www.horizon-petroleum.com
CALGARY,
AB, Feb. 3, 2025 /CNW/ - Horizon Petroleum
Ltd. (the "Company" or "Horizon") (TSXV: HPL) (FRA: HPM)
(Tradegate: HPM) to announce the start of preparatory
work at the Lachowice natural gas
development in Poland and to
confirm its strategy and focus on natural gas development and
production in Poland and
Europe,
Dr. David Winter, CEO of Horizon,
stated, "Our goal is to establish a profitable intermediate-sized
energy company that produces natural gas to meet Europe's rising demand and enhance its energy
security. We are starting preparatory operations to re-enter the
Lachowice 7 well, aiming for production and cash flow by late 2025
or early 2026. The Lachowice gas field development and realising
the natural gas potential of the Bielsko-Biala and Cieszyn
concessions are the cornerstone of Horizon's European natural gas
focused strategy. Lachowice alone has assigned 2P natural gas
reserves of 34 BCF and risked 2C contingent resources of 163 BCF,
estimated to have a Net Present Value (NPV10) of US$ 84.5 million and US $431 million respectively as per our previously
disclosed NI51-101 compliant reserve and resource report."
Operations Commence at Lachowice
The Company has commenced preparatory works at the Lachowice 7
(L7) well location. The re-entry, workover and installation of a
small gas production and sales facility is the initial stage in a
phased development of the Lachowice gas field targeting first gas
production late this year or early 2026.
Land access agreements have been signed with all landowners at
the location. The Company is well positioned to move forward with
its operations which have been positively received by local
residents, and local municipal and regional authorities.
Work is underway in the field to determine the condition of the
existing L7 wellhead and source the required materials to be ready
for the workover this summer once a nearby high-voltage power line
is moved and buried a safe distance from the wellhead.
Assuming a successful re-entry and flow test at the L7 well this
summer, the company will install a small gas treatment
facility. The company is actively determining the optimum
method to monetize the treated gas production. To this end, two
separate engineering companies have been contracted to study the
local markets and infrastructure to accommodate either a gas to
electric facility or compressed natural gas (CNG) or mini-liquified
natural gas sales (LNG) process.
Roger McMechan, COO of Horizon
added: "The positive response from our consultations with the local
residents, communities and municipal authorities demonstrates the
importance of having the right operations team on the ground with
the long-standing local and regional relationships. Our team in
Poland have been instrumental in
the smooth start-up of operations and planning with the local
authorities and service companies to be on track to meet our target
of first production by late 2025/Q1 2026."
European Natural Gas Strategy
The execution of our European gas strategy is governed by the
following priorities:
Minimise subsurface risks by the evaluation, acquisition and
development of previously discovered gas and oil resources in the
proven gas basins located in Poland and elsewhere onshore Europe. The initial focus is developing
the Lachowice gas field, and fully evaluating the potential of the
Bielsko-Biala and Cieszyn concessions in southern Poland.
Investment decisions driven by acquiring assets that provide the
lowest risk potential for near term production and free cashflow
generating high rates of return. Low finding, development and
acquisition costs coupled with low operating costs are paramount to
drive first tier economic returns.
Leverage our team's international experience and expertise to
monetise undeveloped or underexploited gas and oil accumulations.
The Company recognises that many of these accumulations are
contained in reservoirs that are geologically complex.
Horizon will bring its technical and operating expertise and
experience gained in complex field developments around the world to
develop these accumulations commencing with the Lachowice field in
Poland. We plan to employ advanced
3D seismic acquisition/processing and drilling/completion
technologies to drive enhanced production and enhanced reserve
recoveries.
Environmental, social and economic sustainability is a core
strategic priority:
-
- Many European countries prioritize the transition to a lower
carbon economy, yet energy consumption is rising faster than the
supply of hydrocarbons and renewables. The role of natural gas is
increasingly crucial, especially with energy security concerns
stemming from the Ukraine war and
the halt of Russian gas imports. Additionally, government
initiatives to reduce coal use further highlight this need. To meet
growing energy demands, investment in advanced technologies for
domestic energy sources is essential. Horizon aims to lower methane
and GHG emissions by effectively using existing technologies in its
operations.
