Annual report
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2026 ANNUAL FINANCIAL RESULTS ANNOUNCEMENT | 1 HORIZON ANNOUNCES ANNUAL FINANCIAL RESULTS The results for the financial year ended 30 June 2026 are set out in the attached results announcement, Preliminary Financial Report (Appendix 4E) and Annual Financial Report. All references to reserves and contingent resources within the financial report are drawn from the Horizon Oil 30 June 2026 Reserves and Resources Statement contained in the attached Annual Report. Highlights CAPITAL MANAGEMENT > The Company announc ed a final unfranked (conduit foreign income) dividend of AUD 1. 0 cent per share, returning to shareholders A$17.4 million to be paid in October 2026, while retaining capacity to fund growth across the portfolio. > An FY26 Interim Dividend of AUD 1.5 cents per share was paid on 17 April 2026. > Following payment of the FY26 Final Dividend, cumulative shareholder distributions paid will exceed A$290 million (equivalent to AUD 18.0 cents per share) and an average of AUD3.0 cents per annum over the past six years. PRODUCTION AND CASHFLOW > Record FY26 production1 and sales1 volumes of 2.15 MMboe and 1.98 MMboe, respectively , up 33% and 22% on FY25, driven by the Thailand acquisition and excluding any contribution from Cue. > Underlying revenue1, 2 of US$107.2 million was 2% higher than FY25, including US$23.0 million from the newly acquired Thailand assets and statutory revenue of US$84.2 million. > Group cash operating costs 1 were maintained at approximately US$2 1/boe, supported by low-cost production in Thailand. > EBITDAX1,2 of US$56.4 million was 3% higher than FY25, with cashflow from operating activities2 up 32% to US$47.2 million. > Cash reserves2 at 30 June 2026 were US$37.4 million after US$10.6 million in debt repayments, the US$33.1 million in dividends paid and the substantial investment in organic and inorganic growth. GROWTH > Completed the acquisition of Exxon’s Thailand upstream business on 1 August 2025 , establishing interests in the Sinphuhorm and Nam Phong gas fields and adding a material, low-cost gas platform. > Completed the off-market takeover of Cue, securing a 57.03% controlling interest and adding near- term development, appraisal and exploration opportunities across Australia and Indonesia. > Entering a substantial organic growth phase, with activity underway or planned across Sinphuhorm, Nam Phong, Block 22/12, Mahato, Palm Valley and Sampang, including drilling, booster compression, tie-ins, workovers and development planning. > 2P reserves increased 51% to 13.6 MMboe at 30 June 2026 due primarily to the acquisitions, with 6.7 MMboe of reserves additions delivering approximately 200% reserves replacement. 1. Includes contribution from the Thailand assets from 1 August 2025 completion date, which are equity accounted in the 2026 Annual Report. 2. Horizon obtained control of Cue Energy Resources Limited (Cue) on 17 June 2026 and accordingly has consolidated Cue into the Group’s FY26 Annual Report, noting that profit and loss contributions consolidated are only for the 13 days to 30 June 2026.
