Horizon completes acquisition of 25% stake in Mereenie field in Australia

Horizon Oil announced on June 11 that it had completed the acquisition of a 25% non-operated interest in the OL4 and OL5 development licences, which encompass the Mereenie oil and gas field, located in Australia’s Northern Territory.

The deal to buy the stake from Macquarie Mereenie was announced earlier this year. The acquisition was executed together with New Zealand Oil and Gas, an incumbent Mereenie joint venture partner, which acquired a further 25% participating interest in OL4 and OL5 from Macquarie on identical terms.

The effective date of the transaction is April 1, 2023, with revenues earned and costs incurred during the period from the effective date to completion adjusted against the initial cash consideration of A$42.5mn ($27.6mn).

As part of the deal, Horizon Oil is acquiring 6.4mn barrels of oil equivalent (boe) of 2P (proven and probable) reserves. The total consideration, including both the headline and deferred contingent payments, amounts to $33.4mn. This results in an acquisition cost of approximately $5.3/boe.

Funding for the initial cash consideration is from a new A$42.5mn senior debt facility, which Horizon recently executed with Macquarie Bank.

The Mereenie field is the largest onshore gas field in the Northern Territory. Central Petroleum remains the operator of the Mereenie joint venture and manages the gas sales function on behalf of Horizon, New Zealand Oil & Gas, and Cue under a joint marketing agreement.