- We will use local and regional services as a priority. Our
operating philosophy is to employ local expertise and experience
and supplement that when required by international specialist
consultants and contractors. This strategy has been proven to
reduce costs, improve local engagement and support resulting in
better operational and strategic decisions.
Mitigate geopolitical and operational risk by acquiring assets
in a number of jurisdictions and geological basins. We think it is
important to build a portfolio of assets with the reserve and
production potential to build the company's asset value and
cashflows and to generate high rates of return. The acquisition of
the two concessions in Poland
containing the Lachowice gas development provide the cornerstone
for the Company's growth in Poland
and Europe. Longer term we will
actively screen, evaluate and pursue business development
opportunities to add reserves and production potential in
Poland and more widely in
Europe and in the greater
Mediterranean region.
The Company sees significant opportunities in Eastern and
Central Europe and the greater
Mediterranean region to develop previously discovered natural gas
accumulations that remain undeveloped thereby increasing domestic
production and reducing dependence on imports of Russian natural
gas, imports of liquified natural gas (LNG) and the use of coal in
power generation.
The Company will keep shareholders informed of our progress at
the Lachowice natural gas development and the execution of our
European focused natural gas strategy over the next several
months.
About Horizon Petroleum Ltd.
Calgary-based Horizon is
focused on the appraisal, development and production of natural gas
and oil reserves in Europe. The
large Lachowice gas development in Poland is the cornerstone of a Europe focused natural gas strategy to assist
in energy security by increasing domestic production. The
Management and Board of Horizon consist of oil & gas
professionals with significant international experience.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
This press release contains "forward-looking statements" or
"forward-looking information" (collectively referred to herein as
"forward-looking statements") within the meaning of applicable
securities legislation. Such forward-looking statements include,
without limitation, forecasts, estimates, expectations and
objectives for future operations that are subject to a number of
assumptions, risks and uncertainties, many of which are beyond the
control of Horizon. Forward-looking statements are statements that
are not historical facts and are generally, but not always,
identified by the words "expects", "plans", "anticipates",
"believes", "intends", "estimates", "projects", "potential" and
similar expressions, or that events or conditions "will", "would",
"may", "could" or "should" occur or be achieved. This press release
contains forward-looking statements pertaining to, among other
things entering into the Definitive Agreements and completion of
the transaction, and the furtherance of Horizon's European
acquisition and development strategy.
Oil and Gas Advisories and Risks
The reserve and resource estimates contained in this press
release have been prepared in accordance with NI 51-101, is dated
as of August 31, 2024 and prepared by
APEX Global Engineering Inc. The Company held no reserves or
reserves at year end but subsequently was granted the Bielsko-Biala
and Cieszyn Concessions on November 19,
2024.
The reserve and resource estimates of natural gas and natural
gas liquids reserves provided in this news release are estimates
only, and there is no guarantee that the estimated reserves and/or
resources will be recovered. Actual reserves and resources
may eventually prove to be greater than, or less than, the
estimates provided herein. It should not be assumed that the
estimates of future net revenues presented herein represent the
fair market value of the reserves and/or resources. There are
numerous uncertainties inherent in estimating quantities of natural
gas and natural gas liquids reserves and/or resources and the
future cash flows attributed to such reserves and/or
resources.
