I would now like to hand the conference over to Richard Beament, CEO. Please go ahead.
A very good morning, and I'd like to welcome you to Horizon Oil's 2025 half-year results presentation. My name is Richard Beament, the company's CEO, and with me today is Kyle Keen, the company's CFO. This morning, I'll make some introductory comments covering the half-year ended 31 December 2024, before handing over to Kyle to run through the financials in some more detail. I'll then cover the operational performance of our assets and finish by highlighting the upcoming activity for, in fact, what's already been a relatively busy and successful start to the 2025 calendar year. We can then open up for some questions. Now, during the course of the presentation, we'll be making a few forward-looking statements, and whilst we obviously take every care and precaution in making such statements, actual results will and can differ from a variety of factors.
Here's our usual disclaimer statement, and I'd encourage you all to read that in full at your leisure. Before I get into the numbers, please note that all references are to U.S. dollars unless otherwise stated. As can be seen through the numbers on this slide, we've had, yet again, another solid half-year, a period which included a full six months of production from our recently acquired Mereenie asset. Incremental production from Mereenie more than offset the expected production decline from Block 22/12, resulting in an 11% increase in production and sales volumes, with sales volumes sitting just shy of 840,000 barrels of oil equivalent.
Whilst oil prices moderated during the period, leading to reduced revenues and profitability, EBITDA was still a very healthy $29.4 million, with robust cash flows helping to replenish cash reserves and allow us to announce today a consistent interim dividend of AUD 0.015 per share. Importantly, the balance sheet remains strong, with net cash of $22.5 million at 31 December. On to ESG. Whilst we've continued to have great success on the production and cash flow generation fronts in recent years, this slide also highlights the positive results achieved on ESG, and in particular, the safety front. Lost time injuries for Horizon Oil have generally trended down over the last five to six years, in contrast to the sector, which has seen a gradual increase in lost time injuries.
This trend has been achieved in no small part to the continued safety focus of our operators. More broadly, on ESG, we continue to focus on emission reductions, supporting the communities in the areas where we operate, and ensuring modern slavery risks are eliminated to the greatest degree possible in our supply chains. On sustainability, our carbon removal investment in ReVi is making good progress, and we also see our investment in gas as an integral part to supporting the energy transition. Look, turning back to the company's strategy and how we're delivering against it, the half-year results continue to demonstrate the successful results being achieved through the execution of our strategy. We've remained focused on maximizing free cash flow generation, which was sustained through the half-year by our high-margin production assets.
Free cash flow generation was over $15.1 million, with cash operating costs continuing to be averaged below $25 per barrel of oil equivalent. The strong cash flow has allowed us to continue to prioritize distributions to shareholders, with the announced AUD 0.015 per share interim dividend following closely behind another AUD 0.015 per share final dividend for fiscal year 2025 paid back in October. 2025 now marks the fifth consecutive year where Horizon Oil has paid material distributions to shareholders, with cumulative distributions paid or payable to date exceeding $224 million, amounting to AUD 0.14 per share. The interim dividend represents an annualized dividend yield of around 15%, with the quantum determined to balance shareholder returns, future commitments, and maintenance of our liquidity levels.
Prioritizing such returns to shareholders remains a key pillar of our strategy, and the capacity to continue to pay such dividends and maintain consistent and sustainable distribution is core to the business and is quite extraordinary for a company of our size, given that we've done this whilst also repaying debt and investing in production growth and new business opportunities. Our disciplined approach to capital management and the quality of our assets is what makes this possible. On production growth, we continue to prioritize the development of our substantial inventory of contingent resources, with a four-well Block 22/12 infill drilling program completed earlier in the half-year. At Mereenie, we commenced a two-well development drilling program, which was recently completed, and at Maari, we finalized a workover of the MR6A well.
All these programs successfully boosted production rates from the fields, which is what helps us to sustain free cash flow generation into the future. Looking forward, we are continuing to prioritize further Block 22/12 infill drilling and water handling upgrades. We're also looking at further Mereenie infill drilling, taking lessons from the recent drilling program, and of course, progressing Maari Life Extension, for which an extension application was lodged back in September last year. On new business, we completed the Mereenie acquisition last year, which we expect will complement our existing asset base very well. The recent infill drilling success, combined with the signing of new strategic gas sales agreements, bodes very well for Mereenie, starting to make a larger contribution to cash flow generation for the company over future months.
We continue to keep an eye out for exceptional new business opportunities, which can further complement the existing portfolio, with the priority being to seek out those assets that can help us to sustain or enhance our capacity for further distributions. With that, I'd like to pass over to Kyle to run through the financial results for the year in a bit more detail.
Thanks, Richard. As always, all references to dollars are to United States dollars unless otherwise stated. The first slide summarizes the 2025 half-year results with a comparison against the prior half-year period, where this included the 2024 calendar year results, which we'll compare against previous calendar years in later slides. The 2025 half-year was characterized by continued strong free cash flow generation. Production and sales volume in excess of 800,000 barrels of oil equivalent generated revenue of $55.9 million at an average realized oil price of approximately $78 a barrel and an average realized gas price of AUD 6.62 per gigajoule. I'll also highlight that with Maari lifting in early November 2024, the company had approximately 79,000 barrels of crude oil inventory on hand. This was sold post-half-year, generating in excess of $6 million of revenues.
