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HORIZON HORIZON OIL OIL LIMITED LIMITED ABN 51 009 799 455 Investor Presentation Investor Presentation January 2012 January 2012 January 2012 January 2012 This presentation contains some references to forward looking assumptions, representations, estimates and outcomes. These are uncertain by the nature of the business and no assurance can be given by Horizon Oil Limited that its expectations, estimates and forecast outcomes will be achieved. Actual results may vary materially from those expressed herein.

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  • HORIZON HORIZON OIL OIL LIMITEDLIMITEDABN 51 009 799 455

    Investor PresentationInvestor PresentationJanuary 2012January 2012January 2012January 2012

    This presentation contains some references to forward looking assumptions, representations,estimates and outcomes. These are uncertain by the nature of the business and no assurance canbe given by Horizon Oil Limited that its expectations, estimates and forecast outcomes will beachieved. Actual results may vary materially from those expressed herein.

  • Horizon Oil in the Australian E&P SectorHorizon Oil in the Australian E&P Sector

    2

  • Horizon Oil ProfileHorizon Oil Profile

    E&P petroleum company with geographic focus on SE Asia / Australasia

    ASX listed inclusion within ASX 300 Index

    M k t it li ti f A$243 t A$0 215 h 17 J 2012 (1 130 8 h ) Market capitalisation of A$243m at A$0.215 per share on 17 January 2012 (1,130.8m shares)

    Net production currently 1,500 bopd, generating EBITDA of approx US$4m per month

    2P reserves of 16.8 mmbo and resources of 19.1 mmbo / 326 bcf gas

    Exploration potential of 97 million barrels of oil equivalent (mmboe) unrisked meanExploration potential of 97 million barrels of oil equivalent (mmboe) unrisked mean

    At 30 September 2011:- Cash US$51.1m Convertible bond US$80.0m (matures June 2016, unless converted prior)

    3

  • Shareholder Distribution and Trading StatisticsShareholder Distribution and Trading Statistics

    SHARE PRICE HISTORY TRADING STATISTICS

    4

  • Horizon Oil Board and ManagementHorizon Oil Board and Management

    NON-EXECUTIVE DIRECTORS

    RESPONSIBILITIES EXPERIENCE

    Fraser Ainsworth AMB COMM FAICD FCPA

    Chairman of Board, Chairman of Remuneration Nomination and

    28 years in CSRs resource & energy business, former MD of Delhi, former MD of SAGASCO, Founder & Executive Director of Potential Energy Non executive Director of Envestra Limited and Chairman of TaracB.COMM, FAICD, FCPA Remuneration, Nomination and

    Disclosure Committee, Member of Audit and Risk Management Committee

    Executive Director of Potential Energy, Non-executive Director of Envestra Limited and Chairman of TaracAustralia Limited.

    John HumphreyLL.B., SF Fin

    Director, Chairman of Audit Committee, Member of Risk Management Committee

    Senior partner in Mallesons Stephen Jacques, Director Downer EDI and Wide Bay Australia Limited, sitting member of the Takeover Panel.

    Gerrit J de NysB.Tech, FIEAust, FAICD, CPEng

    Director 40 years experience in civil engineering, construction, oilfield contracting and natural resource investment management. Former MD of IMC Group Direct Investments, Non-Executive Chairman of Red Sky Energy Limited, independent Non-Executive Director of Shui On Construction and Materials Limited.

    Andrew StockB.Eng (Chem) (Hons), FAIE, GAICD

    Director, Member of Risk Management Committee and Audit Committee

    35 years of development, operations and commercial experience in energy industries in Australia and overseas. Director, Executive Projects for Origin Energy, former Executive General Manager for Major Development Projects for Origin Energy. Director of Geodynamics Limited and a member of the Advisory Boards for the Centre of Energy Technology & the Faculty of Engineering Computers and MathematicalBoards for the Centre of Energy Technology & the Faculty of Engineering, Computers and Mathematical Sciences at University of Adelaide.

    MANAGEMENT AND CONSULTANTS

    Brent EmmettB.Sc (Hons)

    Chief Executive Officer / Managing Director and Member of Risk Management and Disclosure C itt

    Over 30 years experience in exploration, E&P management, investment banking / Exxon, Elf Aquitaine, Ampolex, CIBC / Australia, New Zealand, Papua New Guinea, China, USA, Latin America.

    Committee

    Michael SheridanB.Ec, LL.M., F Fin

    Chief Financial Officer / Company Secretary

    Over 20 years experience in finance, commercial and legal areas / Ernst & Young, Ampolex, RGC Limited, Minera Alumbrera Limited, Hutchison Telecoms / Australasia, South East Asia, South America.