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2026 ANNUAL FINANCIAL RESULTS ANNOUNCEMENT | 2 CHIEF EXECUTIVE OFFICER’S COMMENTARY Financial Year 2026 was a transformational year for Horizon as the Group transitioned from a n entity with a collection of producing interests into a scaled, diversified, cash- generative regional upstream platform with near -term growth options. The Company delivered record production and sales volumes, maintained a strong balance sheet, established Thailand as a material and low-cost contributor to cash flow, and successfully completed the acquisition of Cue Energy Resources Limited further expanding our footprint in the region with the addition of assets in Indonesia. These achievements were delivered while continuing to provide meaningful returns to shareholders and maintaining disciplined capital allocation across the business. Against a backdrop of heightened geopolitical uncertainty and an increasing focus on regional energy security, Horizon's diversified portfolio again demonstrated its resilience and strategic value. With producing assets across South-East Asia and Australas ia, the Company is well positioned to supply reliable energy into markets that are increasingly prioritising domestic and regional sources of supply. Exposure to oil, fixed -price gas and oil- linked gas pricing, combined with a growing domestic gas portfolio, provides Horizon with a balanced platform for sustainable growth. Thailand was a key driver of Horizon's record performance during the year. Following completion of the acquisition, the Sinphuhorm and Nam Phong gas fields quickly became significant contributors to Group production, revenue and operating cash flow. The as sets performed strongly throughout the period, benefiting from low operating costs, oil- linked gas pricing and continued operational improvements. A range of initiatives were advanced to enhance reliability and support future development, while the successful integration of the assets and strong collaboration with our joint venture partners, Matahio and PTTEP, established a solid foundation for long -term value creation. With energy security continuing to gain prominence across the region, the outlook for the Thailand business remains particularly positive. Significant investment is planned over the next 6-12 months in new wells, pipelines, tie -ins and related infrastructure to increase near -term production and support field longevity. These projects are expected to further strengthen Thailand's position as a dependable source of cash flow for the Group. Across the remainder of the portfolio, production benefited from successful optimisation and workover activities at both Maari and Block 22/12, while Mereenie continued to provide an important source of gas supply into the Northern Territory market. Horizon also progressed a number of development opportunities during the year, including projects at Nam Phong and Sinphuhorm, studies for a further development phase at WZ12-8E in China, potential drilling opportunities at Maari, and preparations for future activity at Mereenie. Together, these initiatives demonstrate Horizon's commitment to maintaining reliable operations while positioning the portfolio for long-term growth. The ten -year extension of the Maari permit, awarded during the year, was another significant milestone. The extension provides long-term certainty for continued production and investment, reinforces Maari's strategic importance within New Zealand's energy sector, and supports effective planning of future field activities. Combined with Horizon's broader portfolio of producing and development assets, it further strengthens the Company's capacity to generate sustainable cash flow and long -term shareholder value. The successful acquisition of Cue Energy Resources Limited has materially enhanced Horizon's scale, broadened its production base and added a portfolio of near -term development, appraisal and exploration opportunities across Australia and Indonesia, with five wells scheduled to be drilled over the next six months. Importantly, Horizon's record FY26 performance was achieved largely through the strength of its pre -acquisition asset base, demonstrating that the Cue transaction provides a platform for future growth rather than the primary driver of the year's result. The enlarged Group now benefits from greater scale, a broader reserve and production base, and a diversified portfolio spanning Thailand, Indonesia, Australia, New Zealand and China. As a result, Horizon is entering a new phase of growth, supported by an active investment and operational programme designed to unlock further value across the portfolio and enhancing the long-term sustainability of the business.
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2026 ANNUAL FINANCIAL RESULTS ANNOUNCEMENT | 3 Throughout the year, the Company maintained disciplined capital management and generated strong operating cash flow while continuing to invest selectively in initiatives to improve reliability, extend asset life and support future production growth. Capital was allocated across shareholder distributions, debt reduction and strategic growth investments, while the Company's hedging program continued to provide valuable downside protection and cash flow certainty, supporting balance sheet strength and financial flexibility during a period of heightened market volatility. Reflecting Horizon's strong financial performance, robust cash generation and confidence in the outlook, the Company continued its track record of disciplined shareholder returns, including the payment of dividends during the year. The Board remains committed to balancing shareholder returns, investment in attractive growth opportunities and the preservation of financial strength, ensuring Horizon remains well positioned to deliver sustainable long-term value. Richard Beament Chief Executive Officer
