Appendix 3B New issue announcement Appendix 3B

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX's property and may be made public.

Introduced 1/7/96. Origin: Appendix 5. Amended 1/7/98, 1/9/99, 1/7/2000, 30/9/2001, 11/3/2002, 1/1/2003, 24/10/2005.

Name of entity

Horizon Oil Limited

ABN

51 009 799 455

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of +securities issued or to be issued

Options over unissued shares

2 Number of +securities issued or to be issued (if known) or maximum number which may be issued

1,000,000 options

3 Principal terms of the +securities (eg, if options, exercise price and expiry date; if partly paid +securities, the amount
outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)

1,000,000 options over unissued shares, exercisable at A$0.215 expiring 3 years and 3 months after the grant date.

- deferred exercise period: The options are exercisable in three equal tranches from dates which are 12, 24 and 36 months after grant date.

- share price performance restriction: Options are not exercisable unless and until the 5 day volume weighted average price of HZN shares equals A$0.265. Until such time, all options otherwise exercisable are not able to be exercised.

+ See chapter 19 for defined terms.

10 January 2012 Appendix 3B Page 1

Appendix 3B New issue announcement

4 Do the +securities rank equally in all respects from the date of allotment with an existing +class of quoted +securities?
If the additional securities do not rank equally, please state: