I would now like to hand the conference over to Mr. Richard Beament. Please go ahead, sir.
Thanks very much, and a very good morning to everyone. Now, whilst today's presentation focuses on the FY25 financial results, a couple of key events which occurred post-year-end somewhat overshadow what was another very good year for Horizon . I'm obviously referring to the completion of the Thailand acquisition, which results in a step change in the scale of our business, with an almost 50% increase in daily production rates and almost a 40% increase in 2P reserves. In some way, just as significant was the announcement yesterday that we have received a 10-year extension to the Maari permit all the way until December 2037, providing a runway for continued production, maturation or production enhancement initiatives, and deferral of decommissioning obligations.
This morning, I'll start with an overview of FY25 before handing over to Kyle for the financials, then cover operational performance, upcoming activity, and we'll open up for some questions. Here's the customary compliance statement, which I'd encourage you all to read. I'd also just point out that during the presentation, we may make some forward-looking statements, so actual results may clearly differ. I'd also note that all dollar references are US dollars unless otherwise stated. As can be seen through the numbers on this slide, we've had another solid financial year, which benefited from a full year of production from the Mereenie asset , which was acquired late in the prior financial year.
Incremental production from Mereenie more than offset the expected production decline from Block 22/12, with Maari production very stable, resulting in a 13% increase in production and a 24% increase in sales volumes to over 1.6 million bbl of oil equivalent. Whilst oil prices moderated during the year, leading to reduced revenues and profitability, EBITDA was still a very healthy $54.8 million, with robust cash flows helping to replenish cash reserves and allow us to announce today a consistent final dividend of $0.015 per share, bringing the aggregate dividend for the financial year to a total of $0.03 per share. Importantly, the balance sheet remains strong with a cash balance of just under $40 million and net cash of $13.7 million at 30 June.
I also note that the cash and cash flow numbers exclude a substantial Maari June lifting, for which $9.2 million was received just after year-end in early July. Adjusting for this, cash would have been just shy of $50 million, with net cash of almost $23 million. On ESG, Horizon continued to achieve strong results. Lost time injuries declined over the past five years, while sector trends increased. The company remains focused on emissions reduction, community support, and modern slavery mitigation. We also see our gas investments in Mereenie and now Thailand as an integral part of supporting the energy transition. Accordingly, we undertook a refresh of our ESG materiality assessment during the year to help us to refocus and shape our future ESG strategy with gas in our portfolio. Turning to strategy, our FY2025 results highlight continued delivery against our objectives.
We generated $35.9 million in cash flow from operating activities, with a further $9.2 million Maari revenue received in early July, which I'd already mentioned, which if added, lifts this to just over $45 million. Cash operating costs remained low at under $25 per bbl of oil equivalent, supporting strong margins. This cash flow enabled ongoing shareholder returns with a final dividend of $0.015 per share following the interim dividend of the same amount. This marks the fifth consecutive year of paying at least $0.03 per share in annual distributions, equating to more than a quarter of a billion Australian dollars, or $0.155 per share returned to shareholders to date. Maintaining consistent and sustainable returns while reducing debt and investing in growth reflects the strength of our assets and disciplined capital management.
On growth, we continued to develop our substantial contingent resources with a total of seven infill wells drilled across Block 22/12 and Mereenie, alongside Maari well workovers that help sustain production. A major water handling upgrade at Block 22/12 is underway, with further Mereenie drilling being considered. At Maari, we just secured that all-important 10-year permit extension. In new business, the recently announced Thailand acquisition delivers a step change, lifting daily production by around 50% to over 6,500 bbl of oil equivalent per day and 2P reserves by around 40%. It adds two high-quality gas-weighted assets, further diversifying our portfolio and extending production well beyond the end of the decade. Now, I've already covered a number of the highlights mentioned in this slide, but a couple of specific ones I want to highlight are the following.
