Deloitte Corporate Finance has concluded that the proposed scheme is fair and reasonable and did not appear to have any significant disadvantages for Horizon shareholders.
The independent expert report commissioned by Horizon found the proposed merger would help the company fund its substantial development programs, including assets in Papua New Guinea.
Experts also said the proposed merged entity would have greater geographic diversification, increased scale and a potentially elongated production profile than Horizon on a standalone basis.
While the merger would mean a dilution in participation in the future growth of Horizon's gas prospects in PNG, Deloitte advised the scheme added diversification benefits and a portfolio of cash generating assets, without which it could be difficult to realise the underlying value of the PNG assets.
"The merger with ROC provides Horizon with a complementary portfolio of assets that are projected to generate free cash flows of between $US60 million and $US80 million per annum over the next three years," the report states.
"Together with the unencumbered cash ROC had as at March 31 2014 of $US88 [$A93] million, the merger with ROC will assist in funding Horizon's medium-term capital expenditure requirements, whilst providing Horizon shareholders with the opportunity to acquire interests in assets that are already producing and generating cash inflows.
"The merger with ROC provides Horizon with a complementary portfolio of assets that are projected to generate free cash flows of between $US60 million and $US80 million per annum over the next three years.
"In any event the strategic direction would appear to be closely aligned with that of Horizon prior to the proposed scheme, which is focused on developing the PNG gas fields of Stanley and Elevala-Ketu.
"Horizon shareholders will continue to own shares in an oil and gas company with interests in oil producing and oil and gas development assets, albeit shares in a larger entity with more attractive investment characteristics than that exhibited by Horizon on a standalone basis."
If the proposed scheme is approved, Horizon shareholders will receive consideration of 0.724 ROC shares for every share held in Horizon and would collectively own about 58% of the combined entity.
The proposed scheme is expected to be implemented in August 2014, after which Horizon would become a wholly owned subsidiary of ROC.
ROC board-commissioned independent expert Grant Samuel & Associates also found the merger terms were fair and in the best interest for ROC's shareholders and said the benefits outweighed the disadvantages.