Horizon Oil : Half-Year Report

HORIZON ADVISES HALF-YEAR RESULTS

In accordance with Listing Rule 4.2A.3, Horizon Oil Limited lodges its Half-Year Report for the period to 31 December 2021. The financial results for the period are set out in the attached half-year report which incorporates the Appendix 4D.

HIGHLIGHTS

Increased production into a higher oil price

• Production volumes for the half-year increased 3% over the prior comparative period to 666,206 bbls; production for the 2021 calendar year of 1,354,428 bbls.
• Sales volumes for the half-year were 532,579 bbls, impacted by the deferral of a scheduled Maari lifting (~116,000 bbls (net)) to early January 2022; Sales volumes for the 2021 calendar year of 1,164,805.
• Revenue for the half-year increased 50% to US$39.3 million (~A$54.7 million) (inclusive of hedge settlements) at a net realised oil price of US$73.76/bbl, with a further US$10.7 million of Maari revenue recorded in early January 2022 following the deferred lifting; Revenue for the 2021 calendar year of US$76.6 million.
• Cash operating costs for the half-year of US$17.81/bbl (including workover costs).
• Cash flow from operating activities for the half-year of US$25.0 million, an increase of 150% over the prior comparative period.
• EBITDAX of US$28.0 million for the half-year, an increase of 154% compared to the prior comparative period.
• Net cash of US$14.7 million following a ~US$35 million return of capital to shareholders.
• Current hedge position at 1 February 2022 includes 140,000 bbls covering the period to 30 June 2022 using a mixture of swaps, puts and collars with a weighted average floor price of ~US$80/bbl. During January 2022 110,000 bbls matured such that the Company retains significant exposure to higher oil prices.

China Beibu Gulf WZ12-8E Development - production platform installed on location

• The project continues to progress well. The platform was successfully installed on location and preparations are being made for the arrival of the drilling rig. The COSL Strike drilling rig is scheduled to arrive on site in mid-Februaryto commence development drilling. Anticipated first oil remains unchanged in the first half of Q2 CY2022.

COMMENTING ON THE RESULT, HORIZON'S CHIEF EXECUTIVE OFFICER, CHRIS HODGE, STATED:

"This has been a very positive half-year with increased production at Beibu following a successfully executed workover program and other production optimisation initiatives. The increased production rates during a period of higher oil prices continued to drive increased revenues and free cashflow generation. The deferral of the Maari lifting to early January 2022 has opportunistically pushed the lifting into a higher oil price environment which will further boost revenue and cashflow for the second half of the financial year.

Looking ahead, we have a very busy second half of the financial year with seven wells to be drilled as part of the WZ12-8E development and a possible further 2 to 3 additional infill/nearfield appraisal and exploration wells, which are all targeting near term production growth. With the recent surge in oil prices to multi-year highs, this sets up the Company for a very strong period of production growth and cashflow generation."

2022 HALF-YEAR RESULTS ANNOUNCEMENT | 1

A financial summary and key financial and operational results are set out below:

[All figures are presented in United States dollars, unless otherwise stated].

FINANCIAL SUMMARY

	HORIZON 2022 HALF-YEAR RESULT			31 DEC 2021		31 DEC 2020		CHANGE
			US$'000		US$'000		%
	Oil and gas sales	bbls	532,579	633,500	(16%)
	Oil and gas production	bbls	666,206	646,592	3%
	Sales revenue		39,284	26,238	50%
	EBITDAX1		28,012	11,031	>100%
	Statutory profit/(loss) before tax		14,351	(1,644)	>100%
	Statutory profit for the period			7,827		4,713		66%
	Profit from discontinued operations		-	(3,147)	>100%
	Gain on remeasurement of derivative financial instruments		(359)	(324)	11%
	Financing income - Unrealised movement in value of options		-	(843)	>100%
	Underlying profit after tax			7,468		399		>100%
	Cash on hand			23,627		33,035		(28%)
	Cashflow from operating activities		24.968	9,988	>100%
	Senior debt facility2		8,906	23,030	(61%)
	Net Cash2			14,721		10,005		47%

Note 1: EBITDAX is a financial measure which are not prescribed by Australian Accounting Standards. EBITDAX represents the profit under Australian Accounting Standards adjusted for interest expense, gains on remeasurement of derivative financial instruments, taxation expense, depreciation, amortisation, exploration expenditure and profit/loss from discontinued operations. The directors consider EBITDAX to be a useful measure of performance as it is widely used by the oil and gas industry. EBITDAX information has been extracted from the financial reports for the periods ended 31 December 2020 and 31 December 2021, which have been subject to review by the Group's auditors.

