Horizon Oil Limited (HZN)



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General Information
Company Name: Horizon Oil Limited
Stock Code: HZN
Website: www.horizonoil.com.au
GICS Sub-Industry: Oil & Gas Drilling
Market Cap ($M): 345
Equiv. Shares (M): 1,302

Current Price Data+
Current Price Open High Low Last Close Volume Price Movement
 $ 0.275 $ 0.275 $ 0.280 $ 0.270 $ 0.265 784,480 $ 0.010  3.774 %

Current Broker Consensus Recommendation more
Recommendation: Strong Buy (1)
Recommendation Date: 16th Oct 2014
Brokers Surveyed: 2

Company Overview

Business Description:
Horizon Oil Limited (HZN) is an oil and gas exploration, development and production company with projects located in New Zealand, Papua New Guinea and China. The company focuses on three main areas, being the producing Maari field offshore New Zealand, and assets under development in Papua New Guinea and China. FY13 net working interest share of production was 503,619 barrels of oil.

Strategy Analysis:
HZN have operations in China, PNG, NZ and Thailand in accordance with a focus on Southeast Asia where there is a strong demand for oil and gas, a mature operating environment and limited competition from big companies. HZN's emphasis is on bringing its existing discovered reserves and resources into production with minimal exposure to geological risk. It uses current cashflows from the Maari field to fund its capital program and selects exploration targets with a modest risk and reward profile. HZN also seeks to form joint ventures with partners who are qualified to operate projects. This approach allows management to add value by contributing its experience to these JV's, without need to manage day-to-day operations. Horizon Oil reported a net loss of US$6.78m for the half-year ended 31 December 2012, resulting from gross profit from operations of US$11.6m offset by depreciation and amortisation of $2.1m, income and royalty tax of $6.1m, financing costs of US$2.8m and an unfavourable movement in the mark-to-market valuation of the convertible bonds of US$4.7m substantially caused by an increase in the company's share price. Revenues from ordinary activities were US$18.26m, down 35% from last year. Basic and Diluted EPS was (0.6) US cents compared to 0.75 US cents last year. Net operating cash flow was US$5.28m compared to US$3.9m last year. No dividend was declared.


Financial Summary
Year to Jun NPAT EPS EPS chg (%) PER DPS Yield (%) Franking (%)
2016  F -- 2.3 -20.4 11.5 -- 0.0 --
2015  F -- 2.9 172.6 9.2 -- 0.0 --
2014  A 13.6 1.1 231.3 31.7 0.0 0.0 --
Source: Aspect actuals / Thomson IBES estimates

Peer Comparison
EPS Growth (%) P/E (%) Dividend Yield (%)
Company Mkt Cap 2014 A 2015 F 2016 F 2014 A 2015 F 2016 F 2014 A 2015 F 2016 F
Horizon Oil (HZN) $339 M 2.3125 1.7264 -0.2042 24.5283 8.9965 11.3043 0.00 0.00 0.00
Liquefied Natural (LNG) $1,301 M -- -- -- -- -- -- 0.00 -- --
Paladin Energy (PDN) $314 M -- -- -- -- -- 10.0309 0.00 0.00 0.00

Market Comparison
Earnings P/E Ratio P/B Ratio P/E Growth P/S Ratio
HZN 1.58 16.5 1.46 0.35 2.21
Market 0.89 14.9 1.21 1.68 1.48
Sector 1.13 11.9 0.85 0.67 4.64

Directors
Name Position Start Date
Mr Brent D Emmett Chief Executive Officer,Executive Director 18 September 2000
Mr Fraser Eric Ainsworth Non-Executive Chairman,Non-Executive Director 03 December 2001
Mr John Scott Humphrey Non-Executive Director 10 September 1990
Mr Andrew Murry Stock Non-Executive Director 02 February 2011
Mr Gerrit Jan de Nys Non-Executive Director 14 July 2007

Management
Name Position
Michael Sheridan Company Secretary, Chief Financial officer
Michael Lyon Joint Company Secretary
Alan Fernie Manager Exploration and Development, Horizon Oil Limited

Substantial Shareholders
Holding Name
65,589,728 (5.05%) Northcape Capital Pty Ltd
131,052,396 (10.10%) Commonwealth Bank of Australia
288,614,345 (22.24%) Austral-Asia Energy Pty Limited as trustee for Triplex Global Ventures Limited

Calendar of Events
Date Event
26 August 2015 Report (Prelim)
30 July 2015 Report (Quarterly)
29 April 2015 Report (Quarterly)
27 February 2015 Report (Interim)
30 January 2015 Report (Quarterly)
30 October 2014 Report (Quarterly)
© 2011 Morningstar, Inc. All rights reserved. The data and content contained herein are not guaranteed to be accurate, complete or timely. Neither Morningstar, nor its affiliates nor their content providers will have any liability for use or distribution of any of this information. To the extent that any of the content above constitutes advice, it is general advice that has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 (a subsidiary of Morningstar, Inc.), without reference to your objectives, financial situation or needs. Before acting on any advice, you should consider the appropriateness of the advice and we recommend you obtain financial, legal and taxation advice before making any financial investment decision. If applicable investors should obtain the relevant product disclosure statement and consider it before making any decision to invest. Some material is copyright and published under licence from ASX Operations Pty Limited ACN 004 523 782 ("ASXO"). DISCLOSURE: Employees may have an interest in the securities discussed in this report. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/fsg.asp.

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