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2026 ANNUAL FINANCIAL RESULTS ANNOUNCEMENT | 4 HORIZON ANNOUNCES ANNUAL FINANCIAL RESULTS A financial summary and key financial and operational results are set out below, with all figures presented being in United States dollars, unless otherwise stated. FINANCIAL SUMMARY HORIZON FY 2026 FINANCIAL RESULTS 30 JUNE 2026 US$’000 30 JUNE 2025 US$’000 CHANGE % Oil and gas sales1 boe 1,980,464 1,617,218 22% Oil and gas production1 (net working interest) boe 2,153,615 1,615,030 33% Statutory sales revenue2 84,162 105,307 (20%) Thailand revenue 23,018 - N/A Underlying revenue 2,3 107,180 105,307 2% EBITDAX1,2,4 56,404 54,772 3% Statutory profit after tax1,2 11,118 12,247 (9%) Cashflow from operating activities1,2 47,235 35,865 32% Cash on hand 37,400 39,782 (6%) Senior debt facility5 48,683 26,109 86% Net (debt)/cash (11,283) 13,673 >(100%) Note 1: Includes contribution from the Thailand assets from 1 August 2025 which are equity accounted in the 2026 Annual Report. Note 2: Includes contribution from the consolidation of Cue Energy Resources Limited from 17 June 2026. Note 3: Underlying revenue is a financial measure which is not prescribed by Australian Accounting Standards and represents the revenue under Australian Accounting Standards adjusted to include the revenues from the Group’s Thailand investment (Sinphuho rm and Nam Phong gas fields). The Group’s Thailand investment is equity accounted meaning that the Group’s share of net profit after ta x from the Thailand assets is included in a single line item within the Group’s consolidated statement of comprehensive income. Underlying revenue information has not been audited , however it has been extracted from the audited financial reports for the periods ended 30 June 2025 and 30 June 2026. Note 4: EBITDAX is a financial measure which is not prescribed by Australian Accounting Standards and represents the profit under Australian Accounting Standards adjusted for interest expense, taxation expense, depreciation, amortisation and exploration expenditure (including non-cash impairments). 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 not been audited , however it has been extracted from the audited financial reports for the periods ended 30 June 2025 and 30 June 2026. Note 5: Represents principal amounts drawn down. The Group’s CEO, Richard Beament, and CFO, Kyle Keen will host a webcast on 27 August 2026 at 11.00am (Sydney time) to discuss the Group’s operations and financial results for the Full-Year. To register, please copy and paste the link below into your browser https://ccmediaframe.com/?id=IziIahkU
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2026 ANNUAL FINANCIAL RESULTS ANNOUNCEMENT | 5 The estimates of petroleum reserves and resources contained in this statement are based on, and fairly represent, information and supporting documentation prepared by staff and independent consultants under the supervision of Mr Gavin Douglas, Chief Operating Officer, of Horizon Oil Limited. Mr Douglas is a full-time employee of Horizon Oil Limited and is a member of the American Association of Petroleum Geologists. Mr Douglas’ qualifications include a Master of Reservoir Eva luation and Management from Heriot Watt University, UK and more than 30 years of relevant experience. Mr Douglas consents to the use of the petroleum reserves and resources estimates in the form and context in which they appear in this statement. Authorisation This ASX announcement is approved and authorised for release by the Company Secretary on 27 August 2026. Horizon Oil Limited Richard Beament CEO T: +61 2 9332 5000 F: +61 2 9332 5050 For more information please contact: Level 4, 360 Kent Street Sydney NSW 2000 Australia > horizonoil.com.au
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APPENDIX 4E PRELIMINARY FINAL REPORT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2026 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 Annual Financial Report for the financial year ended 30 June 2026. Current reporting period: Financial year ended 30 June 2026 Previous corresponding period: Financial year ended 30 June 2025 RESULTS FOR ANNOUNCEMENT TO THE MARKET PERCENTAGE CHANGE AMOUNT US$’000 Revenue from ordinary activities Down 20% to 84,162 Underlying revenue Up 2% to 107,180 Profit from ordinary activities after tax Down 9% to 11,118 Profit after tax for the period attributable to members Down 13% to 10,649 Unde rlying revenue is a financial measure which is not prescribed by Australian Accounting Standards and represents the revenue under Australian Accounting Standards adjusted to include the revenues from the Group’s Thailand investment (Sinphuhorm and Nam Phong gas fields). The Group’s Thailand investment is equity accounted meaning that the Group’s share of net profit after tax from the Thailand assets is included in a single line item within the Group’s consolidated statement of comprehensive income. Underlying revenue information has not been audited, however it has been extracted from the audited financial reports for the periods ended 30 June 2025 and 30 June 2026. DIVI DENDS AMOUNT PER SECURITY AUD CENTS FRANKED AMOUNT PER SECURITY Interim dividend (Paid 17 April 2026) 1.5 Nil Final dividend 1.0 Nil Horizon Oil Limited announced on 27 August 2026 that it had declared a final unfranked (conduit fo reign income) dividend distribution of AUD 1.0 cent per Ordinary share. Payment of the final dividend will be on 23 October 2026 with an ex-dividend date of 15 October 2026 and record date of 16 October 2026.
