Thank you for standing by, and welcome to the Horizon Oil Limited Half-Year Results Presentation. All participants are in listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to enter it into the Ask a Question box and click Submit. I would now like to hand the conference over to Chris Hodge, Managing Director and Chief Executive Officer. Please go ahead. Thank you very much. I'd like to welcome you to the Horizon Oil 2022 half-year results presentation. My name is Chris Hodge, the company's CEO, and with me is Richard Beament, the company's CFO. I'll make a few introductory comments covering the full 12-month calendar year period before handing over to Richard to run through the half year results to December 2021 in some detail. I'll then cover the operational performance, highlight the upcoming activity for what is shaping up to be a very busy few months, and conclude with some guidance for financial year 2021. We can then open up for questions. Here we have the compliance statement, and during the course of this presentation, we will be making some forward-looking statements. While we take every care in the preparation of these statements, actual results may materially differ depending on a variety of factors. I encourage you to read the disclaimer in full. Unless I specify, in this presentation, all dollars are United States dollars. What a difference a year makes. At the 2020 AGM, held just over a year ago, consensus oil price forecast from the experts was around $45 a barrel. A year ago, the oil price was $50 a barrel, and it is now nudging $100 a barrel. Clearly, don't believe the experts and don't rely on consensus either. The current high oil prices reflect geopolitical tensions, but the underlying disconnect between increasing undersupply and the strengthening demand, in our view, strongly suggest that oil prices will remain at these levels for some time to come. Our oil production, especially from Beibu in China, has been exceptional, but the financial results have, of course, been supercharged by the oil price. In summary, we produced 1.3 million barrels during 2021. Sales were 1.16 million barrels, 190,000 barrels less than the production, priMaarily due to the timing of lifting from Maari. Despite this, we received $77 million in revenue. A reminder that during the year, we received AUD 18.3 million from the exercise of 300 million warrants, and then returned about AUD 49.4 million to shareholders via a capital return and an on and off market buyback. Despite the capital return, we ended the year with a healthy net cash position of $15 million. Turning now to the operational highlights for calendar year 2021. We had no loss of containment incidents and recorded a strong safety record over the course of the year. In keeping with our strategy, our priority has been to minimize production decline, reduce costs, and maximize returns from the producing assets, and to prepare for the future by maintaining a continuous pipeline of projects. China production performance has been exceptional, close to 10,000 barrels of oil per day in recent months. The reason was in part due to two successful infill wells, but primarily due to several successful workovers, installing larger capacity pumps and some innovative production optimization. Cash operating costs remained below $20 a barrel, and most importantly, the 12-8 East platform was substantially completed and is currently on location undergoing commissioning. Turning now to sustainability and looking at our four ESG priority areas. Our attention to the various aspects of sustainability continues to be an important area of focus for us. We ensure that it is credible, right-sized for Horizon, and meaningful for our shareholders and the wider community. I'd like to draw your attention to our response to climate change, where we now have an ambition to achieve net zero greenhouse gas emissions by 2050 in line with the Paris Agreement. However, our immediate focus is efficiency to minimize Scope 1 and Scope 2 emissions and to apply offsets or credits as appropriate when we are unable to abate emissions. As a reminder, in New Zealand, based on our emissions, we are required to purchase units in the New Zealand trading scheme. Lower emissions mean less units to buy. Therefore, there is a strong financial incentive for us to minimize our emissions. Now, looking at our strategy or revising our strategy. Before I pass over to Richard, let me just touch upon this. Firstly, we are being successful in maximizing our free cash flow by production-enhancing activities, efficiencies, and cost minimization. Secondly, we're continually reviewing our capital management options. Thirdly, we will invest in new business if the strategic and commercial elements are exceptional. I'll have more to say on these strategic priorities later in this presentation. Let me now hand over to Richard to run us through the financial results. Thanks, Chris. Look, I'll first focus on the half-year results to 31 December 2021, before looking at the 2021 calendar year results against previous years. Let's move to the half-year highlights. As can be seen in the table on the right in this slide, the half-year results were very positive, with significant increases in virtually all key metrics when compared against the prior comparative half year. As Chris has mentioned, the very strong half-year results were underpinned by sustained strong production, with significant growth in revenue, EBITDAX and profitability driven by the strengthening