ExxonMobil Sells Producing Thai Assets

Horizon Oil Ltd. has signed an agreement with Exxon Mobil Corp. to acquire the United States energy giant’s stakes in three development licenses onshore Thailand, marking the Australian upstream company’s re-entry into the Southeast Asian country.

Horizon will own 60 percent of the E5 block, which contains the producing Nam Phong conventional gas field, and 7.5 percent in E5N and EU1, which contain the producing Sinphuhorm conventional gas and condensate field.

The acquisition will be made through a consortium. Horizon will acquire 75 percent of the shares of Exxon Mobil Exploration and Production Khorat Inc. (EMEPKI). Matahio Energy will obtain the remaining 25 percent and has agreed to manage the employees of the new consortium and operatorship of Nam Phong, Horizon said in a regulatory filing.

The assets will grow Horizon’s net production by about 2,000 barrels of oil equivalent (boe) a day and proven and probable reserves by 3.9 million boe, based on figures as of January.

Horizon sees “potential to enhance value through life extension at both fields, infill drilling, facility upgrades and optimizations, together with additional opportunities in both assets”.

Gas from the assets has been contracted long-term by state-owned PTT for use at a regional power station, Horizon said.

“Horizon’s headline cash consideration for the 75 percent holding in EMEPKI is US$30 million, with an effective date of 1 January 2025, plus up to US$7.5 million in contingent payments over the next six years which are subject to certain conditions being met”, the company said. “The upfront cash consideration will be substantially funded from a credit approved amendment to our existing Macquarie Bank debt facility which will provide additional debt capacity for the acquisition of up to approximately US$22 million, with up to a further US$10 million of finance made available following completion of the acquisition”.

Horizon chief executive Richard Beament commented, “In partnering with Matahio, we have structured the transaction to play to Horizon’s strengths as a non-operator, being also right-sized, requiring minimal capital and with upside”.

Thailand is “a jurisdiction we know reasonably well from our time as offshore explorers between 2006 and 2008”, Beament said. “Whilst financial pressures during this period, primarily driven by Maari development capex commitments, led Horizon to divest its Thai interests, we have always viewed Thailand as an attractive jurisdiction for oil and gas investment”.

“The acquisition is expected to meaningfully increase net operating cash flow over the next 5+ years and provide a substantial production base beyond the end of the decade”, Beament added. “The assets provide the Company with further diversification into gas production in a country with growing gas demand. The power station using the gas from these fields has a key role in providing essential energy for domestic consumption in north-east Thailand and aiding the country to achieve its energy transition objectives”.

To contact the author, email jov.onsat@rigzone.com