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NET TANGIBLE ASSETS FY26 US CENTS FY25 US CENTS Net tangible asset backing per ordinary share 5.7 4.0 N et tangible asset backing per ordinary share at 30 June 2026 has been calculated using the number of Horizon ordinary shares on issue at that date. As Horizon obtained control of Cue Energy Resources Limited on 17 June 2026, the Group’s net tangible assets at 30 June 2026 include Cue’s net tangible assets. On a pro forma basis, including the new Horizon shares issued on 2 July 2026 in connection with the Cue acquisition, net tangible asset backing per ordinary share would have been 5.2 US cents. C ONTROLLED ENTITIES ACQUIRED OR DISPOSED OF On 1 August 2025, the Group completed the acquisition of a 75% interest in Exxon Mobil Exploration and Production Khorat LLC. At the completion date Exxon Mobil Exploration and Production Khorat LLC was renamed to MH Energy Thailand LLC. On 2 July 2026, the Group announced the successful completion of its takeover offer for Cue Energy Resources Limited (Cue) obtaining a 57.03% controlling interest. For accounting purposes, the acquisition date was determined to be 17 June 2026, being the date the Group obtained a controlling interest and its offer became unconditional. Accordingly, Cue has been consolidated from that date. No controlled entities were disposed of during the current reporting period. During the prior financial year, the Group established a wholly owned subsidiary (Horizon Thailand Investments Pty Ltd). Other than the establishment of this subsidiary, no controlled entities were acquired or disposed of during the prior reporting period. RECONCILIATION OF STATUTORY REVENUE TO UNDERLYING REVENUE US$‘000 FY26 FY25 Statutory revenue 84,162 105,307 Revenue from Thailand (Sinphuhorm & Nam Phong gas fields) 23,018 - Underlying Revenue 107,180 105,307 NOTES: Reports are based on audited consolidated financial statements. All figures are presented in United States dollars, unless otherwise stated. For more information please contact:
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Horizon Oil Annual Report 2026 A ANNUAL REPORT horizonoil.com.au
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Horizon Oil Annual Report 2026 B FY2026 Investment Highlights FY26 was a transformational year for Horizon, establishing a scaled, diversified and cash-generative Asia-Pacific upstream platform with enhanced production, reserves, cash flow and growth optionality. • Delivered FY26 Total Shareholder Return (TSR) of 18%, creating approximately AUD 57 million of shareholder value • Established Thailand as a material contributor to Group cash flow through the acquisition of interests in the Sinphuhorm and Nam Phong gas fields • Completed the acquisition of a 57.03% controlling interest in Cue, adding near-term development, evaluation and exploration opportunities across Australia and Indonesia, with activities underway at Palm Valley, Mahato and Sampang • Reflecting strong operational and financial performance, the Board declared a final unfranked (CFI) dividend of AUD 1.0 cent per share, bringing FY26 dividends to AUD 2.5 cents per share STATUTORY PROFIT AFTER TAX US$11.1m CASH US$37.4m UNDERLYING REVENUE2 US$107.2m FY26 TOTAL DIVIDEND Final dividend declared AUD 1.0cps (Net debt US$11.3m) AUD 2.5 1 cps RECORD FY26 PRODUCTION 2, 153,615boe EBITDAX3 US$56.4m 1 Comprising interim dividend of AUD 1.5 cents per share paid in April 2026, and final dividend of AUD 1.0 cent per share to be paid in October 2026. 2 Represents statutory revenue adjusted to include the revenues from the Group’s Thailand investment (Sinphuhorm and Nam Phong gas fields) which is equity accounted. 3 EBITDAX is a financial measure not prescribed by Australian Accounting Standards and represent the profit under Australian Accounting Standards adjusted for interest expense, taxation expense, depreciation, amortisation, and exploration expenditure (including non-cash impairments). Horizon Oil Annual Report 2026
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Horizon Oil Annual Report 2026 1 Contents 2026 Highlights 01 Reserves and Resources Statement 04 Shareholder Information 112 Chairman’s Message 02 Activities Review 10 Glossary 115 CEO’s Message 03 Annual Financial Report 17 Corporate Directory 117 1 Represents statutory revenue adjusted to include the revenues from the Group’s Thailand investment (Sinphuhorm and Nam Phong gas fields) which is equity accounted. 2 EBITD AX is a financial measure not prescribed by Australian Accounting Standards and represent the profit under Australian Accounting Standards adjusted for interest expense, taxation expense, depreciation, amortisation, and exploration expenditure (including non-cash impairments). Eff ective interests reflect Horizon’s proportionate economic inter est, including MHET and Cue where applicable. OIL & GAS SALES (MMboe) 22 23 24 25 26 UNDERLYING REVENUE1 (US$m) 152.1 108.1 105.3 107.2 22 23 24 25 26 EBITDAX2 (US$m) 22 23 24 25 26 Statutory profit after tax (US$m) 22 23 24 25 26 11.1 56.4 73.0 103.5 71.5 54.8 111.5 24.3 43.9 12.2 25.9 1.20 1.98 1.77 1.30 1.62 Areas of Operation Northern Territory Australia Mereenie oil & gas field (OL4&5] -29.3% effective inter est Palm Valley gas field [OL3] ~8.6% effective interest Dingo gas field [L7) ~8.6% effective interest Onshore Thailand Sinphuhorm gas field HZN 7.5% effective interest Nam Phong gas field HZN 60% effective interest Beibu Gulf China Block 22/12 oil project HZN 26.95% working interest Taranaki Basin New Zealand Maari oil project (PMP 38160) ~28.9% effective inter est Indonesia Mahato PSC (onshore Sumatra] ~6.4% effective inter est Sampang PSC (offshore East Java] ~8.6% effective inter est Horizon Oil Annual Report 2026 1
