past 6 months, breaking down operating cash flow and how those funds were deployed. The $25.1 million of operating cash flow, including Thailand's contribution, has completely funded the 2025 final dividend of $15.9 million, $3 million of debt repayments and $4.6 million of investments in our low-cost producing assets. The chart also highlights the minimal equity contribution to the Thailand acquisition, with the majority of the purchase price debt funded.

The primary reason for the decline in cash over the period was the loan to our joint venture partner to aid with completion of the transaction. That loan generates interest income of at SOFR plus 9% per annum and fully amortizes by the 31st of December 2027, with over $1 million already repaid. The group closed the half year with $35.6 million of cash, and this provides sufficient liquidity to pay the interim distribution of AUD 0.015 per share. That's to be paid in April 2026, fund ongoing development activity across the asset base, progress organic and inorganic growth opportunities and to allow us to maintain appropriate working capital balance, which includes the provision for Maari's long-term decommissioning obligations.

Moving to the calendar year context. 2025 sales volumes were the highest in 5 years, reflecting the contribution from Thailand following completion in August 2025. Mereenie continues to play an important role in offsetting natural reservoir decline at Block 22/12, reinforcing the strategic value of that acquisition. While revenue remains closely linked to production volumes, it is also influenced by realized oil and gas prices. And despite the lower realized oil prices, calendar year underlying revenue of $103.6 million was achieved, noting it was supported by Thailand's contribution.

Building on production performance and continued cost discipline, the group remained profitable. Half year EBITDAX remained strong at $28.6 million, while calendar year EBITDAX of $54 million demonstrates the consistency of earnings following the Thailand acquisition. Calendar year profit of $8 million primarily reflects a higher non-cash amortization expense, together with the impact of lower realized oil prices, with underlying cash operating margins remaining resilient.

The strong profitability delivered over recent years has been underpinned by disciplined capital allocation and the contribution from high-quality acquisitions and development projects, including the Weizhou 12-8 East development and more recently, the Mereenie and Thailand acquisitions.

Now turning to our final financial slide. The charts highlight the group's ongoing ability to generate free cash flow and return capital to our shareholders. At the 31st of December 2025, net debt was $9.8 million, following the Thailand acquisition and shareholder distributions during the half year. Cumulative distributions now exceed USD 165 million or approximately AUD 250 million over the past 5 calendar years and excludes the FY '26 interim distribution of AUD 0.015 per share, which will be paid in April later this year. These outcomes reflect a clear strategy focused on value, disciplined investment and consistent shareholder returns while maintaining balance sheet strength and flexibility.

With that, I'd now like to hand you back to Richard to provide an update on the asset portfolio and an outlook for the company.

Well, thanks, Kyle.

I'll now provide an update on the assets. As Kyle mentioned, starting with Block 22/12 in the Beibu Gulf. Block 22/12 delivered a solid operational performance during the half year, with production broadly in line with expectations. As anticipated, natural reservoir decline was partly offset through a combination of workovers, slickline activities and ongoing optimization initiatives.

A key focus for the joint venture remains the liquid-handling capacity upgrade, which is scheduled to come online progressively over the coming months. This upgrade is expected to aid with sustaining and potentially increasing oil production rates later this year. In parallel, feasibility studies have progressed on a potential multi-well development at 12-8 East, which continues to be evaluated by the joint venture.

Turning to Maari in New Zealand. Maari delivered an outstanding half year performance, achieving the highest daily production rates in more than 5 years during August following successful workover activities. Average production for the half year was approximately 12% higher than the prior corresponding period, underpinned by stable reservoir performance and effective water injection.

A major milestone during the period was the award of a 10-year permit extension through to December 2037, providing long-term certainty for continued production, further optimization and decommissioning planning. This extension reflects the increasing focus on energy security in New Zealand and reinforces Maari's value as a long-life cash-generating asset.

Moving now to Mereenie in the Northern Territory. Mereenie continued to perform strongly during the half year, with production supported by the 2 infill wells drilled in early 2025, which still contribute almost 25% of total field gas production. Realized gas pricing improved materially following the expiry of legacy contracts and the execution of a binding letter of intent with Power and Water Corporation provides a pathway to firm supply of uncontracted gas through to 2034. This agreement underpins the planned drilling of additional infill wells later in calendar year 2026 and reinforces Mereenie's role as a critical supplier of domestic gas to the Northern Territory.

Turning now to Thailand, our most recent addition to the portfolio. The acquisition of interest in the Sinphuhorm and Nam Phong gas fields completed on the 1st of August 2025 and delivered an immediate positive impact during the half year. Over the 5-month period, Thailand contributed approximately 28% of group production with revenue of $9.6 million and very low average operating costs of around $7 per barrel of oil equivalent.

