Horizon Oil acquires 25% Stake in Mereenie gas field in Northern Territory

Horizon Oil on February 14 said it had signed an agreement with Macquarie Mereenie to acquire a 25% non-operated interest in the OL4 and OL5 development licenses, which encompass the Mereenie oil and gas field, located in Australia’s Northern Territory.

The cash consideration for the acquisition is $27.6mn, with an effective date set for April 2023. Additionally, there are deferred and contingent payments of up to $5.8mn over the next 24 months, subject to specific conditions being met. The headline cash consideration will be financed through a new five-year debt facility provided by Macquarie Bank. This debt facility is secured against the acquired asset.

As part of the deal, Horizon Oil is acquiring 6.4mm 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.

The Mereenie field is the largest onshore gas field in the Northern Territory. Central Petroleum operates the Mereenie field, holding a 25% stake, while Cue Energy has a 7.5% participating interest. Macquarie Mereenie holds a 50% participating interest, and New Zealand Oil & Gas has a 17.5% participating interest.

Notably, the Mereenie field recently entered into a gas supply agreement with Australian miner Arafura Rare Earths, signaling further developments in its commercial activities.

Moreover, alongside Horizon Oil, New Zealand Oil & Gas has also acquired a 25% stake in the project from Macquarie Mereenie, which is strategically exiting the project.