Well, good morning, ladies and gentlemen. My name is Mike Harding, and I'm the Chair of Horizon Oil Limited. Before beginning the meeting, we acknowledge the traditional owners of the country on which we meet today, the Gadigal people of the Eora nation. We pay our respects to the elders, past, present, and emerging. I would like to welcome you and officially open our annual general meeting for 2023. I would also like to extend a welcome to those members who are joining by the webcast. Based on the number of voting members in attendance, I declare a quorum for this meeting. Before I commence today's proceedings, I'd like to draw your attention to the safety sign. Should you hear an alarm, instructions will be broadcast by the building warnings regarding what action to take. If you're required to evacuate, please do not use the lifts.
The evacuation point is located in the forecourt of the Barangaroo Tower 3 , as indicated on the map on the slide hopefully. I would now like to introduce my fellow directors. On my far left is Greg Bittar, Bruce Clement, and your Chief Executive Officer, Richard Beament. On my right is Nigel Burgess, Sandra Birkensleigh, and also joining us, our Company Secretary, Vasilios Margiankakos. I note that Marc Upcroft, representing our auditors, PwC, is available today to answer questions on the auditor's report later in the meeting. Before beginning the formal business of the meeting, I would like to ask Vas, our company secretary, to outline today's procedures and protocols.
Thank you, Mike. All resolutions will be decided by way of a poll at the end of the meeting. The meeting will consider the items of business outlined in the notice of meeting sent to all shareholders on 20th of October 2023. There will be opportunities for shareholders to ask questions and will be confined to the formal business of the meeting. Only those persons holding a yellow or blue card are eligible to ask questions. Daniel Moses of Computershare has been appointed as the Returning Officer. Following confirmation by Computershare, final proxy and voting results will be released to the ASX and the company's website later today. I'll now hand back to the chair.
Okay, thanks, Vas. As there may be holders who can't stay for all the meeting, I now declare voting open on all items. Any undirected proxies in my favor as Chair will be voted in favor of the relevant resolution. The meeting will consider the items of business outlined in the notice of the meeting sent to all shareholders on the 20th of October. I would like to start the meeting with my formal address. This will be followed by Richard's presentation. There'll be an opportunity to ask questions on the presentation, and then we'll proceed to the formal part of the meeting. Ladies and gentlemen, 2023 was again another excellent year for Horizon. We achieved a very strong financial result which allowed us to continue to provide a strong return to shareholders.
The final dividend for 2023 of AUD 0.02 per share, together with the interim dividend, combined to AUD 0.035 per share for distribution for the year. It was approximately AUD 56 million. Combined with previous distributions over the past three years, this is a total return to shareholders of approximately AUD 150 million. The financial health of Horizon has never been stronger. We are debt-free for the first time since 2011, and we're setting aside funds for the future decommissioning of Maari. Our assets in China and New Zealand are high quality, and our aim is to continue to maximize production and cash flow through workovers, infill drilling, and other production-enhancing initiatives. As a result of these initiatives, we've recorded record production, revenue, and profitability for the financial year, underpinned by the strong performance of the group's Block 22/12 and assets in China.
Revenue increased by 41% to $52.1 million, driven by a 44% increase in production, which delivered net sales volume of approximately 1.8 billion barrels. Our cash operating costs continued to be kept below $20 a barrel, ensuring continued strong free cash flow, along with the strong oil price that delivered a net result for 2023. The financial result was achieved whilst maintaining a strong safety and environmental record with a combined focus on ESG matters. All our employees, consultants, and the board are involved with the various components that comprise sustainability, ensuring that our approach is fit for purpose and right for the balance between what the community expectations are and what shareholders expect to ensure a smooth global energy transition. Today, two of my fellow directors, Nigel Burgess and Greg Bittar, are seeking re-election.
Both have proved valuable contributions to the company, and the board fully endorses their re-election today. Looking to the future, we'll continue to work to maximize production and value from our producing assets and continue to actively pursue infill drilling wells and other producing enhancing initiatives in our producing assets, which provide excellent value. We will continue to review our cash position regularly to consider further shareholder distributions while always keeping an eye out for suitable growth options. Our CEO, Richard Beament, will say more about Horizon's performance shortly. He'll update you on the company's strategy. On behalf of the board, I would like to congratulate Richard and the team for their achievements in 2023. Finally, thank you to our shareholders for your valuable support during the year. I will now hand over to Richard to present the CEO's report.