We achieved a total shareholder return of approximately 25% for FY25, adding around $70 million in shareholder value through a combination of share price appreciation and dividends. On Mereenie, in addition to the incremental production from the two infill wells, the strategic gas sales agreement executed with the Northern Territory government ensures we have most of Mereenie production contracted over the next few years and ensures we remain a critical supplier of domestic gas. This also applies to our new gas fields in Thailand, where gas from both fields is almost entirely used in domestic power generation, meeting around 20% of Northeast Thailand power demand. In both countries, our gas plays a critical role in supporting communities, keeping the lights on, and in supporting local energy transition objectives. This slide shows Horizon 's 2P reserves and 2C contingent resources as of 30 June.
It's also worth highlighting that this excludes the additional reserves associated with the recent Thailand acquisition, as this transaction only completed subsequent to the end of the year on the 1st of August. Excluding the Thai assets, as of 30 June, net 2P reserves decreased a modest 9% to 9 million bbl of oil equivalent, reflecting 1.6 million bbl of oil equivalent of production materially offset by a 0.8 million bbl of oil equivalent addition associated with Maari life extension. This reserves growth at Maari was supported by stable production, infrastructure extension studies, and the anticipated license renewal, which has now been granted. This enabled the transfer of contingent resources into 2P reserves, initially covering forecast production for the 2027- 2030 period. Net 2C contingent resources declined 8% to 12.3 million bbl of oil equivalent, largely associated with transfers into reserves at Maari and smaller China projects.
As noted, post-year-end, the acquisition of Sinphuhorm and Nam Phong in Thailand is expected to add around 3.9 million bbl of oil equivalent of 2P reserves at the 1 January effective date, or 3.5 million bbl if we were to adjust it to 30 June. That takes 2P reserves to around about 12.5 million bbl of oil equivalent, which, as you can see, is a pretty material uplift. Now I'll pass over to Kyle to run through the financial results in a bit more detail.
Thanks, Richard. As always, all references to dollars are to United States dollars unless otherwise stated. Turning to the financial performance for the 2025 financial year, this slide provides a summary of our results with a comparison against the prior period. It's important to highlight two key points upfront. Firstly, the 2025 financial year includes a full 12 months of financial contribution from Mereenie.
Secondly, while the Thailand acquisition became effective from the 1st of January 2025, the economic benefits were set off against the purchase price at completion on the 1st of August 2025. Therefore, the financial performance from the Thailand assets is not reflected in the 2025 financial year results. Operationally, the year was marked by continued strong free cash flow generation. We achieved production and sales of over 1.6 million bbl of oil equivalent, which delivered revenues of $105.3 million. This was a realized average oil and gas price of approximately $65 per bbl of oil equivalent, which compares against $85 in 2024's financial year. On the cost side, we maintained our low cash operating cost base of under $25 per bbl of oil equivalent, which underpinned a strong financial outcome. For the year, we generated EBITDA of $54.8 million and cash flow from operating activities of $35.9 million.
At 30 June 2025, the group held cash reserves of $39.8 million, translating to a net cash position of $13.7 million, reinforcing our solid financial position heading into the 2026 financial year. This cash flow waterfall chart continues to highlight the group's strong capacity to replenish cash reserves following shareholder distributions, while still maintaining adequate funding for capital investment in our assets. Over the course of the financial year, the group generated operating cash flows of nearly $36 million. This cash flow supported the payments of $31.9 million in dividends to shareholders, demonstrating our continued commitment to shareholder returns.
Investment in oil and gas and other assets for the period totaled $15 million, which primarily related to two successful infill wells at Mereenie, which now contribute to approximately 25% of Mereenie's total production, and five infill wells and a workover program at Block 22/12, which supported solid production performance during the year. Thanks to our strong free cash flow generation, we ended the financial year with a healthy balance sheet, comprising cash reserves of nearly $40 million. It is worth noting that an additional $9.2 million related to Maari lifting in June was received shortly after the year-end. This financial strength has supported the board's decision to declare a final financial year 2025 and franked CFR dividend of $0.015 per ordinary share, and this will be paid on the 24th of October 2025. Lastly, I'd like to note the completion of the Thailand acquisition on 1st of August 2025.
