Horizon Petroleum has reached a critical operational milestone by commencing production testing at the Lachowice-7 well in southern Poland. Through its subsidiary, Energia Karpaty Zachodnie, the company has secured a drilling and services contract with Exalo Drilling S.A. to execute a comprehensive workover program. This move follows the successful closing of an oversubscribed $681,000 secured convertible debenture financing, providing the necessary capital to fund these field operations. By completing essential pre-operational requirements, including regulatory approvals from the Polish Mining Authority and infrastructure construction, Horizon is now positioned to validate the commercial potential of its Bielsko-Biała concession. This development is a foundational step toward the company's goal of generating initial cashflow from its significant natural gas resources by early Q3 2027.
Exalo Drilling Contract and Lachowice-7 Workover Program
The technical execution at the Lachowice-7 well is scheduled to begin with rig mobilization on July 27, 2026, with field operations expected to commence around August 1, 2026. Horizon has finalized a contract with Exalo Drilling S.A. to manage the re-entry, recompletion, and stimulation of the well. The primary objective of this program is to confirm the long-term production flow potential of the naturally fractured carbonate reservoir located in the Upper Devonian aged formation.
The specific technical workflow involves re-entering the wellbore to remove existing mechanical and cement suspension plugs, followed by pressure testing to verify mechanical integrity. Once integrity is confirmed, the team will re-perforate the well to prepare it for recompletion. The final phase involves using diverted acid stimulation and production testing to assess sustainable flow performance. If the initial removal of suspension plugs and integrity checks are successful, stimulation and testing are projected to run from late August through early September 2026. This phased approach is designed to de-risk the asset by converting recognized resource potential into proven production capabilities. The company has already secured all necessary permits, including the "Plan Ruchu" approved by the Polish Mining Authority, and has completed the construction of the required access road and wellsite to support these upcoming field activities.
Secured Convertible Debenture Financing and Capital Deployment
To fund these technical operations, Horizon successfully closed an oversubscribed offering of secured convertible debenture units, raising aggregate gross proceeds of $681,000. Each unit was sold at $1,000, with the company issuing a total of 681 units. These debentures carry a 7% annual interest rate for a 36-month term, with interest payments made semi-annually in either cash or shares at the company's discretion. In terms of capital structure, these new debentures rank in fourth position behind existing Series 1, Series 2, and Series 3 debentures.
Investors hold the option to convert these units into equity, which includes 5,000 common shares and 2,500 common share purchase warrants per $1,000 principal amount. The proceeds from this financing are specifically earmarked for the Lachowice-7 workover and production testing, fulfilling work program obligations in the Cieszyn concession, and providing general working capital for operations in both Poland and Canada. This influx of capital follows a period of significant preparation, including the finalization of landowner access agreements and the completion of critical infrastructure. By securing this funding, Horizon has addressed the immediate liquidity requirements necessary to transition from the planning and permitting phase into active field execution at its Polish assets.
Key Takeaways
- Horizon Petroleum has scheduled Exalo Drilling S.A. to begin rig mobilization for the Lachowice-7 well on July 27, 2026.
- The company raised $681,000 through an oversubscribed secured convertible debenture offering to fund Polish operations.
- Lachowice holds 34 BCF of 2P reserves and 163 BCF of Risked, 2C, Contingent Resources, with over 1.2 TCF of Gas in Place.
EnergyInsyte's Take
In our view, Horizon Petroleum’s transition from permitting to active field testing marks a decisive shift from theoretical resource management to tangible asset validation. The successful closing of an oversubscribed financing round suggests strong investor confidence in the company's ability to navigate the complex regulatory landscape of the Polish energy sector. By securing the "Plan Ruchu" and finalizing the Exalo Drilling contract, Horizon has effectively mitigated several primary execution risks that often stall junior explorers. This signals that the company is moving aggressively to capitalize on its significant 1.2 TCF of Gas in Place. While the timeline for initial cashflow in Q3 2027 remains ambitious, the current focus on acid stimulation and flow testing is the correct technical priority to prove the commercial viability of the naturally fractured carbonate reservoir.
Source: https://www.prnewswire.com/