Thanks, Mike. I'd like to welcome you all here to the AGM. As Mike mentioned, I'd like to take a few minutes just to take you through an update on the company, the strategy highlights for the year, and most importantly, the operational activity for each of our assets. I'll start by just putting up the mandatory disclaimer, disclosure statement, which I'd encourage you to read. Please note that all references are the U.S. dollars in the presentation, unless otherwise mentioned. As Mike mentioned, the last 12 months has been a very strong year for Horizon and its investors, and we achieved a total shareholder return of around about 40% for the year, and importantly, with that greater than 20% dividend yield. As Mike alluded to, we've now sustained a distribution yield of over 20% for three consecutive years, with over AUD 150 million returned to shareholders.
Importantly, this has been achieved while still investing in production growth, which has led to that record production, record revenue, and earnings achieved in the last financial year. Horizon's a company which is generating strong cash flows from its assets, continuing to develop its portfolio, and importantly, returning surplus cash to shareholders. Now, just a reminder on the strategy. It's pretty simple. We aim to maximize free cash flow from our assets. We are focused on shareholder returns and continuing to pay those significant distributions, and we'll continue to invest in production growth focused in and around our existing assets, whilst always keeping an eye out for exceptional new business opportunities. Importantly, we're delivering on that strategy with strong cash flow generation through the last financial year, delivering EBITDA of over $103 million.
Our ability to generate that strong cash flow is underpinned by that very low cash operating cost, which is under AUD 20 a barrel. As mentioned, the strong cash flow has allowed us to continue to prioritize distributions with both an interim and final dividend of three and a half cents per share Australian, which combined to a total of about AUD 56 million. Capacity to generate such substantial returns, which is due to that robust cash flow underpinned by the low production costs in the assets, but it's also the strategic investments we've made. In FY 2023, or over the last 18 months, we invested about $30 million, really focused on a satellite field development in Block 22/12, the 12-8 East field.
The development costs were recouped within about 12 months, and it saw production growth in the asset hit record levels of over 20,000 barrels a day gross, almost doubling production from earlier in 2022. It drove a material reserves upgrade and really drove the growth in the company over the last 12 to 18 months. Our pipeline of opportunities for further infill drilling is considerable, and our focus is on continuing to unlock that potential as we go out into the future, a topic which I'll cover a bit more later. Maari is also a very valuable asset and has incremental high-value opportunities, but probably the most accretive project is through life extension and extending out the field for a couple of years, which is a core focus of the venture.
Whilst not our primary focus, we continue to look for exceptional new business opportunities which might complement the existing portfolio with a view to enhancing shareholder returns. Mike's already touched on a number of the recent financial highlights, so I won't go through them all. Just a couple of ones which I'd point out, which haven't been mentioned. The combined daily production rate in FY 2023 was an average of over 5,000 barrels of oil per day, an increase of some 44% and a record for the company. We had approximately 55% 2P reserves replacement, and we continued those substantial distributions, which I mentioned. On ESG, despite the elevated activity levels, we had a very strong safety record, significantly better than industry benchmarks.
Specifically on climate change, having previously declared our ambition to be net zero by 2050, we made a modest investment of seed capital in a carbon removal credit developer called Novocarbo Limited, and we've recently taken receipt of a pilot pyrolysis plant in order to produce the first IHR from the project and move towards carbon removal credit registration. Just a word on the share price. This is a snapshot of the share price on the right-hand side of the slide as you look at it. You've got Horizon's share price in the orange, the oil price in the green, and the ASX energy index in the blue. Importantly, you can see the linkage with oil price.
Ladies and gentlemen, we have temporarily lost connection with the speaker line. Please continue to hold and the conference will resume shortly.
Hi, I'm on the backup line. Can you now hear us now?
Please go ahead.