    Alan FernieB.Sc

    Manager, Exploration and Development Over 35 years experience in exploration, E&P management and business development / BP, Sun International, Ampolex, Santos, RISC / UK, Latin America, Asia, Australia, Middle East, Europe.

    Paul EttemaB.E. (Hons)

    Petroleum Engineering Adviser Over 30 years experience in reservoir engineering, development planning and operations management / Esso, Bridge Oil, Ampolex, NZOG / Australia, PNG, New Zealand, China.

    Sir Moi Avei Advisor to Board Papua New Guinea Affairs

    Former PNG Deputy Prime Minister and Minister for Petroleum and Energy, Managing Director of Hiri Consultants.

    5

    James (Jim) Slater Principal of Kelly Down Consultants, Drilling and Logistics managers

    Over 35 years experience in managing drilling operation in South America, Middle East and SE Asia, both onshore and offshore. For over 21years KDC has managed heli - supported logistics and drilling operations for good quality clients in PNG, including numerous wells in Western Province.

  • Investment StrategyInvestment Strategy

    Distinct southeast Asian geographic focus

    Strong, long-lived cashflows from Maari field, offshore New Zealand, to fund future capital programcapital program

    Substantial inventory of discovered reserves and resources to bring into production with minimal exposure to geological risk 98 million barrels of oil equivalent (mmboe)with minimal exposure to geological risk 98 million barrels of oil equivalent (mmboe)

    Conservative and highly selective policy on exploration 97 mmboe unrisked mean potential

    Focus on plays with scale and upsidep y p

    Exposure to commodity price upside, especially oil price, and production growth

    6

    Exposure to commodity price upside, especially oil price, and production growth

  • Asset ReviewAsset ReviewFocus on productive fairways and mature operating environments in SE Asia / Australia

    7where there is strong demand for oil and gas

  • Net Reserves, Net Reserves, Resources Resources and Exploration and Exploration Potential at 31/12/10Potential at 31/12/10P t PRL 21 & Bl k 22/12 A i iti d St l U dP t PRL 21 & Bl k 22/12 A i iti d St l U d Post PRL 21 & Block 22/12 Acquisitions and Stanley UpgradePost PRL 21 & Block 22/12 Acquisitions and Stanley Upgrade

    EXPLORATION POTENTIALUnrisked Mean

    CONTINGENT RESOURCESProven + Probable

    RESERVESProven + Probable Unrisked MeanProven + ProbableProven + Probable

    1 Reduced to allow for CNOOC participation at 51%2 Net of production through 31 December 2010

    8

    Total Total reserves and resources reserves and resources 98 98 mmboemmboe Exploration potential Exploration potential 97 97 mmboemmboe

    p g3 Subject to reduction to allow for PNG State Nominee participation at 22.5%

  • Net Production Net Production Forecast Forecast All Reserves and ResourcesAll Reserves and Resources

    9

  • Maari Maari / Manaia Fields / Manaia Fields New ZealandNew ZealandOn stream March 2009

    10producing over 16 producing over 16 mmbommbo and US$1.4 billion in revenue to dateand US$1.4 billion in revenue to date

  • Maari Development ConceptMaari Development Concept

    Production permit covering Maari and Manaia through December 2027 with ability to extend Design plateau production rate 35,000 bopd Wellhead platform allows well intervention without need to import a rig Platform is re-useable at end of field life Platform is re-useable at end of field life Workover rig and coiled tubing unit permanently on platform or at shorebase Spare capacity on platform for additional wells to access upside reserves Back-up systems in well completion and process stream for flow assurance

    11

    FPSO has 600,000 barrel storage; designed to be permanently moored Option to purchase FPSO Raroa in April 2013 for US$33m nominal value US$250m

  • Maari Key PointsMaari Key Points

    Maari Moki zone developed with 5 producer wells and 3 water injectors 60 mmborecoverable reservesrecoverable reserves

    Nameplate capacity of facilities 35,000 bopd

    Production to date 17.0 mmbo, generating gross revenue of over US$1 billion since March 2009March 2009

    High quality crude receiving premium to dated Brent price

    Successful appraisal / development wells drilled from platform on secondary zones M2A sands and Manaia Mangahewa formation, both wells equipped for production

    Focus now on production optimisation and Greater Maari Area development

    12

  • Maari Field Development AssetsMaari Field Development Assets

    13

  • Maari /Manaia Upside PotentialMaari /Manaia Upside Potential

    14Potential to increase recoverable reserves from 60 mmbo to 80 100 mmbo

  • PEP 51313 PEP 51313 New ZealandNew Zealand2,595 sq km block with 5 year term, logical extension of Maari / Manaia

    PEP 51313:

    HZN 30%

    Todd 50% (Op)

    CUE 20%

    15deep prospect and lead inventory in proven play-types

  • China 22/12 China 22/12 Discoveries and ProspectsDiscoveries and Prospectspp176 mmbo-in-place discovered...