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Horizon Oil Annual Report 2026 2 A message from our Chairman FY26 was a defining year in Horizon’s continuing evolution. The year has seen significant growth in our business, as well as another excellent operational performance that delivered record production and strong financial results. The completion of the Thailand acquisition and the acquisition of a controlling interest in Cue Energy Resources Limited transformed the company into a larger, more diversified and resilient Asia-Pacific energy business, with increased production, reserves, cash flow and growth opportunities. Together, these transactions represent the culmination of a strategy that has been executed consistently over several years and has placed the Company in a strong position for the future. The acquisition of interests in the producing Sinphuhorm and Nam Phong gas fields established Thailand as a significant contributor to Group cash flow and further diversified our portfolio by geography, commodity exposure and operating partners. Obtaining a 57.03% controlling interest in Cue added high-quality producing, appraisal and exploration interests across Australia, New Zealand and Indonesia, while expanding Horizon’s future opportunity set. The result is a business that is fundamentally different from the one that existed only a few years ago. Horizon now has production and cash flow streams across Thailand, Australia, Indonesia, New Zealand and China, supported by a broader inventory of development, appraisal and exploration opportunities. This diversification enhances resilience and creates multiple pathways for future value creation. Importantly, FY26 was not simply a year of acquisitions. It was also a year in which Horizon established the foundations for its next stage of organic growth. Across the enlarged portfolio, our partner operators are drilling new wells, progressing production enhancement projects, field optimisation initiatives, drilling studies and development activities designed to grow reserves and production, extend field life and support future cash generation. The Board remains committed to delivering attractive returns to shareholders while maintaining financial discipline and preserving capacity to invest in the enlarged portfolio and inorganic growth. Reflecting the Company’s strong operational and financial performance, whilst balancing the substantial investments in both organic and inorganic growth, the Board declared a final dividend of AUD 1.0 cent per share. This brings total FY26 dividends to AUD 2.5 cents per share and, following payment of the final dividend, will take cumulative shareholder distributions to more than AUD 290 million since 2021. As governments across our region place increasing emphasis on energy affordability, reliability and security of supply, Horizon’s portfolio is becoming increasingly aligned with these priorities. Our growing natural gas business supplies the domestic markets in Thailand, the Northern Territory and Indonesia, supporting power generation, industrial activity and economic development. We believe high-quality, low-cost gas assets will continue to play an important role in meeting regional energy demand and supporting reliable energy systems while delivering sustainable returns for shareholders. Our team has delivered another outstanding result this year, and on behalf of the Board, I thank our management team, employees, joint venture partners and shareholders for their continued commitment and support throughout this transformational year. Executing two significant corporate transactions while maintaining strong operating performance reflects the capability and dedication of the Horizon team. With a larger and more diversified portfolio, a substantial organic opportunity set and a clear strategic direction, Horizon enters FY27 well positioned to continue creating long-term value for shareholders. Bruce Clement Chairman