As I was saying, we've got the share price chart there, and the real takeaway is that positive divergence away from both the oil price and indeed the energy index that you see from the middle of 2022. That was really driven by that successful commissioning of the WZ 12-8 East development with the reserves upgrade, and obviously the continued distribution stream. We've also annotated onto the slide where we've paid dividends in the period with the Ds. You can see there was some reasonable volatility in the share price when we made those distributions, and that's not unexpected given the substantial nature of the returns we made. It's that positive divergence away from the oil price, which is really the significant value that we've been able to add over and above what's been a period of continued strong oil prices.
We expect oil prices to continue to remain fairly elevated given that significant underinvestment that we've seen in new developments across the globe. Moving on to an update on the assets themselves, and I'll start with Block 22/12, really the jewel in the crown for Horizon. This has been a standout year for the asset with the recent addition of the 12-8 East field development, which came on stream in April last year. FY 2023 was a period of significant activity in the block, commencing with a five-well workover program, which was followed by a number of wells drilled in the legacy fields, and then four wells drilled at 12-8 East. The result of this activity was a dramatic boost to production to over 20,000 barrels a day gross in December last year, which represented an almost doubling of production rates from earlier in the year.
The additional production took the share of Block 22/12 cash flow to around about 80% of the company's cash flow. That was really aided by the very low operating costs, which were less than AUD 12 a barrel. Whilst we do expect production rates to naturally decline, our objective is to continue to develop the material pipeline of infill well and water handling upgrade activities in the block in order to sustain production rates at around the long-term average of that eight to 10,000 barrels a day we've achieved over the last decade. I was delighted to be able to travel to China earlier in the year and witness firsthand the success we've had at 12-8 East. We managed to get offshore.
Most importantly, my key takeaway was the joint venture is very well aligned in looking to further extract value from this asset and continue to pursue those infill drilling initiatives I mentioned. Probably most importantly, the relationship with CNOOC and the other joint venture partners is incredibly strong. Block 22/12 has a large portfolio of opportunities, which can add reserves and add value. I've depicted them largely on this slide. All the little dots on that slide represents live opportunities, which we're continuing to mature as a venture. The immediate focus is on looking at an infill drilling program in the next calendar year, targeting somewhere between two and five wells, most likely at the 612 platform and the 12-8 East platform. Hopefully we'll look towards a subsequent phase of drilling, particularly around the 12-8 East platform over the coming years.
On to probably my favorite slide. We've got the history of the asset here, a history of production, and our view of its future. You can see there, just to sort of help you understand it, in the dark green on the right-hand side, you've got our view of the production future, largely underpinned by our 2P reserves. The light green is the production history over the last decade. The blue is the indicative future activities, which are representative of all of those infill well opportunities and water handling upgrades, which we're looking to exploit. There's also there a dotted orange line, which represents essentially the original forecast production from this field at project sanction. You can see the tremendous success we've had in infill drilling over the last decade in order to sustain production rates. That's our objective, to keep that continuing.
You can also see the dramatic boost to production last year with that spike in the green, up to 20,000 barrels a day when 12-8 East came onto production. In terms of the indicative future activities, I would stress that they are indicative, but certainly they are our focus. In order to unlock that potential, we expect to spend around about $10 million-$15 million per annum over the next three to five years in order to unlock that value. Now on to our other asset, Maari. Maari continues to be an important asset for the company and generates about 20% of our cash flow. We had some reasonably good success with workover operations throughout the year, and that led to production being reinstated back to above 5,000 barrels a day, which is where it remains today.
We recently have been focused on continuing workover activities, and we finished a workover of the MR2A water injection well, and we're currently working over the MR-6A well, which is targeted at reinstating production from the Maari Mangahewa reservoir, but also targeting some oil behind pipe in the Moki Sandstone. Hopefully, that well comes online over the next couple of months, and we see a further boost to production. Look, with sustained production efforts at Maari over the next 12 months, we expect production will remain robust, and that's given us the confidence to really push ahead with looking to a life extension on the asset. We were encouraged by a recent certification of the FPSO, which takes the vessel out another five years, out beyond the permit expiry date.
That, combined with the sustained production we're seeing from the field, has given us that strong level of confidence right across the venture in order to pursue the life extension. I would add that with a change of government there in New Zealand, that's probably only a positive in terms of aiding with life extension efforts. We'll just move on to the next slide. Again, we've got the production forecast or our view of the future for Maari and a bit of history. What you can see from this slide is quite a bit different to the China slide, in that production is quite flat with a very modest decline. We don't need that substantial investment in infill drilling in order to sustain production rates.
