#Canada #Horizon Petroleum #Calgary #Bielsko-Biala #Lachowice

Operational Update from Horizon Petroleum

Horizon Petroleum Ltd., trading as HPL on the TSX Venture Exchange, has announced a significant operational update concerning its gas production efforts in the Bielsko-Biala concession in southern Poland. This initiative, focused on the development of the Lachowice gas project, signifies a crucial step for the company as it gears up for its maiden production.

CEO's Remarks

David Winter, the Chief Executive Officer of Horizon, expressed satisfaction with the progress made towards starting production from the Lachowice 7 well (L7). He emphasized the efforts of the operational team in Poland, acknowledging their hard work in aligning the initial development program with established timelines. Moreover, he recognized the positive rapport with local stakeholders, including contractors, authorities, and the community, which bodes well for project advancement. Winter stated, "We appreciate the support we've received and look forward to collaborating with all stakeholders as we move forward."

Key Developments

A successful workover at the L7 well is pivotal for Horizon, as it is expected to generate cash flow through gas and electrical power sales. The exploration of the naturally fractured Devonian limestone and dolomite reservoirs is underway, and the company has marked several notable milestones in its operational roadmap:

1. Environmental Impact Assessment (EIA) Permit Approval: The Ministry of Climate and the Environment has approved the EIA permit required for the workover, allowing Horizon to proceed with its plans.

2. Material Procurement: Utilizing funds from a recent successful debenture financing, the company has begun ordering long lead items necessary for the workover. These include essential wellhead and completion equipment, expected for delivery in August and September.

3. Utility Coordination: The electrical contractor confirmed that the local utility will relocate a power line crossing the L7 site by the end of June, facilitating construction efforts.

4. Construction Planning: Final designs for the wellsite and access road are complete, and tenders for construction will be awarded within the next few weeks, with work expected to start in July following the relocation of the power line.

5. Rig Selection: Horizon is collaborating with a local service provider to select the rig for the upcoming workover, scheduled to commence in September, followed by a long-term production testing phase starting in October.

Early Production Framework

The company is actively working on finalizing an early production framework for the L7 well, set to follow the workover and testing phases. Horizon has engaged a local electrical and mechanical engineering company to explore gas monetization avenues from the initial development at L7 and the broader Lachowice gas field.

Gas to Power Initiatives

Horizon has identified two access points to local electricity transmission grids, one carrying 2MW capacity located within 300 meters of the L7 wellsite and another 4MW capacity about 1 kilometer away. The company has applied for the 2MW capacity, which will mark the first connection point for its gas-to-power strategy, while efforts to secure the 4MW capacity continue.

Future Developments

The design for a gas processing facility essential for separating liquid condensate from the L7 gas stream has been finalized, and sourcing for the required equipment is underway. The EIA for the production facility is also in progress, aiming for submission by mid-June.

Full Field Development

Preparation for a comprehensive 100 km² 3D seismic survey over the Lachowice gas field has commenced. Initial evaluations have revealed a preferable high-pressure gas network tie-in point positioned 14 km northeast of L7, facilitating lower pipeline costs and expedited approvals.

Workover Operations Planning

The L7 workover is targeted for September and October, contingent on timely acquisition of equipment and services. The planned operations include:

• - Upgrade the workover wellhead.
• - Drill through existing plugs in the wellbore.
• - Conduct pressure tests to assess casing integrity.
• - Recover a packer at the previously tested gas-rich zone.
• - Reperforate and conduct acid stimulation to enhance production.

Conclusion

Horizon aims to commence gas and electricity sales, ensuring initial cash flow by the first half of 2026. With a robust management team experienced in international oil and gas operations, the company eagerly anticipates the upcoming developments within the Lachowice project, poised to contribute significantly to its growth in the European gas sector.