Given that the transaction was predominantly debt funded and supported by strong cash flows from the asset's effective date of 1 January 2025, the impact on the group's cash reserves was minimal, approximately $400,000. This reflects our disciplined approach to capital management and transaction structuring. On the next three slides, we'll step through a comparison of the full year financial year results against the previous four financial years. Starting with the slide, the chart on the left illustrates how oil and gas sales volumes for 2025 exceeded the five-year average of 1.43 million bbl of oil equivalent. What's particularly evident here is the impact of the Mereenie acquisition, which is shown in yellow. This helped offset the expected natural production decline from Block 22/12. This reinforces the strategic value of the acquisition in supporting overall production levels.
Looking to the chart on the right, this shows total revenue, which, while linked to production volumes, is also clearly influenced by the realized oil and gas price, shown by the line overlaid on the chart. Again, we see the significance of Mereenie's contribution here. Despite a lower net realized oil price and the decline in Block 22/12, revenue for the financial year remained broadly consistent with the prior year. Now, it is worth noting that in the 2023 financial year, it benefited from the initially significant production increase from the 12 Eddies development, combined with a higher oil price environment, which contributed to the elevated revenue seen in that year.
Building on the strong production performance, supported by the full year contribution from Mereenie and the continued focus on maintaining low operating costs, the company delivered an EBITDA of $54.8 million and a statutory profit after tax of $12.2 million for the financial year. Profitability was impacted by a 24% decline in the net realized oil and gas price when compared to the prior year. While not directly visible in the chart, it is important to acknowledge the significant profitability contribution from the 12 Eddies development over the previous three financial years. The 12 Eddies development was characterized by strong initial production rates and oil price linked development and operational costs, which not only allowed for rapid repayments of capital, but also delivered robust profitability through those 2022 - 2024 financial years.
Now, turning to the last slide, the left-hand chart highlights free cash flow generation of $20 million for the 2025 financial year. It's important to note that this figure was impacted by timing differences, with an additional $9.2 million in Maari revenue received shortly after year-end. The chart on the right shows the group's net cash position and, more notably, highlights the cumulative distributions made to shareholders, which now totals approximately $150 million U.S. dollars and $225 million Australian dollars over the past four years. These consistent and meaningful returns to shareholders are something as a management team and company we are incredibly proud of. It reflects not only our resilient operating performance, but also a clear value-focused strategy, strong and collaborative partnerships, and a disciplined capital management and investment.
While not visible in the chart, but worth highlighting is the impact of the fully debt-funded Mereenie acquisition, which was completed at the end of the prior financial year. This transaction was the primary reason for the decline in net cash in the 2024 financial year, noting that we have already seen the benefit of the asset in this year and expect to continue to realize the benefit over the next plus or minus 20 years. The group closed the 2025 financial year with a net cash of $13.7 million and the further $9.2 million in Maari revenues, which were received shortly after year-end, reinforcing our ongoing financial strength. With that, I'd like to hand over back to Richard, who will provide an update on our asset portfolio and share the company's outlook moving forward.
Thanks, Kyle. Let me start with Block 22/12 in China.
This was a solid year for Block 22/12, with an average gross production rate of over 7,300 bbl of oil per day. Whilst the fields naturally declined, largely as expected, there were also some unplanned production disruptions from wells requiring workovers, as well as two typhoon shutdowns. Workover activity and infill drilling helped to restore production rates during the year, with a total of five wells drilled throughout. Significantly, a substantial water handling capacity upgrade project was sanctioned last year, 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. The joint venture continues to also evaluate and mature further production enhancement opportunities. Turning now to New Zealand and Maari, where we've seen continued stable reservoir performance.
Gross field production over the year averaged 4,846 bbl of oil per day, and following workovers to a number of wells in recent months, has risen to over an average of 5,600 bbl of oil per day during August to date, the highest monthly production rate in over five years. This consistent, stable reservoir performance, benefiting from continued water injection and without the need for significant CapEx spend, is what makes Maari valuable and drove the Maari joint venture to submit a license extension application. The application was submitted in September last year, and we were delighted to have our permit extension granted earlier this week for a further 10 years to December 2037. This provides a substantial runway to continue production, mature production enhancement opportunities, and plan for Maari's ultimate decommissioning.
