Horizon pulls plug on Thai acreage

Australia’s Horizon Oil has pulled out of all its drilling concessions in the Gulf of Thailand,
handing stakes in five blocks to partner Pearl Energy, which operates the licenses.

Horizon chief executive Brent Emmett said a likely six-month delay in expected cash flows from the Maari development off New Zealand, plus tough economic conditions and slumping oil prices, had squeezed the company’s cash reserves. The company said the divestment in blocks G1/48, G3/48, G6/48, G10/48 and G11/48 had eliminated drilling obligations for 2009 worth between $22 million and $30 million and that it had no remaining interests in any of the blocks. It said its obligations to carry Singapore-based Pearl through exploration in blocks G1/48, G3/48 and G6/48 had been offset against its expenditure to date, and as a result neither Horizon nor Pearl had paid any considerations as part of the divestment. Horizon said it would recognise an impairment of $6.8 million in its half-year accounts to the end of December 2008. Horizon chief executive Emmett said: “Our priorities are clear – until Maari is on stream later this month and market conditions improve, the focus will be directed towards Horizon Oil’s development and pre-development projects, where proven and probable reserves and resources already exist and provide greater certainty of generating shareholder value, he added.

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