Operational performance has been strong, with both fields exceeding nominations and early optimization at Nam Phong delivering an estimated 7% uplift in production with no additional capital. A final investment decision was reached in early January on the Nam Phong Booster Compressor, which is expected to increase field production by at least 40% from mid-2026.

At Sinphuhorm, regulatory approvals are now in place and works commenced for the tie-in of the PH-14 well, which along with the perforation of the shallow section of the original discovery well, the PH1 sidetrack on the same pad. This is targeted for completion later in 2026. Overall, integration of the Thailand assets has been seamless, and they are already making a meaningful contribution to group cash flow and portfolio resilience.

Finally, turning to our activity plan for the next 12 months. At Block 22/12, the liquids-handling upgrade is expected to ramp up over the coming months, with further drilling and workover activity under review. At Maari, focus remains on ongoing optimization and infrastructure integrity following the permit extension. At Mereenie, the joint venture is progressing planning for additional gas infill wells, supported by long-term gas sales arrangements. And in Thailand, we are advancing the Nam Phong Booster Compressor Project and the Sinphuhorm infill well tie-ins, both of which are expected to support higher production and cash flow from the second half of calendar year 2026. So once again, we have a busy calendar of activity, firmly focused on extracting more value out of our assets.

In summary, this has been another strong half year for the company. We've delivered resilient financial results in a lower oil price environment, successfully integrated the Thailand acquisition, extended the life of Maari and maintained our commitment to shareholder returns, all while preserving balance sheet strength.

And with that, Kyle and I would now be very happy to take any questions you might have.

[Operator Instructions]

Okay. So the first question we have right now is, how have you found Thailand as a jurisdiction and working with PTTEP?

I might take that one. Look, it's been a really rewarding and good experience going into Thailand. Our relationship with PTTEP has been very, very strong. I think the testament to that is that within 5 or 6 months of taking over and completing the transaction, we've reached FID on that Booster Compressor Project at Nam Phong and that [Technical Difficulty] milestone so quickly after taking the rains there in Nam Phong to how strong that relationship has been. And moreover, the energy security requirements in Thailand. These fields provide fundamental gas supply to a power station. And all we've seen is positivity around how we can continue to help them to extract more gas and deliver into the power station.

Thanks, Richard. The second question we had again on Thailand is Sinphuhorm was lower in August and September and February and March. Can you explain why?

Yes. Look, I mean, that was purely -- as sort of depicted on the slide, that was purely due to a planned maintenance outage in the EGAT power station. They essentially did a 5-year turnaround on one of their gas turbines earlier in the year and the second one in that August, September period. Production is back up over 100 million standard cubic feet per day, and we expect it to be maintained at that level for the foreseeable future.

Thank you. Another question we have here is, what consideration is being given to testing Mereenie Stairway untapped gas?

So, I think you're referring there to the Mereenie Stairway formation. Look, the immediate priority of the joint venture is to drill infill wells in order to fulfill and essentially support the Northern Territory gas demand. So, those infill wells planned to be drilled into the existing Pacoota reservoir. The Stairway formation continues to be a priority for us. It is something we are keen to drill. The joint venture continues to consider its options in respect of that, whether it can be drilled as part of the campaign later this year or in a subsequent campaign, that's still to be determined.

Thanks for that. We might just give another 30-odd seconds or so if any final questions come through, please put your questions in the Ask Question box and send them through.

I don't think we've received any more questions. So, please feel free to e-mail us any questions you might have at [email protected]. And this concludes our webcast for today.

I'll hand you back to the operator.

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

Thank you for standing by, and welcome to the Horizon Oil Limited 2025 AGM. I would now like to hand over to Mr. Bruce Clement, Chair of Horizon Oil. Please go ahead.

Thank you. Good morning, ladies and gentlemen. My name is Bruce Clement, and I'm the Chair of Horizon Oil Limited. Before the beginning of the meeting, I'll acknowledge the traditional owners of the country on which we meet today, The Gadigal People of the Eora Nation, and we pay respects to their elders past, present and emerging.

I'd like to welcome you and officially open the Horizon Oil Limited Annual General Meeting for 2025. I'd also like to extend a welcome to those members who are joining us by webcast. And based on the number of voting members in attendance, I declare a quorum for the meeting.