The permit extension closely follows recent changes made by the New Zealand government to oil and gas legislation aimed at reinvigorating sector investment, as energy security in New Zealand has come under significant increased focus. The award of the permit extension is a further signal that New Zealand remains firmly open for business. Turning now to Mereenie. As mentioned, the financial year represented the first full reporting period inclusive of Mereenie, with gross production averaging around 26 TJ per day of gas and 340 bbl of oil per day for the year. Revenues generated over the year were just under $15 million net to Horizon at an average realized price of $8.40 a gigajoule. Importantly, realized gas prices materially increased from January this year as legacy gas sales agreements expired and were replaced with new ones, such as the 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 for the next few years. Successful infill drilling at Mereenie during the second half of the year lifted production rates, and now those wells supply around 25% of field production. The excellent drilling results, where the wells continue to produce at a combined rate of around 6.5 TJ per day, have also provided the Mereenie Joint Venture with confidence to evaluate and consider further infill drilling, which will be the focus for the joint venture over the coming months. Looking back on the Mereenie acquisition, we view that it has been very successful for the group. The acquisition has boosted group production and cash flow, helping to offset production decline at Block 22/12.
The results from the infill wells, combined with the higher realized gas prices, certainly justified our investment and have made it an important long-term cash flow generator for the group. Now on to the most recent additions to our pool of assets, the Sinphuhorm and Nam Phong fields in Thailand. This acquisition, announced in March following execution of a share sale and purchase agreement with Exxon , completed just after the year-end on the 1st of August. As mentioned in our recent press release, the acquisition results in the acquisition of an effective 7.5% interest in Sinphuhorm and 60% interest in the Nam Phong producing gas fields onshore Thailand, adding around 2,100 bbl of oil equivalent per day to Horizon 's production base.
The new acquisition provided a compelling opportunity, which required minimal capital in order to gain access to a low-risk suite of gas production assets, offering attractive returns and rapid payback, likely within about two years and with upside. The initial purchase price of approximately $30 million was largely funded from an amendment to our existing Macquarie Bank debt facility, with the remaining contingent payments of up to $7.5 million to be funded from cash flow over the next six years should various conditions be satisfied. The acquisition will diversify and grow Horizon 's production base by adding a fourth and fifth asset, three of which will now be gas assets, a key fuel for the energy transition.
Both Sinphuhorm and Nam Phong have several opportunities which provide some running room and upside potential, with the immediate focus on a potential booster compressor installation at Nam Phong and the tying of an infill well at Sinphuhorm, the PH-14 well, which was drilled back in 2024. We will clearly provide updates on the performance of these assets as we move forward. We are certainly very happy with the current production performance over recent months. Turning to our consolidated production forecast to the end of 2030, this looks quite different to previous years, with that material uplift associated with the additional Thailand production, adding almost 50% to the current daily production rates, lifting it to around 6,500 bbl of oil equivalent per day.
Maari also provides a material contribution with long life and relatively stable production. It is again worth reflecting that just two years ago, this forecast was largely curtailed in 2028, following the scheduled expiry of the Maari permit in 2027 and most of the Block 22/12 production in 2028. In under two years, we have rebuilt the portfolio with the Maari and Thailand acquisitions, complemented very well by the recent Maari permit extension. Subject to us being able to unlock the remaining potential in our assets, we have the potential now to average production rates over the next three years at over 6,000 bbl of oil equivalent per day and can reach the end of the decade producing around 3,000 bbl- 4,000 bbl of oil equivalent per day, close to our current daily production rates from our legacy assets, Maari and Block 22/12.
This provides a clear runway for continued strong free cash flow generation and potential dividend payments for the longer term. Turning now to our operational activity plan for the next 12 months or so, I must just note that the timetable is indicative and most of the activities remain subject to further technical and economic evaluation, joint venture and regulatory approvals. On Block 22/12, we have the water handling capacity upgrade project, which is already underway and expected to help boost production rates in future years. Further infill well opportunities are also being evaluated. At Maari, whilst we've now secured the Maari permit extension, work continues to ensure the integrity of Maari infrastructure over the longer term and evaluation of additional production enhancement activities.
At Mereenie, whilst we recently completed a two-well infill drilling program, which has successfully boosted production rates, this has also provided additional data and confidence to the joint venture to continue to evaluate and identify further infill well targets. Finally, at our Thai assets, as I mentioned, we are evaluating installation of a booster compressor at Nam Phong. At Sinphuhorm, having recently received necessary regulatory and environmental approvals, the operator is progressing works on the tie-in of the PH-14 well. Once on stream, this well will continue to support production from the fields, helping to sustain the production plateau. We have a reasonably busy calendar of activity, firmly focused on extracting more value out of our assets. With that, Kyle and I would be very pleased to answer any questions you might have, and we might just take 30 seconds or so to digest the questions as they come in.
Thank you.
Thank you. If you wish to ask a question, please type in the Ask a Question box in the bottom right-hand corner of your screen.
Okay, so the first question we have here is, congratulations on the Thailand acquisition. I note that the concessions expire in 2031. Is there a prospect to extend beyond that date?
Thanks, I can take that. First of all, thank you very much for your kind words on that. There is potential we see for the concession to be extended. As I noted, or as you can imagine, there's an insatiable demand for energy in the northeast of Thailand, with both fields supporting a power station that provides about 20% of northeast Thailand's electricity demand. Clearly, that's not going to diminish post-2031. There's certainly a desire we understand for the power station to extend its life. Clearly, subject to there being sufficient gas reserves in the ground, we would see there's a very good prospect of being able to extend. Obviously, it's subject to regulatory approvals, the gas being in the ground, and indeed the power station being able to extend its life.
Thanks for that, Richard. The next question we have is, given the recent volatility and uncertainty in oil prices, will you continue to hedge going forward?
Thanks, Vas. Yes, the short answer to that is yes. We've been very diligent and proactive with regards to hedging over the past 12 months. The primary reason for that is really the concentration risk around Maari's liftings. It is something that we are conscious of. I do note the additional debt that the business has taken on in order to fund the third, fourth, and fifth producing assets. Just to note on that regard, we do have 240,000 bbl of oil hedged from August through to March next year, at a weighted average fixed price of around $68. The vast majority of Mereenie's gas is essentially hedged through fixed price GSAs.
Thank you, Kyle. Next question we have is, with regard to the recently announced Maari permit extension of 10 years, how many years beyond 2027 have you booked reserves?
As noted in the reserve slide, we've initially booked reserves through to the end of 2030. That's based on current work on looking at the integrity of the asset and where we see things. Over the next few years, we'll continue to mature work now that we've got the permit extension on looking at how far we can take out the infrastructure. There's another question here related around other opportunities to identify further drilling on Maari. Obviously, without the license extension or permit extension, it was very hard to really further any efforts in that direction. We'll certainly be turning attention to that. It is an expensive place to do drilling. Anything we look at in that space, we wouldn't do lightly unless we had a strong degree of confidence in ours and the operator's capacity to drill wells.
It opens the door for really expanding and growing the opportunities there in New Zealand with another 10 years.
Thanks, Richard. Another question we have here: noting the two acquisitions over the past 18 months, is the business's strategy to continue to bolt on new assets?
Good question. Our strategy hasn't changed at all. We've always had a pillar in our strategy focused on growth or organic growth initially, but always keeping an eye out for further inorganic opportunities. We've obviously executed two in under two years, which might look like we're on a bit of an acquisition spree, but certainly, we're very value-focused, as most of our shareholders would recognize. We certainly don't do acquisitions for acquisition's sake. These two have been quite important in rebuilding the production base, post-2028 as our China field in particular is due to come off. We certainly see them as very timely, and we obviously keep an eye out for more opportunities, but we're not out there to grow for growth's sake.
Thanks, Richard. The final question we've had come through is, do you have a view about production growth over the next five years?
Oh, look, I think we obviously provided that forecast production chart a few slides ago, which probably answers that one best. You know, recognizing the Nam Phong and Sinphuhorm acquisition, you know, that grows daily production by around 50%. You'll certainly see a big jump over the next 12 months and going forward on our production. You can see with the activity slide we also presented, we have quite a lot of activity and opportunities to continue growing production in each of our assets as we go forward.
Thanks, Richard, and thanks, Kyle, for your time today. I think that will now conclude our webcast for today. I will now pass you back to the operator.
Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.