Horizon Petroleum Ltd. (TSXV: HPL) (FRA: HPM) (Tradegate: HPM) ("Horizon") is pleased to provide a corporate update on its progress on executing its programs in the Bielsko-Biala and Cieszyn concessions.
The Company has previously reported on its progress in its operations at the Lachowice gas development in the Bielsko-Biala concession where we have commenced operations on the initial development of the field. The field has assigned 2P net reserves of 34 BCF and 164 BCF of Net 2C Contingent resources with net asset values of NPV10 of US$84 million and US$431 million respectively, and 118 bcf of risked best estimate prospective resources (466 bcf unrisked) in undrilled area of the field. (Press release dated January 14,2025).
APEX Global Engineering Inc. ("APEX") prepared the Reserves and Resource Report in accordance with NI 51-101 with an effective date of August 31, 2024 (issue date of December 4, 2024). APEX assigned the Probable Reserves and Contingent and Prospective Resources to the Lachowice field. The reserves and resources assigned are subject to significant risks. Please refer to the Risks section at the end of this press release.
European and Polish Gas Markets
The development of our assets and the planned start of production will help meet the Polish Governments policies to increase domestic gas production. The energy demand environment in Europe and Poland is driven by the goal to reduce dependence on coal and to replace imported gas supplies from Russia for power generation. The EU has recently disclosed policies targeting the cessation of all gas imports from Russia by 2027. Much of the Russian gas is being replaced with LNG imported largely from the USA. The macro-gas market environment is expected to keep natural gas prices relatively high. Current natural gas prices in Poland are 163.5PLN/MWhr (US$12.75/mcf) with futures 2026 price of 168.6PLN/MWhr (US$12.80/mcf). Gas prices at the Dutch TTF hub are currently Euro 34.4/MWhr (US$11.50/mcf).
David Winter, CEO of the Company commented: "The initial review of the seismic and well data has confirmed our belief that the Cieszyn concession contains significant gas potential and we look forward to our work programs over the next year to delineate the prospects for our initial drilling targets that are close to wells that have successfully tested gas. The potential is supported by the shallower depths to the target reservoirs of less than 1,000m, and proximity to natural gas infrastructure that will allow us to bring wells into production relatively quickly. Lower cost of drilling, proximity to infrastructure reducing tie-in times in the strong Polish gas pricing environment of around US$12/mcf will drive attractive economic returns to stakeholders".
The Company is pleased to report on its initial review of the Cieszyn concession.
Cieszyn Concession
The Company has been conducting its initial work program of geological studies and seismic reprocessing which has shown the significant potential of the Cieszyn concession. The concession is covered by a wide grid of 2D seismic data of variable quality. The Company has reprocessed some key 2D lines which significantly improves the data quality and imaging of the target reservoir formations. The initial technical review has defined several priority areas of prospectivity for new 3D seismic acquisition programs. These are planned for 2026 and will be key to delineating the playfairways and prospects of the Miocene aged sandstone reservoirs to support future drilling programs.
In addition to the 2D seismic data, Cieszyn has a total of 48 existing wells that have usable data, the majority of which were drilled during the Soviet era. (only 3 wells were drilled since 1991). The wells were typically shallow, targeting the Silesian Flysch of Miocene age and high-quality Miocene aged sandstone reservoirs, many reporting significant gas tests of over 1mmscf/d from well depths of 400m to 1,500m. Finally, there are 2 producing gas fields adjacent to the Cieszyn licence area. They were discovered in the 1940's and 1950's and government records indicate that they have produced close to 10bcf of gas to before they were suspended. The gas tested and produced is high quality, sweet (no H2S and minimal CO2) with methane contents typically higher than 90%.
There are a number of "on trend" gas fields directly to the west in neighboring Czechia which supports our geological models. These seven nearby fields produce gas from sandstone reservoirs of Miocene age. These reservoirs are the same Miocene aged sandstone formations that have been encountered in the Cieszyn Licence area.
Offtake of any produced gas is supported by the extensive pipeline infrastructure within the licence area and the considerable heavy industry in the region provides a ready direct market for any gas the Company can bring on stream.
Horizon plans to drill its first new well by late 2026 or 2027 which is a requirement under its license agreement. However, the company is considering accelerating this plan through the drilling of "twin" wells beside existing wells that previously tested gas but were never put on permanent production. Well costs are expected to be in the range of US$1M-US$2MUS and associated economics are expected to be positive.