oil price. Production volumes were 3% higher owing to the successful execution of a multi-well workover program at Block 22/12, and the restoration of production levels at Maari following workover activity. Sales revenues were 50% higher than the prior comparative period, despite the deferral of a scheduled Maari lifting until early January, which impacted sales volumes. The higher revenue was, of course, driven by the 78% increase in realized oil prices to just under $74 a barrel for the period. The increased revenue, combined with the maintenance of cash operating costs below $20 a barrel, which was aided by the recent cuts to corporate costs, drove a surge in EBITDAX and cash flow from operations by over 150% to $28 million and $25 million respectively. This cash flow helped to rebuild the company's cash position to just under $24 million at the period end, following the substantial $0.03 Per share capital return made to shareholders during the period, which resulted in a cash outflow of just under $35 million. Pleasingly, we exited the period with a strong balance sheet with net cash at just under $15 million. Dissecting cash flow, in this next slide, we can see that over 78% of the $44.4 million cash on hand at the end of FY 21 was returned to shareholders through the capital return. With residual cash held, largely reinvested in capital growth programs, including the Block 22/12 12-8 East development, infill drilling and workover program, or used to repay debt. The substantial cash flows generated from operating activities during the period of $25 million helped to rebuild the cash position at period end and ensure the group has the necessary funds to cover the remaining 12-8 East development costs of approximately $15 million, meet debt repayments over the next six months of just under $9 million, and fund further proposed infill drilling and workover activity in Block 22/12, which may cost up to a further $14 million. Included in net revenue of $45.3 million were $1.4 million of hedge settlements realized on the sale of 300,000 barrels of oil covering just over half of our sales volumes. Hedging during this period and into the first half of 2022 calendar year was deemed appropriate under the group's risk management policies, given the group's significant capital and debt commitments over this period, as mentioned earlier, particularly following the significant capital return made in August, which reduced cash levels down to around $10 million. Volatility in oil markets in the latter part of the half year following the emergence of the Omicron variant of COVID-19 also weighed into the company's considerations, particularly with the concentration of Maari sales scheduled in January 2022. Of the 250,000 barrels of hedges in place at the end of the half year, covering the period to June 30, 110,000 barrels rolled off in January, which were largely focused on spreading the oil price risk associated with the January Maari lifting over the three to four month period in which the sales volumes were actually produced. Looking forward, with our current cash balance and many of the company's significant capital and debt commitments forecast to be extinguished by the middle of the year, we currently anticipate that our need for significant levels of hedging will diminish. We expect that the need for future hedging will be more limited and continue to be focused on ensuring commitments can be met and managing the concentration of oil price risk associated with less frequent Maari liftings. I also note that in our results are gains on 50,000 barrels of oil price swaps, which were undertaken to mitigate the group's exposure to oil price volatility and its impact on the drilling costs of the 12-8 East development, which are directly linked to the oil price. These swaps for the purchase of crude oil were entered into when oil prices were only $45 a barrel, with half of these instruments maturing at the end of the half year, resulting in the subsequent cash receipt of approximately $900,000 during January 2022. The remaining instruments mature in March, with the related cash receipt, which is currently valued well in excess of $1 million scheduled for April. These hedges have allowed the group to cap the forecast 12-8 East development cost below $19 million. Now to help dissect the half year results further, the next chart shows the key elements which have driven the growth in the underlying profit result of approximately $7 million, and clearly shows the significant impact of the 78% higher realized oil price, partially offset by the deferral of the Maari lifting to early January. Corporate costs, exploration expense and financing costs continued to fall following a continued focus on cost-cutting initiatives and reducing debt levels. As can be seen, income taxes and royalties have significantly increased, driven by the higher revenue and profitability. As expected, the special oil gain levy in China, which is levied on received oil prices over $65 per barrel, is an increasing cost, particularly at current oil prices, with each dollar per barrel above $85 per barrel charged with a levy of $0.40 In the dollar, with a sliding scale levy applying down to $65 a barrel. This contributed $1.3 million of additional cost for the period. Now turning over to the next slide, we can look at the full calendar year results compared against the previous four years. As in previous presentations, we've included some detail of the impact of Beibu cost recovery revenue in earlier