HZN 4.35% 11.0¢ horizon oil limited

Where to next 5c?

  1. M1
    493 Posts.
    Back in October 2014 I submitted a post (26/10 Post #: 14183829) in response to the declining share price in the context of the Annual Report released on 21/10/2014 (ie. price dropped from 38+ to 28cps - which back then I thought was a significant drop – how wrong was I!!). That the share price is now 11 cps cannot be solely put down to the drop in world oil prices as these prices had bottomed out and started rising from their lows but HZN continues to fall. Could the dramatic decline in world oil price have been predicted? Probably not. And in spite of what has transpired since I wonder how the management of Horizon will come to be regarded by the market, their peers, shareholders and clients. It’s easy with the benefit of hindsight but just look at quality/integrity of some of the statements made in that report… (I’ve coloured the relevant text in blue and added my comments within brackets to save space)
    It’s about time Horizon gave some indication of how it intends to do three things for shareholders 1. Put a stop to the hemorrhaging. 2) restore the price back to 35-38c levels 3) build substantial shareholder wealth as promised.
    I sincerely wish shareholders significant wealth! M1
    Original post from 26/10/2014 (with edits as described above:-

    The reality from management
    “Dear Shareholders,
    The last year has been, most notably, a period of transition for Horizon Oil - a transition from a company with modest, single sourced production, revenue and cash flows from operations, to a company with substantial, sustainable and dual-sourced production, revenue and cash flow streams. This cash flow will provide the foundation for funding the Company’s substantive portfolio of growth assets, particularly in Papua New Guinea - a development pipeline that can reasonably be expected to deliver substantial value for shareholders in the future." (page 2)
    "Based on the production forecast that follows this report, we expect this increased level of production to continue through to the end of calendar year 2017 from the Maari and Beibu Gulf fields alone. The resultant cash flow, together with cash reserves, further payments anticipated from Osaka Gas and drawdown on our debt facilities, as required, will be utilised to develop the substantive condensate and gas reserves in PNG.
    The production forecast demonstrates the potential, company-changing impact of production from these reserves, especially the gas and, as shareholders would expect, developing these is the number one priority of your board and management." (page 6) {company-changing indeed! Company risks being a once well regarded ASX 300? stock to becoming the penny dreadful ASX joke of 2015! – M1}
    "Key to delivering on the above objectives is our staff and management team. They have performed superbly this year, executing a successful capital raising and implementing a merger attempt, while carrying out their normal duties in the professional manner that the board has come to expect." (page 6)
    {are you serious Horizon! “performed superbly” for what a failed merger attempt… and running the company down to 11cps with the bottom not yet established, a major shareholder bailing? – if this is the sort of performance “the board has come to expect” then either replace staff or replace the board – performance for 2014/2015 has been woeful imo as evidenced by the one factor that counts to shareholders and that is shareprice – M1}
    Now the reality from a share holders perspective.
    To any outsider reading this report, Horizon Oil looks to be a super company complete with a team that is said to have “performed superbly” – so superbly in fact that the one aspect shareholders look to when appraising the real performance of a company is the share price. Indeed, the share price of this superb looking company last traded at 28c prices and in fact touched 26c last week.
    Message to the management Yet again the share holder is left reading about Horizon’s intention to deliver value to the shareholder, indeed “substantial value” – so far it's just been words and talk - so please please put some substance to your rhetoric and start delivering on your promises to share holders. {substantial value!!! Significant losses more like it! - M1}
    One can only wait in hope, good luck all, maybe this will be the year. M1
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Mkt cap $149.9M
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