The field is very well supported by water injection, and really we see most of the value is just in small incremental workover activity in order to sustain production rates. We've got in there some light blue indicative future activities, but most of that requires quite expensive drilling and a substantial extension to the permit to be viable. It's not something we're particularly focused on. Really the value that we are focused on is a short life extension, which is largely depicted by the dark blue there at the right-hand side, extending the field out three to five years. You can see on there it would add roughly one million barrels and add substantial value at fairly minimal cost. Just on to the plan for the next 12 months and the key operational activities. I've touched on a number of this already.
Again, I would just highlight that these are indicative, subject to joint venture approvals and the like. At Block 22/12, we've got between 2 and 5 infill well opportunities which are being progressed, and we expect that they will be further firmed up over the coming months. Upgrades to water handling capacity at Block 22/12 remain a constant priority, and we're working well with the operator to pursue that. At 12-8E, as part of the infill drilling program, but part of it we're looking at is some sidetracks to a couple of the existing wells in order to aid with a more comprehensive drilling program, which is being planned in future years.
At Maari, as I mentioned, we've got that one immediate workover priority with the MR-6A well, which is currently underway, and the focus on life extension, which we hope to submit that application sometime in the new year. Let me conclude by summarizing our strategy and the way we expect to deliver on it during 2024. Firstly, to maximize free cash flow generation. We commenced FY 2024 very well with strong production, aided by the continued high oil price. Whilst we foreshadowed that production rates would naturally decline, particularly at Block 22/12, this decline in production coincides with a return to more normal levels of capital expenditure, such that subject oil prices and, of course, production, we see free cash flow generation being substantially maintained. Secondly, to make further distributions to shareholders.
We remain determined to deliver value to shareholders, having returned over AUD 150 million over the past three years. Further distributions remain a priority, always delicately balancing returns with growth and the need to adequately provision and set money aside for Maari decommissioning. Thirdly, to continue investing in production growth. Our priority is to invest in production growth within our existing portfolio in order to unlock shareholder value, with further infill drilling and workovers at Maari as a priority. These organic growth opportunities continue to be our primary focus for growth as they offer significant incremental returns with very rapid payback periods. Nevertheless, we keep an eye out for opportunistic inorganic growth opportunities, which could further enhance value, but they do need to have strong investment metrics and ideally the potential to enhance our making further distributions.
Before I hand back to Mike, I'd just like to make special mention of the amazing team with whom it's a privilege to work with every day. To that end, I'd just like to thank the management team, Gavin, Kyle, Andy who's not here, and Vas, for all their tremendous efforts, along with our talented team of staff and consultants, whom without the results we've been able to achieve wouldn't have been possible. Thank you.
What happens if we get a phone call, Richard?
Sure do.
Someone's back. I'll press that red button. No, don't do that. Don't do that. You're in charge of the button. Thanks, Richard. I'd now like to give everybody an opportunity for questions on the presentation, and there'll be an opportunity to ask questions on the formal business later. I'll endeavor to get everybody a good go at asking questions. I open it up to the floor now. Brent, you look as though you're off.
Well, hang on. We'll just.
Oh. Does Brent need that? Does he?
That's from Mike. This production curve in China, it does come actually quite strangely with the new extension of the company in 2028.
I really hope that it's the potential to kick out the license with the current date there. I know what the contract says on negotiation. I think from a practical perspective, if China wants to keep investing in this new production, it might be in their interest to extend the first license date.
Cheers, Richard. You were up there.
Yeah, I can probably cover that. This all goes to understand, we've got two relevant dates. We've got 2030, April 2030, which is the end of the petroleum contract, and August 2028, which is the end of the production period for the legacy fields that came on in 2013. The question really goes to what's our potential to be able to extend the license, first of all, for that initial production period out beyond 2028, ideally at least to the end of the PSC, if not beyond. Look, it's challenging. It's probably fair to say it's challenging in China to get those sorts of extensions. For a scenario where you invest significant amounts of capital later in the permit life, and it's recognized by CNOOC that in order to get an economic return, that you would need an extension.
