Horizon Oil's Mereenie Infill Drilling Program Targets Increased Gas Production
HORIZON OIL LIMITED (HZN) Share Update December 2024 Wednesday 4th
Horizon Oil Launches Mereenie Infill Drilling Program
Horizon Oil Limited has announced the start of its infill drilling operations at the Mereenie Field in Northern Territory, aiming to enhance gas production rates and support domestic supply commitments.
Instant Summary:
- Launch of infill drilling operations in Mereenie Field, Northern Territory.
- Two wells, West Mereenie-29 and -30, to be drilled.
- Expected increase in gas production by up to 6TJ/d.
- Drilling program to last approximately two to three months.
- Horizon Oil's share of costs funded from existing cash reserves.
- Strategic alignment with NT Government Gas Sales Agreement.
Drilling Program Overview
Horizon Oil Limited has commenced an infill drilling program in the Mereenie Field, located in the Northern Territory, Australia. The program involves the drilling of two crestal gas production wells, West Mereenie-29 and West Mereenie-30, using the Ventia 101 rig. This initiative is expected to enhance gas production rates significantly, with an additional 6 terajoules per day (TJ/d) anticipated.
The drilling operations began on December 5, 2024, and are projected to continue for two to three months. The wells are strategically positioned near existing Pacoota 3 Reservoir producers, aiming to maximize output from the established infrastructure. This move aligns with Horizon Oil's broader strategy to invest in production growth and support the domestic gas market.
Strategic Importance
The Mereenie infill drilling program is a critical component of Horizon Oil's recent acquisition strategy and its long-term gas supply agreement with the Northern Territory government. The increased production capacity will allow Horizon to fulfill its commitments under the NT Government Gas Sales Agreement, providing a stable supply of gas to the domestic market.
Central Petroleum is operating the drilling program, with Horizon Oil covering its share of the costs from existing cash reserves. This financial strategy underscores Horizon's commitment to prudent fiscal management while pursuing growth opportunities.
The commencement of the Mereenie infill drilling program is likely to have a positive impact on Horizon Oil's stock, as it demonstrates the company's proactive approach to increasing production and securing strategic agreements. By boosting gas output, Horizon is well-positioned to capitalize on domestic market opportunities, which could enhance investor confidence and potentially drive stock value upward.
Investor Reaction:
Analysts are expected to view the drilling program positively, as it aligns with Horizon's strategic goals of production growth and market expansion. The ability to fund the project from existing cash reserves may also be seen as a sign of financial strength and stability.
Conclusion:
Horizon Oil's infill drilling program at the Mereenie Field marks a significant step in the company's growth strategy. Investors should monitor the program's progress and its impact on production rates, as well as Horizon's continued alignment with domestic gas market needs. Staying informed on these developments will be crucial for assessing potential investment opportunities.