Before I commence today's proceedings, I'd like to draw your attention to the safety procedures for this venue. Should you hear an alarm, instructions will be broadcast by the building wardens regarding what actions to take, be it to remain in place or to proceed to evacuate. If required to evacuate, please make sure you do not use the lifts. The evacuation point for the building is located at Wynyard Park in Margaret Street as indicated on the map just across there, if you look out the window.

Also I'd like to introduce my fellow directors. On the left of where I'm sitting, has your Chief Executive Officer, Richard Beament; and Nigel Burgess and to the right of where I'm sitting is Catherine Costello; and Dr. Peter Goode. Unfortunately, Greg Bittar is traveling and has apologized for not being able to attend the meeting today.

Also joining us in the room are our Chief Financial Officer, Kyle Keen; our Chief Operating Officer, Gavin Douglas; and Company Secretary Vas Margiankakos. I note that Marc Upcroft, representing our auditors, PwC, is also available today to answer questions on the auditor's report in the meeting. Before beginning the meeting or the formal business of the meeting, I'd like to ask Vas our Company Secretary to outline today's procedures and protocols.

Thank you, Bruce. All resolutions will be decided by way of a poll at the end of the meeting. The meeting will consider the items of business outlined in the notice of meeting sent to all shareholders on October 13, 2025. There will be opportunities for shareholders to ask questions and will be confined to the formal business of the meeting. Only those persons holding a yellow or blue card are eligible to ask questions. Gemme Coyle of Computershare has been appointed as a returning officer, following confirmation by Computershare, final proxy and voting results will be released to the ASX and the company's website later today.

I will now hand back to the Chair.

Thanks, Vas. As there may be holders who may not be able to stay for the entire meeting, I now declare voting on all items of business open. Any undirected proxies in my favor as Chairman will be voted in favor of the relevant resolutions. The meeting will consider the items of business outlined in the notice of meeting sent to all shareholders on 13th of October 2025. I'd like to start the meeting with my formal address. This will be followed by a presentation from our CEO, and there will be opportunity to ask questions following Richard's presentation. We'll then proceed to the formal part of the meeting, where the resolutions provided in that notice of meeting will be put to the members. I note that we have not received any questions ahead of the meeting on any of the items of formal business.

I will start by pointing to -- pointing out to you our compliance statement a disclaimer, which relates to today's presentations, which I would encourage you all to read. I also like to highlight that all references in today's presentation are in U.S. dollars unless otherwise stated. I'll leave Richard to discuss in detail the company's financial results. However, it is worth noting some of the key cash flow outcomes for the year. This chart shows our EBITDA performance over the past few years and continuing to perform in 2025, supported a dividend payment of AUD 0.03 per share, a total of USD 31.8 million during the year. Our cash flow performance and our balance sheet -- I should have asked beforehand, you got a phone, turn it to silent. That's all right. Our cash flow performance and our balance sheet position places the company in a relatively unique position for energy companies of our size in being able to provide material distributions to shareholders as well as support funding for value-adding investment opportunities.

Importantly, we have used our financial capacity to continue the implementation of the company strategy. During the year, we delivered the $0.03 per share dividend, while completing the acquisition of the Thai assets, completed actually in July after the end of the year. Our strategy has remained consistent and focused over the 5 years I've been on the board. We've aimed to maximize production and cash flow from our portfolio of assets, including investment in opportunities within those assets that have delivered significant returns.

We've provided distributions to shareholders totaling AUD 0.155 per share over the period, and working within our strict financial discipline, we've executed major investments in our producing assets, and we've completed strategic asset acquisitions that have delivered additional reserves, production, cash flow and material value to the company. As a company, our performance continues to be strong as reflected in our share price. The chart displayed, shows a comparison between accumulation basis over the past 5 years, showing the cumulative returns from share price and distributions over that period.

Horizon has been one of the best performing companies on ASX, outperforming the 200 index and the majority of oil and gas companies on ASX reflects the benefit of our focused company strategy. At this point, we should recognize and thank the Horizon team led by Richard for their efforts in delivering these results. Their work across all our assets and new ventures has been critical to the company's performance. And I also acknowledge and thank the Board for their part in achieving this performance.

During the year, we've seen renewal within the Board following the retirement of Mike Harding and Sandra Birkensleigh, and the appointment of Peter Goode and Catherine Costello as non-executive Directors. I thank Mike and Sandra for their contribution to the Board over many years. And in particular, Mike provided outstanding leadership for the Board and company in the 6 years as Chairman and contributed greatly to the healthy position we're in today. Richard will provide a more detailed update on our assets and the performance. However, I would like to reflect on the recent acquisition of the Thailand assets. It represents an important part of our strategy and highlights the disciplined and innovative approach the company has in building the business as well as the capability of our Horizon team. The Thai acquisition represented a USD 30 million investment for the company in which we acquired interest in 2 onshore gas fields in Thailand.