I think, probably a couple of things to point out is most of the incremental infill well opportunities are very much in WZ 12-8 East. There are still a smattering across the other legacy fields, and we are continuing to focus on probably those legacy fields first to make sure that's not an issue. The infill wells on WZ 12-8 East, what you can see through that production chart is WZ 12-8 East wells decline very rapidly. They come on very strong, and they pay back within, depending on oil price, three, six, nine months, so very rapidly. You can drill economically all the way up towards the permit expiry, and for WZ 12-8 East, it doesn't have that 2028 date to worry about because it only came on in 2022. We can drill WZ 12-8 East well all the way up through to 2030.
We've tried to show that with this little bit of a slither here playing out. Whether we drill 12-8 East wells here or even later probably doesn't make a huge impact. We do recognize there are potentially some waterflood opportunities.
Some other things which might need more significant amounts of capital. If they do mature, then certainly that's the sort of discussion we expect to have with CNOOC about trying to push that boundary out. I think to get the PSC beyond 2030 is very challenging. Really, to be able to push the production periods out all the way to the end of the PSC, very much goes to a function of what level of capital spend we're willing to commit to and the viability of those projects.
Yeah, thanks.
I think, though, Brent, from listening to Richard, and remembering board meetings, that CNOOC tend to like us. I know it's China, and they can not like us very quickly. They're always posing us with options to look at with Roc Oil because they like the way we behave. We're not in the bad books, just the opposite.
Yeah. No, I accept that. I think that's been a feature of the relationship that goes back to 2001.
with CNOOC Roc Oil and Horizon Oil.
The second question, if I may, relates to Maari and again, looking at that production curve, it does, as you highlighted, point right out beyond the current pertinent date. I know that the permit, the license agreement actually makes extension relatively simple. That brings me to OMV. I think it's fair to say there's investment in the New Zealand assets, too. I wonder whether a potential people call it organic growth option here would be to express that interest in via that investment. Obviously, provided it didn't mean increasing our exposure to the abandonment cost. It would have to be obviously structured like that. I wondered about the status of the OMV sale. It might even be over by now. My second question was that Mike mentioned in his address, the making a provision for the abandonment.
There's been a lot of talk about that under the preceding government. Not long, we've got a new government. The abandonment, the requirements were pretty vague. I don't think the legislation has. I just wonder, you mentioned putting the funds aside, how you would intend to do that? There are my two questions.
Firstly around the RB process. Obviously, their process, I can't comment too much. Fair to say, most people probably were, it's not just Maari that's trying to Divestor trying to do this, their whole New Zealand portfolio, and intertwine that with their Malaysian portfolio. They've been pretty clear from everything I understand to ensure that they divest it all as one whole portfolio. Yes, obviously, we're interested to know who the partners they're dealing with and have had some engagement to try to see if there's some opportunity for us. I think we'll have to see how that plays out. A lot of companies just wanted Malaysia, just wanted pieces of the puzzle, and were rejected from the process because they firmly want to sell it in one whole interest.
That's got a long way to run from what I understand, there's pre-emption rights and the bureau try to sell at the same time, all the regulatory bodies need to be comfortable. I wouldn't think anything's going to happen there rapidly, but obviously once we have greater clarity, we'll look to see what opportunities it may provide. In terms of decommissioning, government set down the Crown Minerals Act modifications a couple of years ago. That, as you say, is a little bit vague as to what the security requirements would be. We have had quite a lot of engagement, both ourselves and the operator with the regulator, the NDIE. They provided us with draft guidelines as to how they see financial security working. We're seeking industry consultation on that and how they see financial capability being determined.
Safe to say that it is their expectation that all companies will be putting up financial security in some form, and that historical parent company guarantees provided by even bigger companies aren't going to suffice for the majority of the security being required. We will need letters of credit, bank guarantees, sinking funds, with a preference probably for the latter. We equally understand, we've got this obligation, we can't get away from it. We expect that, obviously it's a little bit determined by life extension, and obviously on in which we can get clarity and comfort that is real. We expect the regulators will ask this sort of security letter on us over the next 12 months. Hence, we've started setting funds aside since probably the last few years, really just a build-up of working capital on the balance sheet.