years to assist with normalizing the results. As mentioned previously, this was additional revenue earned in earlier years to reimburse the company for historical exploration expenditure in China and was largely recouped by the end of the 2019 financial year. The first of these slides shows that the base production was broadly in line with the five-year average, with sales volumes lower due to the deferred Maari lifting of approximately 116,000 barrels to January. Importantly, production levels were sustained, particularly at Beibu, despite natural reservoir decline through additional infill wells early in the calendar year, followed by a production enhancing workover program later in the year. The ability of the Block 22/12 joint venture to sustain consistent production levels through infill drilling and other initiatives, and to continue to maintain low operating costs, have been the predominant driver of Horizon cash flow over recent years and provided the confidence to further invest in infill drilling, workovers, and the 12-8 East development. Maari production has also been a significant contributor, particularly over the last four years, owing to the successful acquisition of an additional 16% interest in the Maari fields back in 2018. The chart also clearly shows the contribution of Beibu cost recovery volumes to sales volumes in the years FY 17 through FY19, which has now ceased as historical exploration expenditure amounts have been recouped. The revenue chart also clearly shows the contribution to revenue of the Beibu cost recovery sales in earlier years. Once we strip this away, we can see the impact of oil price volatility over recent years with the strong recovery in revenues during the current year, driven by an increase in average realized oil prices of over $20 a barrel to approximately $65 per barrel for the full calendar year. Pleasingly, oil prices have continued to rally to over $90 a barrel, which bodes well for higher forecast revenues and cash flow generation in the coming months. The next slide again shows the relative impact of higher oil prices on the group's profitability in the 2021 calendar year, with a 74% increase in EBITDAX and dramatic increase in underlying profit from less than $1 million to just shy of $25 million. Given production levels were relatively consistent between 2020 and 2021, this highlights the company's significant leverage to the oil price. Pleasingly, cash operating costs continued to be maintained below $20 a barrel, with a slight increase largely driven by increased workover activity and certain operating costs which are linked to the oil price. The next slide shows the continued strong free cash flow generation, with the orange line in the chart on the left normalized to exclude the cost recovery cash flows in earlier years. This again shows the impact of the higher oil price on free cash flow in the current year and highlights the increased investment commenced during 2021 to drive future production and aid the company to sustain free cash flow generation. Now the final chart on the right shows the net cash, net debt position. Here we can see how the company has delevered over the past five years with the strong and sustained free cash flow generation from the group's assets having driven consistent and sustained debt reduction from a net debt position of over $94 million at the end of calendar year 2017 to a strong net cash position of $14.7 million in only four years, after returning just under $35 million to shareholders in the current year by way of a capital return. That represents free cash flow generation over a four-year period of over $140 million or approximately AUD 200 million. Our focus is to continue to drive this free cash flow generation from our assets out into the future by extracting maximum value. The low operating costs, rising oil prices, coupled with this rapid de-gearing and a return to a significant net cash position, provided the confidence to implement various capital management initiatives during the calendar year and return significant value to shareholders. I'll now pass over to Chris to provide an update on our asset portfolio and the outlook for the company. That's great. Thanks a lot, Richard. We have two producing assets. One in China, in the Beibu Gulf, and the other in New Zealand, Maari. Turning initially to the China Block 22/12, we have reliable high-margin production. Production is currently around 9,400 barrels a day from 19 wells across five discrete fields. We have managed to maintain production rates through a combination of near-field drilling, increased water handling, and innovative production optimization via workovers, as well as continually improving operating practices. We, along with the joint venture, work hard to continuously identify and evaluate infill, well and near field exploration opportunities to support production in the nearer term and the longer term. We have our new development, 12-8 East, from which we anticipate first production within the early part of the second quarter this year. Turning to China appraisal and exploration opportunities. The joint venture has a strong portfolio of infill, appraisal, and near field exploration opportunities, four of which are proposed for drilling in 2022, highlighted in orange. The North well is an infill well and replaces the Silver well, which we alluded to at the AGM. The M3 well is an infill appraisal well. The A7 Weizhou is designated as an exploration well, which will be converted into a water