Through the transaction, we acquired additional 2P reserves of 3.5 million barrels of oil equivalent, which represents an additional 28% to our year-end 2P reserves. In the 2 months following completion of the deal, we added 1,700 barrels of oil equivalent per day to production, inclusive of planned maintenance activities in the field. We saw a 28% increase to group production from the acquisition with an operating cost base for the Thai assets of approximately USD 6 per barrel of oil equivalent. To complete the transaction, management identified and negotiated the deal with the vendor ExxonMobil, completed thorough due diligence on the assets, established our credentials with and obtained approval from the Thai government regulator.

We arranged the finance facility with Macquarie Bank and established a new joint venture arrangement with our operating partner. The Horizon team is small, relatively small by other oil companies, but clearly very capable. We now hold a fourth cash flow generating business in the Thai assets, and we've built new relationships in the region, particularly with the Thai government and the Thai National Oil Company. The longer-term success of the transaction will be measured in the performance of the asset over the coming years, although clearly, initial performance has been good, successfully executing the transaction as well as the earlier Mereenie acquisition does highlight the company's and management's capability and the benefits we have derived from financial discipline and focusing the company on delivering operating and financial performance.

I'll finish by reflecting on where Horizon is positioned in this period of change, particularly in the energy industry. Recently, we've seen a reduction in the Brent oil price to approximately $65 per barrel from an average of $73.60 in '24, '25, and this will have some impact on the current year performance. However, we continue to see forecast strong global demand for both oil and gas as well as increasing domestic importance for gas in Australia and in Thailand.

With the expansion and diversification of our asset base, I believe that Horizon is well positioned in this environment with our people and our financial position to continue to pursue our strategy, and I look forward to working with the shareholders, management and the Board to deliver more positive results for our shareholders.

I'll now hand over to Richard to provide a review of the 2025 performance and details on each of our assets.

Thanks, Bruce, and I'd like to also welcome you all to today's Annual General Meeting. Well, what a difference a year can make. This time last year, we had 3 production assets with permits running out really in just a couple of years with the exception of Mereenie. Today, we've got 5 producing assets in 4 countries producing now about 50% higher production levels of around 6,500 barrels of oil equivalent per day. And we've achieved that, as Bruce mentioned, while still paying those substantial dividends and distributions, which now amount to some AUD 0.25 billion paid back to shareholders over the last 5 years.

So look, this morning, I'm planning to sort of build on Bruce's commentary, give you a bit of an update on the strategy, an update on the assets and the outlook for the company over the coming year. First of all, how we've gone on delivering strategy. We focused firmly on our 3 key pillars, with maximizing free cash flow really being at the core of everything that we do. We had continued strong production from our fields in FY '25 for around about 1.6 million barrels of oil equivalent. And that was really underpinned heavily by that additional Mereenie production that came through following the earlier acquisition in the prior year. That, combined with strong production from our other legacy assets led to EBITDAX of just under USD 56 million, and indeed led to free cash flow generation of around just under USD 36 million.

With that cash flow, that helped us to deliver on our second core pillar being distributions to shareholders. And as Bruce mentioned, we've now returned USD 0.155 over the last 5 years. And that's the fifth consecutive year of paying at least AUD 0.03 per share with a dividend yield of at least 15% per annum for 5 years on -- in succession. Needless to say, distributions continue to be a core priority. The last pillar, investing in production growth. I'll leave it to last, but really, it's fundamental to the future of the company. And we did a number of infill wells during the year in Mereenie and in China in Block 22/12, together with workover activity and that all important acquisition in Thailand. That helped us to deliver future cash flow, deliver that continued growth that we need to keep the business running. And I can't leave it out, probably a core highlight that happened just after the year-end was the award of a 10-year permit extension of our Maari field, which gives us substantial more running room to continue to deliver cash flow from that asset.

These results have all been done while still focusing on ESG, and we had, again, very, very good ESG and safety credentials throughout the year, beating most industry benchmarks. And we also continued our focus on emissions reduction as well as delivering on community support programs in all of the operational fields. Also, I'd also reflect on our Mereenie acquisition and indeed, Thailand, both being gas production assets, core to the energy security of both the Northern Territory for Mereenie and for Thailand as well. And we see gas being critical to the energy transition and also features as part of our ESG strategy.

