ExxonMobil, the major U.S. oil and gas company, has signed an agreement with Horizon Oil Limited, an Australian upstream energy firm, to sell some of its assets in Thailand. The deal includes the divestment of ExxonMobil’s stakes in three development licenses located onshore Thailand.
Horizon Oil’s New Stake in Thai Gas Fields
Under the terms of the deal, Horizon will acquire a 60% stake in the E5 block, which contains the Nam Phong conventional gas field. The Australian company will also gain a 7.5% stake in the E5N and EU1 blocks, which hold the Sinphuhorm conventional gas and condensate field. Both Nam Phong and Sinphuhorm are active, producing fields.
Partnership Structure and Matahio Energy’s Role
Horizon has stated that the acquisition will be completed through a consortium. Horizon will acquire three-fourths of ExxonMobil Exploration and Production Khorat Inc. (EMEPKI), with the remaining shares to be bought by Matahio Energy. This transaction marks Horizon’s return to the Thai energy market.
Impact on Horizon’s Production and Reserves
The acquisition strengthens Horizon’s portfolio by increasing its net production by around 2,000 barrels of oil equivalent (boe) per day. Additionally, its proved and probable reserves will rise by 3.9 million boe, based on January estimates. The gas from these fields is under long-term contracts with PTT, Thailand’s state-owned energy company, ensuring consistent demand for the gas at a regional power station.
Horizon plans to increase the fields’ value by extending their operational lifespan. The company intends to drill more wells at the fields and upgrade the facilities to optimize operations and improve production efficiency.
Deal Financial Structure
The acquisition will cost Horizon $30 million in upfront cash, with up to an additional $7.5 million in contingent payments over the next six years, depending on certain conditions. The majority of the initial cash payment will be funded through Horizon’s existing Macquarie Bank debt facility. The company also secured an approved amendment to its credit facility, allowing it to borrow an additional $22 million for the acquisition. Additionally, Horizon will have access to $10 million in financing once the deal closes.
Matahio Energy will take over operations at the Nam Phong gas field and manage the workforce within the consortium. Horizon will be a non-operating partner in the blocks but believes the deal’s structure will maximize its strengths and expertise, while requiring minimal capital investment.
ExxonMobil’s Market Position
ExxonMobil currently holds a Zacks Rank of #3 (Hold).
Meanwhile, other energy stocks with higher rankings include Archrock Inc. (AROC), Nine Energy Service (NINE), and NextDecade Corporation (NEXT). Archrock holds a Zacks Rank of #1 (Strong Buy), while Nine Energy and NextDecade are ranked #2 (Buy).
Other Key Energy Stocks
Archrock specializes in natural gas compression and generates stable, fee-based revenues.
Nine Energy Service provides completion and production services in major U.S. oil and gas basins, positioning it for growth.
NextDecade is an emerging player in the LNG sector, with a focus on expanding its liquefaction capacity to meet growing global demand for natural gas.
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