Thank you for joining Horizon Oil's investor webcast. I'm Richard Beament, the group CEO, and I wanted to take a moment to run you through an update on the company after what has been a fairly transformational period, as the Horizon today is very different to what it was just a year or so ago. FY 2026 was game changing. We delivered record production and sales, established Thailand as a material low-cost contributor to group cash flow, completed the Cue Energy Resources acquisition, and entered FY 2027 with a broader five-country platform and a larger opportunity set. Before I begin, please note the usual important disclaimers, which I would encourage you to read. Look, at a glance, Horizon is now a diversified Asia-Pacific oil and gas producer with producing assets across Thailand, Indonesia, Australia, New Zealand and China.
FY 2026 net production was approximately 2.15 MMboe, with FY 2026 sales of almost 2 MMboe, up 33% and 22% respectively on FY 2025 before any material contribution from Cue Energy Resources. The portfolio now combines established offshore oil production, domestic gas production with a mix of oil linked and fixed price gas contracts, and a set of infrastructure-led growth opportunities. On a Horizon net basis at 30 June 2026, 2P reserves were 13.6 MMboe, 2C contingent resources were 19.8 MMboe, and 2U prospective resources were 14.3 MMboe. The investment proposition is deliberately straightforward: reliable production, strong cash generation, disciplined reinvestment and shareholder returns. Now turning to the map showing our diversified portfolio. The map is important because Horizon is no longer a narrow one or two asset story.
We now have exposure to producing assets across five countries and, following Cue Energy Resources, a footprint that includes nine producing oil and gas fields. Each part of the portfolio has a role. Thailand provides low cost, oil linked domestic gas cash flow. China and Maari provide established offshore oil exposure. Australia gives us strategically relevant contracted fixed price domestic gas through Mereenie, Palm Valley and Dingo. Indonesia adds near-term oil exploration and development activity at Mahato and also managed gas exposure at Sampang. The value is not simply diversification for its own sake. It is diversification across cash flow, commodity exposure, maturity and opportunity type. The company highlights show the scale reset.
Current Horizon net production is approximately 7,300 boepd, including Horizon's share of Cue Energy Resources production, and the group's 2P reserves increased 51% from 9 MMboe- 13.6 MMboe over the year to 30 June 2026. What matters is the quality of that growth. The record FY 2026 production and sales outcome was delivered before any material Cue Energy Resources operating contribution. Cue Energy Resources therefore adds a further platform for growth rather than being the driver of FY 2026 record result. At the same time, Horizon has continued to prioritize capital management with more than AUD 270 million distributed to shareholders over the past six years, as noted on the slide. This slide focuses on the company's key financial metrics over the past five years.
Now, I won't preempt the results for FY 2026, but this slide reinforces the strength of the underlying business and disciplined capital allocation over an extended period. As noted in our recent quarterly report and on the slide, at 30 June 2026, Horizon retained AUD 37.4 million of cash after approximately AUD 8 million of debt repayments, the AUD 17 million interim dividend paid in April, and Cue related cash acquisition costs. Net debt at 30 June 2026 was a relatively modest AUD 11.3 million, and the point is that we've been able to return capital, reduce debt, fund growth, and still preserve balance sheet flexibility. Our job is not just to grow barrels, it's to convert the portfolio into cash and allocate that cash well. This slide shows the near-term value runway across the enlarged portfolio. The common theme is infrastructure-led, approval-gated growth.
In Thailand, we have compression projects, Pad D deliverability work and infill drilling. At Mahato, we have infill drilling, the OLP3 Phase 3 development planning and a high impact exploration well. At Palm Valley, we have appraisal drilling. At Maari, there is infill maturation. In China, we have workovers in progress, optimization activities, and 12-8 East expansion studies. What should be clear is that we have an enormous organic growth opportunity set with a period of intense activity over the coming six to 12 months. These activities will be important in helping us to grow and sustain production and cash flow generation out into the future. The strategic advantage that we now have is that we have multiple options to improve reliability, extend asset life, and support cash flow without relying on any single large project. Now, building on the operational activity, we've provided an indicative production outlook.
Now, I should emphasize that this should be read as indicative only. It's intended to illustrate the shape of the opportunity set, base production, plus potential organic growth. It illustrates that the group has organic growth opportunities within our current portfolio that have the potential to support production and cash flow out for the next decade and beyond. Now, just turning to a bit more detail on the assets. Thailand is the clearest example of the FY 2026 transformation. Sinphuhorm & Nam Phong have quickly become a material cash flow engine for Horizon, supported by low operating costs and gas pricing linked to oil markets. In Q4, the assets averaged approximately 1,900 boepd net to Horizon, with quarterly revenue increasing almost 18% to AUD 7.3 million. The strategic role of Thailand is threefold.