If we just have a look at the assets then, and I'll sort of run through them. We've got a few more to add. I'll start with our foundation assets, Maari and Block 22/12, which continued to perform quite well. At Maari, we had workover activity and that all important life extension, which has led to Maari production over recent months, in fact, being some of the highest levels we've seen in over 5 years. At Block 22/12, we've continued to see strong production levels, and we've continued to invest in that asset with -- I think it was 5 infill wells drilled throughout the year, together with some workover activity, which has allowed us to sustain production levels.

But the focus really in Block 22/12 as we move forward is work on our water handling upgrade project, which is currently being commissioned and should be online early in the new year. We expect that will help us to continue to boost and sustain production rates from Block 22/12 as we go forward. But we always continue to look also at other infill well opportunities in that asset, largely focused around the 2-8 East field, which came online in 2022. If we just look at the recent additions, and I'll start with our Australian asset, Mereenie, which came into the portfolio towards the end of FY '24.

That asset has been a standout addition, as Bruce highlighted. We came into the venture, the deal completed in June, June 2024. Shortly thereafter, we signed a 6-year gas sales agreement with the Northern Territory government, showing how critical that asset is to the energy security for the Northern Territory. In January, February this year, we drilled 2 successful infill wells, which helped to boost field production rates by around about 25%. And it continues to be a solid performer for the group as we go forward, and has a lot of running room. The joint venture continues to look at further infill drilling, leveraging the learnings from those earlier wells we drilled earlier this year.

So now moving to our Thailand assets. A number of you would have seen our earlier presentations on these assets. But for those less familiar, we picked up from Exxon an effective 7.5% interest in the simple home gas field, together with a 60% interest in the Nam Phong field. These 2 fields are located in the northeast of Thailand. If you look at the map there on the right. And all of that -- the gas from these fields goes to one power station, the Nam Phong power station, which relies 100% on the gas from these 2 fields.

That power station provides about 20% or meets about 20% of the electricity demand for Northeast Thailand. And so it's a critical infrastructure asset for the country, and it shows the importance and strategic nature of that investment. The 2 fields, if we start with Sinphuhorm, the larger of the fields. That field produces at around about 100 million standard cubic feet per day. There was a lot of investment made to sustain production rates before we came in, they put in a large booster compressor, which you can see in the picture there, and that's really helped to boost production rates. And they also drilled an infill well up in the north of the block the PH-14 well, which is yet to be tied in, and there's plans to tie that in throughout 2026 to help sustain production rates right out through to the end of the concession.

The concessions on both of these, and I guess, showing how critically important these assets are. Both assets are underpinned by gas sales agreements with the state-owned energy provider right out to the end of the concession, taking essentially all of our gas at market prices. The Nam Phong field smaller by production volume today, but it was originally producing at about 130 million standard cubic feet per day. It's in the latter part of its life, producing around 6 million standard cubic feet per day. But we have plans now to install a booster compressor to further boost production rates.

And we expect the addition of that could boost production rates by up to 50%. So whilst it's small, with a 60% holding, it still makes a material impact to the business. As Bruce alluded to, these are very, very low-cost production around that $6, $7 per barrel of oil equivalent. And when we're selling gas up here at $67 per gigajoule, it makes a very healthy margins and strong cash flow generation.

As Bruce mentioned, it also gives us a great foothold up in Southeast Asia for further expansion if we find quality assets and partnering with PTTEP and indeed Matahio has really put us on a different footing. So if we just -- I just want to look now at the outlook for production and perhaps reflect on where we were just 2 years ago. So this is really what our production forecast would have looked like had we just retained Maari and Block 22/12. So you can -- and indeed without a license extension at Maari. And you can see, really, we had about 2 or 3 years left of production, 2 or 3 years left of cash flow and a very small window in which to get out there and grow the business.

We fast forward to today and what the outlook looks like is something completely different. We've now got essentially diversified production portfolio, which goes right out with robust production out to the end of the decade and beyond, with geographical and product diversification, roughly a 50-50 split between oil and gas diversified by geography, as I mentioned, helping us to balance the political risk of all the various jurisdictions we operate and the changing energy policies that we see occur around the world, quite a contrast.

So look, our priorities as we go forward are very clear. It's to continue to deliver development upside from all of our assets, but in particular, in Thailand with the booster compressor project at Nam Phong and the PH-14 well at Sinphuhorm. In Block 22/12 was that liquid handling upgrade, which is our immediate focus. Obviously, maintaining capital discipline and cash flow is key and indeed focused on prioritizing distributions as we have over previous years. So we believe that, that combination of delivering cash returns to shareholders, growth and low-cost production continues to make a rise in a very compelling investment proposition.