With the maintenance of low cash operating costs below $25 a barrel of oil produced, barrel of oil equivalent, rather, the group generated EBITDA of $29.4 million and cash flow from operating activities of $18.3 million for the half-year. Cash reserves were $47.3 million at 31 December 2024, resulting in a strong net cash position of $22.5 million. The cash flow waterfall chart continues to highlight the group's capacity to replenish cash reserves following shareholder distributions, while still ensuring funding is available for capital investment in our assets. During the half-year, the group generated operational cash flow of $18.3 million, which more than covered the distribution to shareholders of $16.6 million, with the residual cash flow together with the small amounts of cash reserves applied to fund organic and inorganic growth during the period.
The continued strong free cash flow generation ensured that the group completed the half-year with a robust balance sheet with cash reserves in excess of $47 million, providing the confidence to distribute 100% of the half-year free cash flow generated through an unfranked CFI dividend of AUD 0.015 per share, payable on the 24th of April 2025. With our closing cash position, the group has the required liquidity to pay the interim dividend of AUD 0.015 per share, to pay for the recently drilled Mereenie development wells, for further organic and inorganic growth, and maintaining an appropriate working capital balance, which includes some funds set aside for Maari's ultimate decommissioning.
On the next three slides, we can see the full calendar year results compared against the previous four calendar years, noting that results from Mereenie have only been consolidated from the 11th of June 2024, being the date of completion of the acquisition, and accordingly do not represent a full calendar year. On the slide, the left-hand chart shows how calendar year 2024 oil and gas sales approximated the five-year average, despite only including a little over six months of Mereenie production. If this were annualized, production would have been just shy of calendar year 2023, which was a year which also benefited from an additional Maari lifting and elevated production at Block 22/12 from earlier phases of the successful Weizhou 12 at Eastfield development. Production levels at Block 22/12 have now reverted back to the longer-term trend as we consider further infill drilling.
The revenue chart on the right also reflects production performance, but it also clearly tied to the oil price, which is depicted on the line on the chart. The decline in the net realized sales price over the last three years has brought revenues back to the five-year average, with revenues of $101.2 million U.S. dollars for the 2024 calendar year. With reliable production performance and the maintenance of low operational costs, the company generated EBITDA of $56.9 million and a statutory profit after tax of $14.2 million for the 2024 calendar year. The strong profitability and EBITDA generation over the past five years sees the company trading on an EV/EBITDA multiple of less than three as of the 31st of December 2024. Aiding these results is the continued low cost of production, with cash operating costs sustained below $25 a barrel of oil equivalent produced.
The chart on the left highlights the strong free cash flow generation of $39.2 million for the 2024 calendar year, 10% higher than the five-year average, reflecting the lower CapEx spend and despite the decline in sales volumes and softening commodity prices. As in previous years, I've saved the best chart for last with a net cash chart on the right. This highlights cumulative distributions of approximately $135 million U.S. dollars or AUD 200 million paid to our shareholders over the past four calendar years. The company maintains an appropriate level of liquidity, with a net cash position of $22.5 million at 31st of December 2024, despite having acquired a third-producing asset during the period.
It is the debt funding of the Mereenie acquisition that has resulted in the reduction in net cash during the calendar year 2024, with shareholder distributions paid during this period funded from free cash flow generation. I will now pass over to Richard to provide an update on our asset portfolio and an outlook for the company.
Look, thanks, Kyle. Look, I'll get into the producing assets, starting with Block 22/12 in China. Look, this was yet another solid half-year for Block 22/12, with an average gross production rate of over 8,165 barrels of oil per day. Whilst the fields naturally declined during the half-year, largely as expected, there were also some unplanned production disruptions from a typhoon shutdown and workover activity.
Workovers and infill drilling helped to restore and boost production rates during the period, with a further three-well workover program completed in recent days aimed at restoring and further boosting production. Significantly, a substantial water handling capacity upgrade project was sanctioned in calendar year 2024, which is expected to be online from early calendar year 2026. This project remains on track and is expected to help boost oil production rates later in the field life. The joint venture continues to also evaluate and mature further infill drilling targets, with a view to executing a drilling program later this calendar year, of course, subject to the necessary approvals and rig availability. Turning now to New Zealand and Maari, where we've seen continued stable reservoir performance.
Gross field production over the half-year averaged 4,861 barrels of oil per day, and following workovers to a number of wells during the period, including the MR6A well, rose to an average of around 5,350 barrels of oil per day for January. This is the highest average monthly rate achieved at Maari in over 18 months, and February is also looking very encouraging. This consistent, stable reservoir performance, benefiting from continued water injection and without the need for significant CapEx spend, is what makes Maari a very valuable asset and also what helped to drive the Maari joint venture to submit a license extension application during the period. The application was submitted in September, and whilst we understand it customarily takes over 12 months to process, the joint venture is progressing it in earnest together with the associated regulatory consents.