disposal well if it is unsuccessful. The Southeast well is a dual objective exploration well, targeting conventional reservoirs as well as a fractured basement target. Success in these wells will extend the production platform or extend the production into the longer term. This is a drone picture of the self-installing platform at 12-8 East, which was taken a few weeks ago during the barge transportation to the location. Note the four legs of the platform, which were then in an elevated position and which have subsequently been lowered down, and so that the platform is now stably secured onto the seabed, pretty much as in this diagram here on the right. The export pipeline is now laid and connected to the 12-8 West platform and is currently undergoing pressure testing. The drilling rig is expected to arrive by the end of the month and to commence drilling shortly thereafter. We estimate that first oil will flow early in this second quarter. Oil production is forecast to average 4,000 barrels of oil per day in the first year of production, and success in this first phase of development may lead to additional infill wells. Most importantly, by having this platform, we can access appraisal and exploration targets. The 12-8 East well, this is the dual target exploration well, as depicted on the prior slide, is an excellent example of this being able to access targets from this platform. Turning now to New Zealand and Maari, where we have continued stable reservoir performance. The production decline rate has been arrested through continued water injection and well optimization, and the workovers of three wells have been completed. Annual maintenance shutdown is currently in progress, following which we anticipate installation of the Elmar 6A desanding unit, which is scheduled to be functional during March. Of course, we continue to seek efficiencies and to optimize production. Looking to the way forward at Maari, the OMV sale to Jadestone is still pending, but OMV, to its credit, continues to operate the field effectively. This sale was announced in November 2019, but was held up by the Crown Minerals Amendment Bill, which introduces a number of provisions to mitigate the risk to the New Zealand government of having to carry out and fund decommissioning of petroleum infrastructure. The bill received Royal Assent in December 2021, and Jadestone is now seeking clarity from the New Zealand regulator on any further steps needed to close the Maari acquisition. Of immediate relevance to Horizon, and a key provision of the bill, is that permit holders will be required to maintain one or more forms of financial security to cover decommissioning. We currently hold an accounting provision of $32 million for our share of Maari decommissioning, and we intend to progressively set aside funds from cash flow for the next three to four years. Looking to the year ahead, looking at the operations activity, it's pretty much characterized by two phases. There's a very busy period of significant operations through to August, and that's followed by forecast higher production commencing mid-year, the direct result of those operations. At the 12-8 East project, drilling commences in the next couple of weeks. First oil expected early in the second quarter from one or two wells, and the remaining wells will be drilled over the subsequent months. The final well in the 12-8 East program will be that Southeast well, that Southeast near field exploration well targeting conventional reservoirs and also basement. Concurrent with the 12-8 East drilling program, we plan to conduct at least three workovers. In the past, these workovers being an extremely efficient way of boosting production, typically by installation of larger capacity pumps. This year, we believe it will be equally successful. Also concurrent with the 12-8 East drilling program will be the drilling of two wells, infill and near field. These are the M3 and the North well, which I referred to previously. Total cost of all this activity to Horizon is estimated to be in the range $23 million-$29 million. We should not forget that a precursor to successful operations activity is sound planning, and we will be doing this in conjunction with the operators for both Beibu and for Maari. Importantly, by mid-year, we will have a sense of the production performance of 12-8 East and potentially be in a position to assess the viability of further development wells. Please note that this schedule is still a little bit indicative as we have not received final joint venture and regulatory approval of all of the elements. Let's have a look at the 2022 summary activity outlook. In keeping with a key element of our strategy, we plan to capitalize on the high oil price to maximize value. In China, we look forward to first oil from the 12-8 East project in a safe, efficient and cost-effective manner. We also look forward to drilling infill appraisal and exploration wells. In New Zealand, we hope that the New Zealand regulators reach a decision in a timely fashion to allow us to move forward tangibly with Maari value-adding activity. With respect to ESG, we will continue to improve our response and in particular seek to quantify a pathway to net zero. We will also actively evaluate capital management options and keep abreast of new business opportunities as well as maintain a prudent hedging position. Turning now to guidance. This is guidance for financial year 2022. We are anticipating a strong end to the financial year, driven by 12-8 East