And look, before I open the floor to questions, the results we've achieved really aren't possible without an extraordinary team. And I'd like to thank on behalf of the Board the executive team, Gavin, Kyle, Hany and Vas, together with the staff and indeed our dedicated consultants for all they've done over not just the last 12 months, but for over many years and helping us to deliver these results. I'd also like to thank the Board for their support and indeed to the shareholders for your ongoing support. And with that, happy to answer any questions.

Yes, Bruce, thank you. Sorry, A question on your production forecast, you had a layer of gray on the top, which was other production opportunities. Can you tell us a little bit more about where they come from?

Look, it's a bit of a bucket. We can sort of go back to that slide. But look at asset. We've got further infill wells in Mereenie that we throw into that bucket, further drilling at 12-8 East in China, which is -- in Thailand, we haven't added anything substantial into that bucket yet. We're still working through the opportunities there and seeing what's live in front of us. But yes, it sort of captures a number of those buckets. Could we do better than that? Yes. Will we do all of them depends on oil prices and then I guess, the maturation of those opportunities.

Nice presentation, Richard. Thank you. Where do you see the price of oil going in the next 12 months?

If I knew, I probably wouldn't need to be here. Look, I think we see -- there's a lot of competing supply demand, geopolitical things at play, where oil prices are right now. We expect there could be a little bit more softness, if I'm honest with you. But $60, $65 barrel is probably where we see things for the time being.

This is not under your domain, but could you explain why the price of petrol is so expensive at the moment. I mean it really is, when you talk about $60 a barrel, it's outrages.

Yes, not really my domain. But look, obviously, exchange rates play a part in that with the Aussie dollar being continue to be reasonably depressed. But yes, it's refining margins, it's all these things, government excise you name it.

I was just wondering in the breadth of your activities, will the economics has got, to some extent, Donald Trump to tell us where we're going to go next, I'm sure he knows. But I just wonder how much of those are risky if at all, I mean, I always thought in China often wondered where you're going to -- was that any sort of political risk. And just wanting to Thailand and there anyone else? Is there anything particularly concerns you?

And perhaps secondly, how much of your product is Australian used?

A few questions there. Look, I think, first of all, I'll answer the last one first. Obviously, our gas goes 100% from Mereenie into the domestic market. Currently, Mereenie new supply is about 30% to 40% of Northern Territory domestic gas demand. So that's certainly all Australian going into the Australian economy. In terms of our crude, look, Maari crude all goes into the East Coast refineries in Australia and has done for many years, either Geelong or Lytton. And I think when we visited the refinery, they told us that it roughly represented of a couple of percent of Australia's domestic refined product. So not insignificant, but it seems important.

And by the way, under any sort of threats of more or less or [indiscernible] just carry [indiscernible] very hard to follow.

Look, certainly, certainly on the gas side for us in Mereenie, we have an enormous amount of government support. It's mainly at the territory level. For those who sort of follow the supply demand, what's going on in the gas market in the territory. There's a large offshore field, The Blacktip field, which supplies roughly half of the territories gas in conjunction with our fields in the South from the Amadeus Basin. And that offshore field has had all sorts of problems so that they've been backfilling the domestic market with we diverted LNG from the INPEX Ichthys project. So the government in the territory, notwithstanding Beetaloo gas coming at some point, hopefully. There's an immediate issue right here right now in gas outages in the territory.

And so our field seen is critically important, and we have a lot of support from the local government at a federal level, look, they've said gas is key to the energy transition. And you will have read about the deal they -- the federal government signed with the Trump administration around Rare Earth's. Well, 1 of those Rare Earth's mines, the Arafura mine is 250 kilometers from our gas fields. So -- and guess what they need to refine the Rare Earth, they need gas. They need high intensity heat.

So that project will need gas, and it's federally supported. So doing the dots, they will need considerable full amounts of gas for many years to come. On your earlier question on risks in the various countries. Look, in Thailand, we're onshore. We're providing gas to a critical power station, providing power right through that part of the world. Obviously, going into the deal, we're very mindful Exxon leaving and small companies coming in. We've pressed upon ourselves. We need to be up there a lot to establish relationships with the -- both the government and indeed, our partners. And safe to say everything I've seen over the last -- throughout this year has been very, very positive.

And we bring a breath of fresh air. We mentioned -- I mentioned the booster compressor project at Nam Phong, Exxon weren't doing anything. They weren't particularly interested in these assets. They were immaterial to the Group. So us getting after it, helping them to deliver more gas to help them secure their energy security for the future is only being taken positively. China, obviously, we're always alive to the risks you're referring to, but as I've said to a lot of people, we're essentially a domestic producer helping the Chinese to produce their own oil and haven't forbid, prevent them from having to import it from the Americans or anybody else.