Those funds are going on certificates of deposits and getting 5% returns. We expect at some point we will have to put that either into a sinking fund within the venture or to be funding our share of a letter of credit or bank guarantees. To vary, don't really want to put numbers around it. We've obviously got a AUD 50 million plus obligation to fund. We expect to fund it over the next 3-5 years, obviously weighing up and seeing what the regulator requires, what we agree with the venture, and what we're able to achieve in terms of confidence around life extension. It's all a bit of a delicate balancing act, but our priority is to set money aside judiciously whilst also paying a return.
What we don't want to do is give all the money back now and then hope that we're going to have the money in those latter years and find ourselves in the situation where we're in a volatile oil price cycle, where the oil price crashes, and we can't fund that obligation. We're trying to manage all of those sort of risks and do it in the most judicious way we see sensible.
Okay. Thank you. Richard, do you know yet whether you would be setting aside, by way of say, sinking fund, the whole AUD 50 million exposure or the after-tax that is with the 42% tax call back? Obviously, we'd prefer to set aside AUD 30 million than AUD 50 million. Do you have any view?
I probably have to be a little bit careful because we're seeing the sort of hallmarks of where they're going with the guidelines. That's all before it's been made too public. It comes down to, first of all, they assess your financial capability, not as a company, as a joint venture. Once they get a level of surety around the financial capability, that then they're looking for that to determine both the quantification and the form of security. They will only consider, and this is sort of the draft, they will only consider the level of essentially the tax offset funds, but if they deem you to be highly financially capable.
It's a fairly high bar to reach, and it's obviously complicated, I'll be honest, by R&D and their divestment process and where that goes and who might come in, and to see what sort of level of financial capability that company may or may not have. We're all sort of in it together.
Brent, I understand your question. I don't think we should be too smart on this, because you know my background. When we look at the capital cost estimates that have been done, depends on where you're cutting things off and what you're getting rid of, and that's not been agreed yet. I think we shouldn't be cutting the number and the cost estimates, as you well know. Plus or minus 30%-50%, they'll never go minus, they're going to go up. I think we've just got to be a bit careful at the moment and not try and do the financials like you want. We may do it end up like that, but at the moment, from a board's perspective, I want to have some money in my pocket.
On the taxing point, yeah, I think the obvious point for people to understand how it works quite well, but you have to spend the money in order to get the tax credits back. Whilst we can be comfortable we put a little less financial security away today, we're still going to have to have 100% of the money to fund the obligation ultimately, and then claim the credits back. Yeah, needless to say, we're well across it. We're trying to balance all the different moving parts to make sure the company's position is well protected and that we meet our obligations along the way, whilst still trying to make sure that we add and provide for our shareholders as much value as we can. Thanks.
Thanks. Anybody else?
I have an answer.
Oh, yes, sorry. I didn't see you.
Peter Green, Shareholder. Regarding the investment in biochar and obviously, biochar, but what are you going to use it for?
The biochar investment, I think it was modest. It was $1.2 million or $3 million USD. The biochar has really two purposes. First of all, you get a carbon removal credit, and that's probably the most valuable aspect of the biochar. It's like a condensed carbon, condensed charcoal. I call it that. It's a fairly permanent way of storing. You can sell the carbon removal credits. They trade quite premium, over $100 a ton. If it sells carbon removal credits, it is very valuable. The actual biochar itself has a multitude of different uses, and I think the client is still getting to grips with the potential uses. One is it's good for soil enhancements. You put it into the soil, helps with water retention, helps with the nitrogen out of the soil, helps with accessibility, fertilization of the soil.
The potential uses, what we're looking at, not that looking at, is around whether you could use it as a replacement for coking coal for blast furnaces. Obviously, green steel is a big topic for all those steel manufacturers and sort of seen as nirvana. Whether it can even just be a replacement for part of the coking coal in a blast furnace, a little bit of control in that potential use as well. It's got a variety of uses, but as I said, the primary investment proposition around those is around the carbon removal credits. That's it.