project coming on stream by production enhancing workovers and continued high oil prices. We therefore have production guidance net to Horizon of 1.35-1.45 million barrels. Sales, we expect to be in the range 1.2-1.3 million barrels, somewhat less than production. Sales lag production and somewhat exacerbated by the timing of Maari liftings, with the next lifting anticipated in mid-May, leaving some six weeks of production in the FPSO tanks by year-end. If oil prices are maintained around about $80 a barrel, we anticipate $90 million-$100 million of revenue. Finally, our EBITDAX estimate is $60 million-$70 million, following continued focus on cost minimization and other initiatives to maximize earnings. We don't provide any guidance on any capital management initiatives at this time. Needless to say, this element of our strategy is a priority for the board, and we are continually reviewing our capital management options. Due to the high levels of operational activity during the next few months, combined with some timing uncertainties, we will be in a much better position to quantify options as the financial year progresses. While you ponder this last slide and consider any questions, Matt Birney from the Bulls N' Bears radio segment broadcast across Australia commented that Horizon is a real company making real money and making crazy big profits from its two producing oil assets. Great feedback. I think he must have been looking at a whole lot of Queensland companies that had lots of contingent resources and no production. It's always nice to have a compliment. With that, look, Richard and I will be very pleased to answer any questions you may have. The first question we have. Or we've got a couple of questions around hedging. I guess basically, what is the hedging strategy of management for second half of FY 22 going forward? And is there any view for considering forward hedging production out to, say, December 2023? Yeah, look, I can probably best answer that. Look, I did cover it earlier on in the presentation, but you know, fundamentally, our hedge policy is around making sure we can meet our commitments. You know, as I've alluded to, we've got quite a significant capital program through until the middle of the year, as well as the debt to pay down and hence the current sort of hedge levels we have in place are there to secure the cash flows for that. Once we get post the middle of the year, we anticipate that our level of commitments will be significantly diminished. Indeed, we'd expect by that point that our cash balance has grown further. Our need for significant levels of future hedging will diminish, and we wouldn't be anticipating putting in significant levels of hedging beyond that date. You know, I did mention we are experiencing more infrequent liftings at Maari, and that's just a function of you know, the marketing arrangements to maximize the marketability of the crude. You've seen through the last 12 months or so that we generally only have a Maari lifting every three or four months. We have undertaken some hedging to try to spread oil price risk across the months in which the production occurs. That's really you know, probably been the more of the focus as we sort of unwind the levels of commitments. The sort of comment around or question around, you know, are we considering longer term hedging going out, you know, 12 months or 18 months? The answer to that is no for a couple of reasons really. You know, the need for it is diminished. You know, some years ago we had significant debt levels, and we undertook hedging going out, you know, very long periods. We're also very mindful of the steep backwardation in the forward curve. While we see spot prices today, you know, $97-$98 a barrel, if I was to hedge out 12 months, you know, it would be something in the low 80s, where we could actually secure pricing. You lose a lot on the way. Then there's also some fairly unintended and, you know, impactful tax and royalty consequences with deeply out of the money hedge position. We have to be fairly mindful of that when we hedge, and hence we never hedge, you know, significant volumes. Similarly, we try not to go too far out into the future. Great. Thanks, Richard. The next question. Chris, can you give guidance on, A, when it may be prudent to return additional funds to shareholders and, B, the possible nature of these returns, either capital dividends or buybacks? No, it's an important question. During the course of this presentation, I tried to give some indication on what our capital management initiatives would be. Just to reiterate, yes, despite the high oil price, we've got a very heavy duty capital expenditure program coming up in the next six months. While we think that 12-8's will come on strongly, from you know starting in the second quarter, we're not entirely sure what the timing may be, and also we're not quite sure how the sequencing of those wells may occur. We've got some production uncertainties. The timing of the workover is also you know not exactly secure. Due to these high levels of activity, some of these timing uncertainties with respect to oil production, we prefer not to be giving any guidance just right now. As the half year progresses, we'll be in a much better position to do so. As to what form the capital management may take, once again, this is a critical area for the board. We discuss this regularly, but because of the uncertainties in the near term, we're not really in a position to provide anything more specific on