First, it provides domestic gas into a market that values reliable supply, even more so after the recent turmoil in the Middle East. These gas fields are the only source of domestic gas for the Nam Phong Power Plant, which supplies around 20% of Northeast Thailand electricity. Second, the oil-linked pricing structure gives Horizon commodity leverage through gas. Third, existing infrastructure creates a practical path for deliverability enhancement, with a strategic imperative growing for extending the life of these fields. Accordingly, the Nam Phong & Sinphuhorm booster compressors, the Pad D tie-in, and the infill drilling program slated for early next year are all critical activities aimed at helping to meet these strategic energy needs. Indonesia comes to Horizon through Cue and gives us two different asset roles. Mahato is the near-term oil growth asset, while Sampang is a maturer gas asset where the focus is disciplined production optimization.
At Mahato, the PB oil field is producing from a proven Central Sumatra Basin setting, with two approved infill development wells targeting the Bekasap Reservoir. The PB-41 well commenced drilling in July, with a second well expected to follow on as part of an approximate two-month drilling campaign. The operator is also progressing the Phase 3 development plan and the high-impact GA-1 exploration well. At Sampang, the asset continues to supply gas to the Grati Power Station, but production is declining as the Oyong and Wortel fields mature. The near-term focus is compressor commissioning at the Grati processing facility, expected during this quarter, and disciplined management through to current contract expiry. The Amadeus Basin assets strengthen Horizon's domestic gas exposure. Mereenie, Palm Valley and Dingo are established gas assets tied into regional infrastructure, serving both the Northern Territory and East Coast markets.
Mereenie has provided critical domestic gas to the territory for over 40 years and continues to supply around 30%-40% of the market. The ongoing field development review is assessing future well opportunities and optimization initiatives. Palm Valley adds a near-term catalyst. The PV-14 well has commenced drilling as the first of two appraisal wells designed to evaluate and develop additional gas resources and support longer-term Northern Territory market supply. Dingo adds contracted gas exposure into the Alice Springs power market. Together, these assets provide strategic domestic gas balance. Maari remains an established offshore oil cash flow asset, and the Cue transaction increases Horizon's effective exposure to an asset we know very well. The asset remains regionally important, regularly supplying Australia's East Coast oil refineries.
The near-term focus is on the MR3 well workover, which will be completed shortly, continued reservoir management, and subsurface studies to mature potential future infill drilling candidates. China remains a reliable offshore oil contributor. In Q4, Block 22/12 gross oil production averaged just over 6,700 bbl a day or around 1,800 boepd net to Horizon, and it's increased recently following some workover activity. The asset's role is clear. Stable oil cash flow underpinned by low cost operations with ongoing optimization. Water handling upgrades earlier in the year have continued to support production rates and a current workover program at the WZ6-12 field is underway. The next area of focus is continuing the WZ12-8E Phase 2 feasibility studies. To close, the investment case for Horizon is stronger and clearer than it was a year ago.
We have a diversified Asia Pacific five-country production platform, record FY 2026 production and sales volumes, a larger reserves and resources base, and a disciplined capital allocation model that continues to prioritize shareholder returns. The transformation has three pillars. First, Thailand has become a material cash flow engine with near-term deliverability projects and an oil-linked gas pricing structure. Second, the Cue acquisition has increased scale, broadened reserves and production, and added multiple value-accretive opportunities across Australia, Indonesia and New Zealand. Third, the base portfolio, Maari, Beibu, Mereenie, and the Thailand assets, continues to generate cash while we progress high return infrastructure-led opportunities through approval gates. Our focus is unchanged. Operate safely, maximize cash flow through strong production and keeping costs under control, allocate capital carefully, maintain balance sheet flexibility, and create sustainable long-term value for shareholders with distributions remaining a priority. We are not chasing scale for its own sake.
We are building a stronger regional energy business around assets that can generate cash and opportunities that can compete for capital. The enlarged Horizon gives us more options, but the discipline remains the same. Look, thank you for your time and continued interest in Horizon. I look forward to updating shareholders as the enlarged portfolio is integrated and as we move through this intense period of development activity. I look forward to also speaking to you all again in the coming weeks when we release our full year results for FY 2026. Thanks very much.