16 November 2016

The Manager, Company Announcements ASX Limited‌

Exchange Centre 20 Bridge Street‌

Sydney NSW 2000

Horizon Oil Limited ABN 51 009 799 455

Level 6, 134 William Street, Woolloomooloo NSW Australia 2011

Tel +61 2 9332 5000, Fax +61 2 9332 5050 www.horizonoil.com.au

AMENDMENT TO EXPLANATORY MEMORANDUM

Further to the Company's Notice of Annual General Meeting (AGM) and Explanatory Memorandum dated 21 October 2016 (Notice) in respect of the Company's AGM scheduled for 29 November 2016, the Company proposes a change to the formula for calculating the value realised on exercise of share appreciation rights (SARs). This change is relevant to shareholders' consideration of Resolution 5 in the Notice.

Resolution 5 of the Notice provides for shareholders to consider and, if thought appropriate, to pass the following resolution as an ordinary resolution:

"That approval be given for all purposes for the grant of up to 16,617,522 securities (including share appreciation rights ("SARs") and shares which may be issued as a result of the exercise or vesting of SARs) to the Chief Executive Offer and Managing Director, Mr Brent Emmett, in accordance with the terms of his employment agreement and as set out in the accompanying Explanatory Memorandum."

The Notice and Explanatory Memorandum states that the number of SARs to be issued to Mr Emmett is a function of his remuneration and the present day value of the SARs and that the value realised on exercise of the SARs will be based on the appreciation, if any, in the share price of the Company at the time of exercise from the volume weighted average price of shares in the Company for the 10 business day period up to the day before the effective allocation date, being A$0.0483 (Allocation Price).

The Board has resolved to maintain the maximum number of securities which may be issued to Mr Emmett at 16,617,522 securities, but to increase the Allocation Price to A$0.0930.

The net effect of this variation is that the value capable of being realised by Mr Emmett on exercise of the SARs is reduced. The maximum number of securities that may be acquired by Mr Emmett, including any shares issued on exercise of the SARs, will be reduced.

The Notice and Explanatory Memorandum is taken to be varied as described above from the date of this announcement. Other than as described above, the Notice and Explanatory Memorandum remains unchanged and shareholders are encouraged to read the Notice and Explanatory Memorandum in its entirety.

Enclosed with this announcement is an Appendix 3B which notes the change to the principal terms of 16,617,522 securities.

Yours faithfully

Michael Sheridan

Chief Financial Officer & Company Secretary

For further information please contact: Mr Michael Sheridan

Telephone: (+612) 9332 5000

Facsimile: (+612) 9332 5050

Email: [email protected] Or visit www.horizonoil.com.au

Appendix 3B New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

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 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12

Name of entity

Horizon Oil Limited ("Company")

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
2	Number of +securities issued or to be issued (if known) or maximum number which may be issued
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)	Pursuant to Appendix 3B dated 21 October 2016, the Company provided details regarding the proposed issue of 40,989,917 SARs (16,617,522 of which are subject to shareholder's approval). The Board has resolved to vary the principal terms of the proposed issue of 16,617,522 SARs, which are the subject of shareholder's approval (Tranche 2 SARs). The Tranche 2 SARs are exerciseable at A$0.0930. The maximum number of shares to be issued on exercise of the SARs will be 16,617,522. Other than as described, the principal terms of the Tranche 2 SARs remains unchanged (being the terms set out in Appendix 3B dated 21 October 2016).

+ See chapter 19 for defined terms.

16 November 2016 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: the date from which they do the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment
5	Issue price or consideration
6	Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets)
6a	Is the entity an +eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b - 6h in relation to the +securities the subject of this Appendix 3B, and comply with section 6i
6b	The date the security holder resolution under rule 7.1A was passed
6c	Number of +securities issued without security holder approval under rule 7.1
6d	Number of +securities issued with security holder approval under rule 7.1A

+ See chapter 19 for defined terms.

Appendix 3B Page 2 16 November 2016