that. Great. Thanks for that, Chris. Next question we have is, have any assets recently been assessed as potential exceptional acquisitions? We've seen some, but part of the reason why they would be exceptional would be they, it has to be at the right price. Frankly, we've seen some assets which would be a great contribution to our portfolio, but they're not at the right price, so we move on. We're being very opportunistic about this. The main game for us is maximizing value from the existing assets, but we're well and truly connected with the BD out there. Yeah, we'll continue reviewing, and hopefully we'll find something that meets the attributes that we're looking for. Great. Next question we have is around the windfall special levy in China. Can you please confirm how that sort of operates? Yeah. Look, as I mentioned in the presentation, this is not a new thing. There's a special oil gain levy or windfall levy in China. It's, you know, a little bit akin to, I guess, the PRRT here or the, you know, the royalty legislation in New Zealand. It's more of a, call it a super profits tax, call it what you will, but it essentially operates once oil prices exceed $65 a barrel. For every incremental dollar you earn, on a received oil price above that level, you start to pay this levy. It kicks in at $65 a barrel, and you pay $0.20 In the dollar for every incremental dollar, and then it ratchets up to $85 a barrel. For oil prices over $85 a barrel, you pay an additional $0.40 In the dollar. You know, it's quite an impasse, but obviously you're still taking significant. You're still getting $0.60 in the dollar above that. The levy is tax deductible, so it's not a tax on a tax, so to speak. Yeah, it essentially means that incremental production, once you take into consider- or incremental revenues, once you consider the levy and income taxes, you're paying all in tax and levies and royalties of about 55% on incremental revenues earned. Great. Thanks for that, Richard. Another question regarding China. When you say producers are on average 9,400 barrels of oil per day, how many days should I multiply this to get an annual number? It doesn't really work like that, unfortunately. Firstly, the production from China and from oil fields declines as a certain rate. Probably the best way to answer that question is just to refer you back to the AGM presentation where we have a diagram in there which depicts the forward-looking production. Rather than multiply a daily rate by a certain number, have a look at that chart, and then you can hopefully get to the answer you're looking for. Thanks, Chris. The next question we have is on the 12-8 East development. Can you please provide detail as to whether all wells, being the exploration water injector wells, et cetera, will be drilled prior to first oil? I'm just looking at that again. More detail on the development of 12-8 East. Will all wells, including the exploration water injector wells, be drilled prior to first oil? No, they won't. See, the plan is to drill a couple of wells initially. They will be the first wells to come on. Then there will be some other development wells. The water injector will be towards the end of the program. Okay. Just keeping with the theme of 12-8 East, you've mentioned the potential for future infill drilling, if the first phase is successful. Can you elaborate on this? For example, how many targets are there or how many drill slots are available within the new platform? Okay. There are five available drill slots. The first stage here is to see the production from the initial wells. This field is really quite unusual. You can see from the maps that it's very large in extent, which means there's a lot of oil in place. The reservoir is very good, but the oil is quite viscous. Okay? So when these wells produce, there's potentially quite a large range in the rates that these individual wells may come on. So we need to see how these wells perform in the first instance and learn. We can find out what works and what doesn't. But clearly, if they're successful, we've got the ability to move in reasonably short order to drilling additional wells in those additional five slots. Okay. Thanks for that, Chris. One other question is: what's our worst case estimate of current known resource lifespan in China if the new drilling disappoints? Well, the lifespan takes us right out to when the PSC expires in 2029-2030. Regardless of whether this drilling disappoints, the production is sufficiently strong to see us right out to the end of the PSC life. Great. Thanks for that. The final question that we have is regarding Maari abandonment, and the question is whether there is a sinking fund at the moment, and what cash costs are anticipated to Horizon for that. Look, as Chris sort of alluded to, look, there's not a current sinking fund for Maari abandonment. Obviously this new legislation, we're likely to see the imposition of certain financial security requirements by the regulators. They haven't specified what we need to specifically put in place, but as Chris alluded to, we'll be looking to slowly set aside funds over the next three to five years to in order we can meet our obligations. We currently hold a provision in the accounts of our share being $32 million. We notably need to accumulate funds in that order. Great. Thank you, Richard. I think that concludes the questions for now. Thank you very much, Chris and Richard for that. I'd like to now hand you back to the operator for the conclusion of the webcast.