So all we over here is they want more of it, and they want more of it out quicker. And that only has boded very well for us over more than a decade, we've been in production, and we see that continuing.

This is not working. Okay, thank you, Richard. And given there are no more questions, I'll move on to the formal part of the meeting. The notice of meeting has been sent to all registered members, I move the Notice of Meeting be taken as read. The minutes of the previous Annual General Meeting have been approved and signed in accordance with the Corporations Act. A copy is available for inspection at Horizon's office, should any member wish to do so.

I'll now move on to the business of the meeting, which includes the resolutions to be put to the meeting. Prior to each resolution being discussed, the proxies that have been received on that item will be displayed. As I mentioned earlier, all resolutions will be decided by a poll, and the live voting is now open on all items of business.

First item, the financial report, Directors' report and Auditor's report is to be considered and to receive by this meeting, those reports for the year ended 30th of June 2025. And the documents have been made available to all shareholders. There's no requirement for shareholders to approve these reports. Accordingly, item #1 is for discussion only, and there will not be a vote on this item. And I remind you that only shareholders of the company or their duly appointed representatives or proxies are permitted to ask questions. Are there any questions on those reports? No questions.

So we'll move on to Item 2, the adoption of the remuneration report. Meeting now considers this item for the year -- for the adoption of the report for the year ended 30th of June 2025. The Board unanimously recommends that shareholders vote in favor of this item. The proxies received in relation to the item are displayed. The rem report is now open for questions. Do we have any questions? No questions.

So I'll move on to item #3, which is the election of Catherine Costello as a Non-Executive Director. Ms. Costello, having been appointed to the Board since the last Annual General Meeting of the company, retires in accordance with the constitution and being eligible is nominated for election as a Non-Executive Director of the company, as announced by the company on the 2nd of July 2025. Ms. Costello's appointment coincided with the planned retirement of Sandra Birkensleigh after the release of the company's 2024-'25 financial results. Ms. Costello will assume the roles of audit of Chair of the Audit Committee and as a member of the Risk Committee following the conclusion of this meeting. I'll now invite Catherine to say a few words regarding her proposed appointment and her experience.

Thank you, Bruce, and good morning to everyone. Is that working? It's my pleasure to be appointed a Director of Horizon Oil. So let me tell you just a little bit about myself and then why Horizon Oil. So I'm an almost 30-year veteran in the resources industry, both operational and also at the corporate level. I love the industry resources of all sorts currently working in the critical minerals industry. And everything that's happening in the world at the moment is really relevant to not just my interest, but what I can contribute here to Horizon.

I'm a finance and corporate governance professional, having worked largely with listed companies, both domestically and internationally. And importantly, worked in across many jurisdictions with assets in many jurisdictions, which is really relevant here to Horizon because there are both positive and negative challenges that come with operating jurisdictions that you just have to keep your eye on. So that's something that I feel I can contribute to the management team and support the Board with as well. I have a very strong passion for financial governance that's in my DNA and as an independent director, will certainly bring that sort of integrity to everything that we do here at Horizon.

And then finally, just on Horizon Oil itself, I mean, I think it's a fantastic strategy that the company has adopted. The free cash flow and production growth focus is really important. The strategy of also considering significant distributions back to shareholders and balancing those 2. And then the ability to sort of strategically look at where we can grow the business is great as well. And I've got -- had significant experience with similar organizations, particularly around the M&A space and growing companies and looking at where we need to either divest and also expand.

So I'm looking forward to working with the management team and the Board and supporting you as shareholders as an independent director. Thank you.

Thanks, Catherine. The proxies received in relation to this motion are displayed on the screen. The other directors, including me, unanimously recommend that shareholders vote in favor of the resolution. An opportunity now for any questions on the resolution. Okay. Thank you.

I'll now move on to item 4, which is the reelection of myself as a Nonexecutive Director. I'm retiring by rotation in accordance with the constitution of the company and being eligible I'm standing for reelection as I have officially stood down from the Board right now. I now hand over to fellow Director, Peter Goode, to chair this item for the meeting.

Thank you, Bruce. The proxies received in relation to the motion are displayed. The other directors, including myself, unanimously recommend that shareholders vote in favor of this resolution. There's now an opportunity to discuss this resolution. And Vas will read out any questions on Bruce's reelection before we invite those shareholders who wish to speak.

We've received no questions on that. So just open the floor to any questions.

