Horizon Petroleum Ltd. ("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.