Operations

The Group’s strategy is to build shareholder value through the exploration and development of its existing assets, while seeking potential new opportunities.

In pursuit of these aims, the Group’s management utilises its technical and financial expertise and connections to partner with other, like-minded companies in making applications for new exploration acreage.

 

Business Review

The Netherlands acquisition effectively created the entirety of size and scale for HALO’s operations in 2017 and this was followed by the extremely complimentary UK acquisition in 2018 of Third Energy Offshore Ltd.

The Group’s strategy has continued to focus on lower-risk assets with well-understood geology, near-term commercial potential, access to (or ownership of) infrastructure situated in established hydrocarbon basins and stable fiscal jurisdictions such as the Netherlands and the UK.

The Oil & Gas sector enjoyed a recovery in 2018 from the 2015-2017 downturn and has seen increased interest in drilling and developments. Therefore, the Group has expanded and enhanced its portfolio and will continue to do so. However, in this context, HALO expects to maintain the same cost discipline it has followed to date and pursue only those opportunities which offer sufficient returns within manageable risk.

The Group believes the changes in scale which resulted from the 2017-2018 acquisitions will allow it to continue to pursue larger, or similar, opportunities in the future as well as providing cash flow to pursue lower-risk organic opportunities. HALO continues to screen suitable opportunities as they arise focusing on those which meet the strategic objectives and are deemed to be value-accretive within HALO’s established jurisdictions.

Following the completion of the UK acquisition, HALO has increased its internal resources, but only very modestly with an incremental increase in general expenditure supporting requisite requirements of another Country and material operational activity, with the intention to maintain a cost conscious and highly effective management capacity within the Group. Given the continued “non-operated” nature of the interests, HALO intends to continue to assume the day-to-day management of the expanded portfolio from the office in The Hague, benefiting from the local market’s access to highly skilled industry specialists and service companies.

HALO maintains its interests in the Philippines but, as almost no capital was required in 2018, this aspect of the portfolio remains under review as its relative significance is further diminished by the UK acquisition in 2018.