Okay. So let's ask if there's any questions from the floor. Okay. So in the absence of question, I will now hand over to the Chair and give you the meeting back for us.

Thanks, Peter. I'll now move on to Item 5. Item 5 is the renewal of the proportional takeover provisions contained in the articles of the company's constitution for a period of 3 years in accordance with the Corporations Act. Proxies received in relation to the motion are displayed. The other directors, including me, unanimously recommend that shareholders vote in favor of this resolution. There's now an opportunity for any questions on the resolution. Okay, no questions.

So we'll move on to Item 6. Item 6 is the approval of the grant of deferred short-term incentive rights to Richard Beament, Managing Director and CEO. The approval of the grant of STI Rights as part of the short-term incentive awards for financial year '25. The details of the rights plan are set out in the Notice of Meeting. Proxies received in relation to this motion are displayed on the screen, and now is an opportunity for any questions on this resolution. Thank you.

Move on to Item #7. Item 7 relates to an increase in nonexecutive director fee pool. And the meeting now needs to consider the item, the approval to approval to -- excuse me, approval of the maximum aggregate annual remuneration that may be paid to all nonexecutive directors in the company in any financial year commencing on or after July 1, 2025, be increased by $150,000 in total from $600,000 to $750,000 per annum. Article 11.2.1 of the company's constitution provides that the fees of nets may not exceed in aggregate in any year, the amount determined by shareholders. The company's constitution also provides that this amount may be divided among the nonexecutive directors in the manner and in the proportion determined by the Board. ASX Listing Rule of 10.17 and provides that a listed company must not increase the total amount of net fees without shareholder approval. Current fee cap of $600,000 was approved by shareholders at the company's 2009 AGM, and it's remained unchanged for the past 16 years. Fee cap Is inclusive of any superannuation contributions and nonexecutive directors do not receive any performance-related incentives or any retirement benefits in the company. If shareholder approval is not obtained, the current fee cap of AUD 600,000 will continue to apply. Additional information regarding the remuneration paid to each nonexecutive Director for financial year '25 is set out in the remuneration report, which is available on the Horizon website.

Proxies received in relation to this motion are displayed on the screen. There is now an opportunity for any questions on this resolution.

No questions, so we'll move on to the last item, Item 8, which is the establishment of a net share rights plan. The meeting now needs to consider item 8 approval of the grant of shares, share rights and the allocation of shares in the company on the vesting of those share rights to all nonexecutive directors who elect to sacrifice a portion of their fees during financial year '26, '27, '28 and '29, under the Non-Executive Director Fee Sacrifice rights acquisition plan. We are going to need an acronym for that.

The details of the share rights, the net share rights plan is set out in the notice of meeting. Proxies received in relation to this motion are displayed on the screen and now is an opportunity for any questions on the resolution.

Thank you. We're at the end of the items for voting. We will now conduct the polls. And I invite the company's Secretary, Vas to advise the poll procedure.

Thank you, Bruce. Gemma Coyle of Computershare Investor Services has been appointed returning officer for this meeting, and I'm satisfied as to Computershare's independence. If there is any person at this meeting who believes they are entitled to vote, but have not yet registered, could you please raise your hand for assistance? Every member present in-person or by representative, attorney or proxy, who holds a blue admission card is entitled to one vote for each share held. The resolutions on which you are required to vote are items 2, 3, 4, 5, 6, 7 and 8.

[ Voting ]

Thanks, Vas. Would you please indicate by hand if you require more time to complete and lodge your voting card. Any person who has not voted, please hold up your voting card. As all the other papers have been collected, I'll declare the poll closed. Counting of the results will take a little while, so I propose closing the meeting and announcing the results of the poll to the ASX this afternoon. Is there any other business that can be lawfully brought to the meeting?

Just one general question. Any other projects you have in mind that you're looking into or opportunities? Or do you believe you've got enough on your plate at this time.

Well, look, nothing that we are specifically engaged on, but we are looking constantly at opportunities. And Richard and the team have done a great job we are not rushing. We do not need to rush, but we need to be prudent and disciplined about what we do, and we'll continue to do that. Certainly, within our own assets, as Richard highlighted earlier, there are opportunities that we will be pursuing within those assets to -- yes. But our eyes are open to other opportunities. Thailand was an opportunity that probably took some years to get to fruition from when we first recognized them, and we will continue that disciplined approach. We're not going to -- we don't need to rush. So we won't rush and we're not going to pay more than we should.

So ladies and gentlemen, that being no further business, I declare the meeting closed, and thank you for your attendance. And feel free to stay and talk to the Executives and the Board. If you have some time. Thanks, everyone.