Now on to the most recent addition of our pool of assets, Mereenie. As mentioned, the half-year represented the first full reporting period inclusive of Mereenie, with gross production averaging 24.7 TJ or terajoules per day of gas and 358 barrels of oil per day for the half-year. Revenues generated were $6 million net to Horizon Oil at an average realized gas price of AUD 6.62 per gigajoule. Importantly, realized gas prices are forecast to materially increase as legacy GSAs expire and are replaced with new agreements for calendar year 2025, such as the recently signed six-year GSA with the Northern Territory Government. This new contract ensures that most Mereenie gas is contracted at indexed fixed prices reflective of current market rates until 2030. As recently announced to the market, the Mereenie joint venture commenced a two-well development program in December, which was successfully completed earlier this month.
The program was completed on time and within budget, with the first well, West Mereenie 29, brought onto production in January, boosting production rates by more than 15% to around 30 terajoules per day. The second well is currently being tied in and is also expected to further boost production rates in the coming days. The timing of the two wells has been very favorable as the incremental gas can be sold into the tight Northern Territory domestic market under the recently signed GSAs. The excellent drilling results have also provided the Mereenie Joint Venture with confidence to evaluate and consider further infill or appraisal drilling, which will be a focus for the joint venture over the coming months. Turning to our consolidated production forecast to the end of 2030.
Consistent with earlier presentations, as Mereenie production is forecast to be economic into the 2040s, it acts as the long-term anchor with long life and relatively stable production. Maari sits on top of this with similarly stable production out to the current license expiry at the end of 2027. We have included in light green an indicative Maari life extension forecast for which an extension application has been lodged. If it is granted, Maari, together with Mereenie, provide a strong foundation for production out into the next decade with a production-based forecast of almost 1,800 barrels of oil equivalent per day. We add Block 22/12's forecast production in the dark blue on top, which will continue to drive cash flow generation over the next four years or so.
Importantly, this Block 22/12 forecast has materially lifted last year as a result of the maturing of a planned liquid handling facilities upgrade, which I mentioned earlier, and which is expected to boost production rates from early 2026. On top of the chart, we've included our indicative future activities, which are largely focused around infill drilling and other activities which are being matured, particularly at Block 22/12. These are all indicative only and remain subject to joint venture, regulatory approvals, and of course, rig availability. Nevertheless, the key takeaways should be that the three assets provide the potential to sustain Horizon Oil production at around 4,000-5,000 barrels of oil equivalent per day for the next four years, with a production base from Mereenie and most likely Maari likely to extend out beyond the end of the decade.
This provides a runway for continued strong free cash flow generation and potential dividend payments for the longer term. Turning now to our operational activity planned for the next 12 months. Please note the timetable again is indicative, and most of the activities remain subject to further technical and economic evaluation, joint venture, and regulatory approvals. As mentioned, we have a water handling capacity upgrade project underway at Block 22/12, which is expected to help increase production rates in future years. Further infill well opportunities also continue to be matured, with plans firming for a calendar year 2025 drilling program. At Maari, we're firmly focused on life extension with regulator engagement underway to progress this. Finally, at Mereenie, we recently completed a two-well infill drilling program, which has successfully boosted production rates at the field.
This has provided additional data and confidence to the joint venture to continue to evaluate and identify further infill and appraisal well targets. We have a reasonably busy calendar of activity firmly focused on extracting more value from our assets. With that, Kyle and I would be pleased to answer any questions that you might have.
Thanks very much, Carl and Richard. We might just give it 30 seconds just to wait for some questions to filter through and give the presenters some time to just go through those. Okay, the first question we have here is, what is the company's current hedge position looking like?
Thanks, thanks, Beth. The company's got 130,000 barrels of oil hedged out to the end of May. That's currently at a weighted average cost of around $76.50 per barrel. Noting that of the 130,000 barrels, about 80,000 barrels is hedged for February, just covering the recent Maari lifting, just providing protection against that sort of concentration risk where we produce that lifting over a roughly three-month period and then are subject to the oil price volatility in the month of lifting.
Great, thanks for that one, Carl. The next question we have is, have we had any feedback from the New Zealand government regarding the Maari life extension application?
Yeah, look, I'll take that one. Thanks, Beth. Look, we obviously launched that application back in September. It was well received by the regulatory body, the MBIE. We have had correspondence, as a venture that is, from them really asking some clarifying questions, and there has been engagement as well with the minister, and he's well aware of it. We've had generally positive feedback, and we have no reason to expect that won't be forthcoming, but obviously there is a process to work through there, and we expect it'll take 12 months or so from here before we have a response.
Great, thanks for that, Rich. We might just give it another 10 or so seconds just to see if any last-minute questions come through. I think that concludes the questions. Thank you very much, Carl and Richard, for your time.