Note 2: Represents principal amounts drawn down.

The Group's CEO, Chris Hodge, and CFO, Richard Beament will host a webcast on 23 February 2022 at 11.00am (AEDT) to discuss the Group's operations and financial results for the Half Year.

To register, please copy and paste the link below into your browser https://ccmediaframe.com/?id=WZpI8TeW.

Authorisation

This ASX announcement is approved and authorised for release by the Company Secretary.

2022 HALF-YEAR RESULTS ANNOUNCEMENT | 2

HALF-YEAR REPORT

INCORPORATING APPENDIX 4D

31 DECEMBER 2021

This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2021 and any public announcements made by Horizon Oil Limited during the interim reporting period

in accordance with the continuous disclosure requirements of the Corporations Act 2001.	HALF-YEAR REPORT | 31 DECEMBER 2021 | 1

APPENDIX 4D

PRELIMINARY FINAL REPORT FOR THE HALF-YEAR ENDED 31 DECEMBER 2021

ABN 51 009 799 455

This Preliminary Final Report is provided to ASX Limited ('ASX') under ASX Listing Rule 4.3A. This information should be read in conjunction with the half-year report for the period to 31 December 2021.

Current reporting period:	Half-year ended 31 December 2021
Previous corresponding period:	Half-year ended 31 December 2020
Results for announcement to the market
		PERCENTAGE CHANGE		AMOUNT
			US$'000
Revenue from continuing operations	Up	50%	to	39,284
Profit from ordinary activities after tax	Up	66%	to	7,827
Profit for the period attributable to members	Up	66%	to	7,827
Underlying profit after tax	Up	>100%	to	7,468
Dividends / distributions
	AMOUNT PER SECURITY	FRANKED AMOUNT PER
	AUD CENTS	SECURITY
Capital Return (paid on 23 August 2021)	3.0			N/A
Final dividend	Nil		Nil
Interim dividend	Nil		Nil
Net Tangible Assets
	2021			2020
	US CENTS		US CENTS
Net tangible asset backing per ordinary share	5.2			6.8

Controlled entities acquired or disposed of

No controlled entities were acquired or disposed of during the current reporting period.

During the prior reporting period, the Group disposed of 100% of the share capital in Horizon Oil (PNG Holdings) Limited, Horizon Oil (Papua) Limited, Horizon Oil (Ubuntu) Limited and Horizon Oil (Ketu) Limited. The financial performance of these entities for the prior period has been disclosed as profit/(loss) from discontinued operations in the prior period income statement. No controlled entities were acquired during the prior reporting period.

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Reconciliation of profit after tax from ordinary activities to underlying profit after tax

US$'000	2021	2020
Profit from ordinary activities after tax	7,827	4,713
Profit from discontinued operations	-	(3,147)
Gain on remeasurement of derivative financial liabilities	(359)	(324)
Financing income - Unrealised movement in value of options	-	(843)
Underlying Profit after tax	7,468	399

Notes:

Reports are based on reviewed consolidated financial statements.

All figures are presented in United States dollars, unless otherwise stated.

Underlying profit after tax is a financial measure which is not prescribed by Australian Accounting Standards and represents the profit under Australian Accounting Standards adjusted for unrealised non-cash financing costs associated with the revaluation of the options issued under the 2016 subordinated loan facility, gains on the remeasurement of derivative financial instruments and the profit/loss generated from discontinued operations. Underlying profit after tax information has not been audited. However, it has been extracted from the reviewed financial reports for the half-years ended 31 December 2021 and 31 December 2020.

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