It's a big, evolved commodity. I can't see exactly how you're trading and producing biochar. I guess it's transported off in reliance in bags, which are packaged. Once you go to steel, okay, I just wonder whether it's going to be viable for a kit. We don't know how much you can sell a bag of biochar, or in whatever market, whichever market for biochar, is it going to be bags, or will it be loose? Okay. I think it's probably aimed at credits, isn't it?
It's aimed at the credit, but let me say that our economic assessment of it when we made the investment was purely done on carbon removal credits only. Any residual value we got from selling the actual biochar itself, that's a bonus. You got to understand, under that model, essentially, we're getting the biomass for free. Any other sort of biochar project traditionally has to own the land, grow the crops or whatever the biomass is that they're using for it. Here, we're essentially getting the feedstock for nothing. Really the value to generate is how much and then get that biochar into carbon removal credits, sell the credits, and if we can get anything for biochar, then that's a bonus. The investment thesis is all around the carbon removal credit side. These are still in the early-Stand for premium.
They're taken on by the likes of Google and Microsoft, with the boards of old players carving off bits across the ACCU and things like that, which should struggle in a much narrower price. That's really what the approach is. There's substantial resources, 10 million tons of biomass and things in the woods. We did it as a pilot, and we recognize the seed capital. That we didn't put too much into it. We used this. By far, although the best approach is of that proof of concept kind that with the team and the same guys.
Thank you, Richard. Anybody else? No? Okay. Let's move on to the business of the meeting. Given that the notice of the meeting has been sent to all registered members, I now move the notice of the meeting as taken as read. The minutes of the previous annual general meeting excuse me, have been approved and signed in accordance with the Corporations Act, and a copy is available for inspection in Horizon's offices. We will now move to the business of the meeting, which includes the resolutions that have been put to the meeting. Each resolution, before being discussed, the proxies will be put on the screen. As mentioned earlier, all resolutions will be decided by a poll, and a live vote is now open on all items of business. The first item is the financial report.
The first item is to consider and receive the financial report, the director's report, and the independent auditor's report for the year end associated to June 2003. These documents have been made available to shareholders. There's no requirement for shareholders to approve these reports. Accordingly, item number 1 is for discussion, and then there will be no vote on this item. Questions on the financial report and all that's in it that we haven't addressed? No. Item number 2, the adoption of the remuneration report. The meeting now needs to consider item 2, adoption of the remuneration report for the year end of the 3rd of June 2003. The board unanimously recommends the shareholders to vote in favor of this item, and proxies. Oh, they're up there. Yep.
Yeah.
As shown on the screen. Questions on the remuneration report? Okay, thank you. Item three is the re-election of Greg Bittar as a non-executive director. Mr. Bittar, who is retiring by rotation in accordance with the constitution of the company. Being eligible, Mr. Bittar is standing for re-election. The proxies are dealt by. Be shown on the screen. There's now an opportunity to discuss this resolution. No? Item 3B is a re-election of Non-Executive Director Nigel Burgess. Nigel's retiring by rotation in accordance with the constitution of the company. Being eligible, he is standing for re-election. The proxies are up there, I think. Again, there's now an opportunity to discuss Nigel's re-election. Okay. Item 3B. Sorry, item four. Yeah, item four, sorry, is the approval of deferred rights for Richard. The meeting now needs to consider item four, approval of deferred rights to the Managing Director.
The details of the rights plan are set out in the detailed notice of the meetings, and the proxies are up there. Any comments, questions on that resolution? No? We'll now conduct the polls. I'm going to invite Vas to explain how the poll is going to work.
Thank you, Mike. Daniel Moses of Computershare has been appointed the counting officer for this meeting, and I declare the computer checks independent. If there is any person at this meeting who believes they are entitled to vote but is not yet registered, we can please raise your hand for assistance. Every member present, in person or by representative, attorney, or proxy, that holds a yellow admission card is entitled to one vote for each share held. The resolutions on which you are required to vote by poll are items two, 3A, 3B, and four, as set out in the notice of the meeting. Back to you now, Mike.
That's fine. I'm not going to answer that one. Tick the right box. Okay. As Vas said, the counting will take a little while, and then they'll be put out this afternoon via SMS. Any other questions in general? No? Thanks for coming, Brent.
I'll declare the meeting closed. Thank you.