These risks and uncertainties include but are not limited to:
(i) the fact that there is no certainty that the zones of interest
will exist to the extent estimated or that the zones will be found
to have natural gas with characteristics that meet or exceed the
minimum criteria in terms of net pay thickness and/or porosity, or
that the natural gas will be commercially recoverable to the extent
estimated; (ii) the fact that there is no certainty that any
portion of the probable reserves and contingent and prospective
resources will be commercially viable to produce; (iii) the fact
that the Company must hire an operations team and executive team in
both Calgary and Poland in order to execute on the development
plan, and there are no guarantees that suitably qualified technical
and professional staff and/or consultants will be available; (iv)
the lack of additional financing to fund the Company's development
activities and continued operations; (v) the risks associated with
obtaining approvals to access land to drill wells or install
infrastructure and facilities in a reasonable time frame; the
Polish regulatory regime is relatively stable but is marked with
long approval processes relative to North American jurisdictions;
(vi) the risks in acquiring or constructing adequate natural gas
infrastructure to produce and sell natural gas, and whether
capacity will be available in the existing main pipeline system at
reasonable costs; (vii) the risk that there may not be a drilling
rig available to drill the required wells, and the risk that if a
rig mobilization is required from outside of Poland, that the costs may be prohibitive;
(ix) risks inherent in the international oil and natural gas
industry; * fluctuations in foreign exchange and interest rates;
(xi)the number of competitors in the oil and gas industry with
greater technical, financial and operations resources and staff;
(xii) fluctuations in world prices and markets for oil and natural
gas due to domestic, international, political, social, economic and
environmental factors beyond the Company's control; (xiii)
changes in government regulations affecting oil and natural gas
operations; (xiv) potential liabilities for pollution or hazards
against which the Company cannot adequately insure or which the
Company may elect not to insure; (xv) contingencies affecting the
classification as reserves versus resources which relate to the
following issues as detailed in the COGE Handbook: ownership
considerations, drilling requirements, testing requirements,
regulatory considerations, infrastructure and market
considerations, timing of production and development, and economic
requirements; (xvi) the fact that there is no certainty that any
portion of the prospective resources will be discovered and if
discovered, there is no certainty that it will be commercially
viable to produce any portion of the resources; and (xvii) other
factors beyond the Company's control.
Any reference in this press release to PIIP, contingent
resources and prospective resources are not, and should not be
confused with oil and natural gas reserves.
Definitions
Total Petroleum Initially in Place ("PIIP") refers to
the total quantity of petroleum that is estimated to exist
originally in naturally occurring accumulations. It includes the
petroleum that exists in known accumulations prior to production
and the estimated quantities yet to be discovered in the various
leads and prospects identified by seismic and inferred by geology.
A portion of the PIIP will be recoverable as determined by ultimate
recovery factors and the estimated recoverable portion is further
classified as Reserves, Contingent Resources or Prospective
Resources.
Discovered Petroleum Initially in Place ("Discovered
PIIP" or "DPIIP") is the total quantity of Petroleum
that is estimated as of the effective date of the Report to be
contained in known accumulations prior to production.
Multiple development projects may be applied to each known
accumulation which may be separated vertically into different
formations or by area in different pools; each project will recover
a portion of the PIIP according to its unique reservoir
characteristics. The projects will be subdivided into Commercial
and Sub-Commercial at the effective date with the estimated
recoverable petroleum quantities being classified as Reserves
and Contingent Resources.
Reserves are estimated remaining
quantities of oil and natural gas and related substances
anticipated to be commercially recoverable from known
accumulations, from a given date forward, based on:
(a) analysis of drilling,
geological, geophysical and engineering data;
(b) the use of established
technology; and
(c) specified economic
conditions (see the discussion of "Economic Assumptions"
below).
Reserves are classified according to the degree of certainty
associated with the estimates.
(d) Proved
Reserves are those reserves that can be estimated with a
high degree of certainty to be recoverable. It is likely that the
actual remaining quantities recovered will exceed the estimated
proved reserves.
(e) Probable
Reserves are those additional reserves that are less certain
to be recovered than proved reserves. It is equally likely that the
actual remaining quantities recovered will be greater or less than
the sum of the estimated proved plus probable reserves.
(f) Possible Reserves are
those additional reserves that are less certain to be recovered
than probable reserves. It is unlikely that the actual remaining
quantities recovered will exceed the sum of the estimated proved +
probable + possible reserves
Company Gross Reserves are the Company's
working interest (operating or non-operating) share before
deducting royalties and without including any royalty interests of
the Company.
Resources are defined in the Canadian Oil
and Gas Evaluation Handbook (COGEH) Volume 1, section 5 as
follows:
Contingent Resources are those quantities
of petroleum estimated, as of a given date, to be potentially
recoverable from known accumulations, but the applied projects are
not yet considered mature enough for commercial development due to
one or more contingencies. Contingent Resources may include, for
example, projects for which there are currently no viable markets,
or where commercial recovery is dependent on technology under
development, or where evaluation of the accumulation is
insufficient to clearly assess commerciality.
Contingencies may include factors such as economic, legal,
environmental, political, and regulatory matters, or a lack of
markets. It is also appropriate to classify as contingent
resources, the estimated discovered recoverable quantities
associated with a project in the early evaluation stage. Contingent
Resources are further classified in accordance with the level of
certainty associated with the estimates and may be sub classified
based on project maturity and/or characterized by their economic
status.