    Block 22/12 Post-CNOOC Back-in:

    HZN 26.95%

    CNOOC 51.00% (Op)CNOOC 51.00% (Op)

    ROC 19.60%

    Majuko Corp 2.45%

    16with further exploration potential

  • Block 22/12 Phased Development SchemeBlock 22/12 Phased Development Schemepp

    17

  • Block 22/12 Development Status and TimelineBlock 22/12 Development Status and Timelinepp

    Basic engineering and design complete

    Project ~10% complete

    Over half of US$300m project cost contracted out at fixed price, under budget so farOver half of US$300m project cost contracted out at fixed price, under budget so far

    In field pipeline installation February 2012

    WHPs and PUQB installation May

    Platform topsides installation mid August

    Exploration drilling (3 wells) July October

    Development drilling (11 wells) October 2012 May 2013

    Target first oil December 2012

    18

  • WZ 12WZ 12--8E Early Production Concept8E Early Production Conceptyy

    WZ121PUQBL d bil d ti

    NOEDMobileProduction Platform

    Leased mobile production platform

    Flexible pipelineProductionPlatform Flexible pipeline Initially up to three production

    wells

    Run extended DST or pilot production

    Drill more wells (4-5) depending on production performance wells

    Consider permanent WHP

    19

  • Papua New GuineaPapua New GuineaUptick in industry activity, with large projects gaining traction

    20 major gas aggregation play emerging in Western Corridor / Offshore

  • PRL 4 and PRL 21 PRL 4 and PRL 21 Papua New GuineaPapua New Guinea

    PRL 4:

    HZN 50% (Op)

    Talisman 50%

    PRL 21:

    HZN 45% (Op)

    Talisman 40%

    Kina 15%Kina 15%

    21

  • Stanley Field Development StatusStanley Field Development Statusy py p

    Stanley-2 and -4 development wells successfully drilled with good results

    Reserves certified, with 30% upgrade to pre-drill volumes

    FEED completeFEED complete

    Field production facility site and access near complete; plant supplier selected

    Condensate export pipeline route selected and currently being surveyed

    Condensate storage facility site in Kiunga near complete

    Condensate loadout location on Fly River selected

    Horizon Oil FID presentation planned early 2012

    Production Development Licence application 1H 2012

    22

  • Stanley Development ProjectStanley Development Projecty jy j

    23

  • ElevalaElevala--2 Well and Camp Site2 Well and Camp Site

    24

  • HZN Share Price Catalysts for ReHZN Share Price Catalysts for Re--ratingratingyy gg

    Announcement of reserves based lending facility

    Achievement of construction milestones on Block 22/12 development

    Successful appraisal drilling on Elevala and Ketu discoveries in PRL 21 Successful appraisal drilling on Elevala and Ketu discoveries in PRL 21

    Progress on gas sales to regional PNG consumers and Talisman aggregation scheme

    Final Investment Decision on Stanley condensate stripping project

    Strategic expansion of PNG acreage position

    Exploration success Exploration success PMP 38160, Maari /Manaia 2 wells PEP 51313, New Zealand Pike, Matariki, Te Whatu, Pukeko 1 well

    25

    PNG Tingu Block 22/12 WZ6-12 close-in and deeper prospects 3 wells

  • Please visit the Horizon Oil website Please visit the Horizon Oil website www.horizonoil.com.auwww.horizonoil.com.au to to see:see:--

    Detailed Investor PresentationDetailed Investor PresentationDetailed Investor PresentationDetailed Investor Presentation

    Latest Latest Quarterly ReportQuarterly Report

    Analyst reports on HZNAnalyst reports on HZN

    Level 7, 134 William St, Woolloomooloo NSW 2011Tel: +612 9332 5000Fax: +612 9335 5050

    The reserve and resource information contained in thisannouncement is based on information compiled by Alan Fernie(Manager Exploration and Development). Mr Fernie (B.Sc), who is amember of AAPG, has more than 35 years relevant experience withinthe industry and consents to the information in the form and context in

    hi h itEmail: [email protected] which it appears.