Not all technically feasible development plans will be
commercial. The commercial viability of a development project is
dependent on the forecast of fiscal conditions over the life of the
project. For Contingent Resources, the risk component relating to
the likelihood that an accumulation will be commercially developed
is referred to as the "chance of development." For contingent
resources, the chance of commerciality is equal to the chance of
development.
Development Pending are
contingencies that are being actively pursued; expect resolution in
a reasonable time period; are directly influenced by the developer
with both, internal approvals and commitment and development timing
and; have a high chance of development (>80%).
Development on Hold are
contingencies with major non-technical contingencies identified;
have a reasonable chance of development (>50%); have
contingencies that are beyond the control of the developer
including but not limited to: external approvals, economic factors,
market access, political factors and social license.
Development
Unclarified are contingencies that have not been
clearly defined; the project is currently under active evaluation;
significant further appraisal may be required; progress is expected
in a reasonable time period; chance of development is difficult to
assess and could be a big range (20%-80%).
Development Not Viable are
contingencies that have been identified; the project was evaluated
and considered not viable or significant further appraisal may be
required; progress is not expected in a reasonable time period and;
has a low chance of development (<<50%).
Contingent Resources –Development Pending and
–Development On Hold are considered economic, Contingent Resources
–Development Unclarified have economics that are undetermined, and
Contingent Resources –Development Not Viable are considered
sub-economic.
Prospective Resources are those quantities
of petroleum estimated, as of a given date, to be potentially
recoverable from undiscovered accumulations by application of
future development projects. Prospective resources have both an
associated chance of discovery and a chance of development.
Prospective Resources are further subdivided in accordance with the
level of certainty associated with recoverable estimates assuming
their discovery and development and may be sub classified based on
project maturity.
Not all exploration projects will result in discoveries. The
chance that an exploration project will result in the discovery of
petroleum is referred to as the "chance of discovery." Thus, for an
undiscovered accumulation, the chance of commerciality is the
product of two risk components — the chance of discovery and the
chance of development.
Estimates of resources always involve uncertainty, and the
degree of uncertainty can vary widely between
accumulations/projects and over the life of a project.
Consequently, estimates of resources should generally be quoted as
a range according to the level of confidence associated with the
estimates. An understanding of statistical concepts and terminology
is essential to understanding the confidence associated with
resources definitions and categories. These concepts, which apply
to all categories of resources, are outlined below. The range of
uncertainty of estimated recoverable volumes may be represented by
either deterministic scenarios or by a probability distribution.
Resources should be provided as low, best, and high estimates as
follows:
- Low Estimate and/or 1C in the case of Contingent
Resources: This is considered to be a conservative
estimate of the quantity that will actually be recovered. It is
likely that the actual remaining quantities recovered will exceed
the low estimate. If probabilistic methods are used, there should
be at least a 90 percent probability (P90) that the quantities
actually recovered will equal or exceed the low estimate.
- Best Estimate and/or 2C in the case of Contingent
Resources: This is considered to be the best estimate of
the quantity that will actually be recovered. It is equally likely
that the actual remaining quantities recovered will be greater or
less than the best estimate. If probabilistic methods are used,
there should be at least a 50 percent probability (P50) that the
quantities actually recovered will equal or exceed the best
estimate.
- High Estimate and/or 3C in the case of Contingent
Resources: This is considered to be an optimistic
estimate of the quantity that will actually be recovered. It is
unlikely that the actual remaining quantities recovered will exceed
the high estimate. If probabilistic methods are used, there should
be at least a 10 percent probability (P10) that the quantities
actually recovered will equal or exceed the high estimate.
This approach to describing uncertainty may be applied to
reserves, contingent resources, and prospective resources. There
may be significant risk that sub commercial and undiscovered
accumulations will not achieve commercial production, however, it
is useful to consider and identify the range of potentially
recoverable quantities independently of such risk.
The main contingencies identified in the Lachowice Reserves
Report are the successful recompletion of existing abandoned wells,
the expected decline rates and the approval and completion of new
development and new re-entries. Table 6 below outlines the
positive and negative factors which may be relevant to the Resource
Report assumptions and estimates.
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SOURCE Horizon Petroleum Ltd.