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Horizon Oil Annual Report 2026 3 A message from our CEO FY26 was a landmark year for Horizon, with the completion of the Thailand acquisition and the acquisition of a controlling interest in Cue Energy Resources Limited. Together, these transactions materially increased the scale and diversification of the business and established Horizon as a five-country Asia-Pacific oil and gas producer with a substantial pipeline of development, appraisal and exploration opportunities. This transformation was accompanied by strong operational and financial performance. Horizon delivered record Group production of 2.15 million barrels of oil equivalent, underlying revenue of US$107.2 million and EBITDAX of US$56.4 million. The Company ended the year with cash of US$37.4 million after continuing to invest in the business, repay debt and return capital to shareholders through dividends. In Thailand, the integration of the Sinphuhorm and Nam Phong assets has progressed well, establishing a material new gas business within Horizon and strengthened our exposure to domestic energy markets. Performance was supported by low operating costs, oil-linked gas pricing and field optimisation initiatives at Nam Phong. At Sinphuhorm, development of Pad D and associated infrastructure progressed, while studies and production enhancement initiatives continued across the field. Together, these assets provide a material long-life platform for future growth and will remain a major focus of our investment activities. Across the legacy portfolio, operations continued to perform strongly. At Block 22/12 in China, workovers, production optimisation and reservoir management activities supported performance while studies continued on future development opportunities. At Maari, the Joint Venture completed significant maintenance and workover activity and secured a ten-year permit extension to December 2037, providing a platform for future production enhancement and drilling opportunities. At Mereenie, strong gas sales were supported by improved pricing and the contribution from recently drilled wells, while preparations advanced for the next phase of development activity. Horizon now has a substantial, multi-year organic growth program across the enlarged portfolio. Key initiatives include the planned start-up of the Nam Phong Booster Compressor Project, commencement of production from the PH-14 well on Pad D at Sinphuhorm, maturation of future Thailand drilling programs, development planning at Maari, Block 22/12 and Mereenie. In Cue’s portfolio there is also appraisal drilling at Palm Valley, development and exploration activity at Mahato and commissioning of the Sampang booster compressor. The Cue acquisition has significantly expanded our opportunity set. In addition to increasing our interests in Maari and Mereenie, it introduced further exposure to domestic gas production in the Northern Territory and a portfolio of growth opportunities in Indonesia. Palm Valley and Mahato provide potential near-term catalysts and form part of a broader strategy to build and maintain a balanced portfolio of cash-generating producing assets and future development opportunities across the Asia-Pacific region. A growing proportion of Horizon’s portfolio supplies domestic energy markets across the region. Natural gas from our assets support power generation and industrial customers in Thailand, the Northern Territory and Alice Springs industrial and retail markets, while our oil production contributes to regional energy supply. This role is becoming increasingly important as governments seek reliable, affordable and secure energy while managing the transition of their energy systems. Looking ahead, our priorities are clear: safely maximise cash flow from our diversified asset base, deliver the portfolio of organic growth opportunities, maintain disciplined capital allocation, including selective investment in high-return opportunities, while continuing to provide attractive returns to shareholders. With two transformational acquisitions completed, record FY26 production and a substantial pipeline of investment opportunities, Horizon enters FY27 from a position of strength. I am confident that the Company is well placed to continue delivering sustainable value for shareholders. Richard Beament Managing Director/Chief Executive Officer
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Horizon Oil Annual Report 2026 4 Horizon Oil Limited 2026 Reserves and Resources Statement as at 30 June 2026 1 Based on the reserves change year on year divided by production Horizon completed the acquisition of Cue Energy Resources Limited, obtaining a controlling interest effective 17 June 2026. Accordingly, Horizon includes its proportionate share of Cue’s economic interest (2.6 MMboe) as an acquisition. FY26 has been a record year for the Company, with total Horizon net production of 2.1 MMboe compared with 1.6 MMboe last financial year. The increase is mainly associated with the contribution from Thailand (0.6 MMboe) offsetting natural decline in China oil (down by 0.1 MMboe to 0.6 MMboe in 2026). Both New Zealand oil production (0.5 MMboe) and Mereenie oil and gas production (0.4 MMboe, 93% gas) were largely unchanged due to the ongoing success of the Maari water injection project and the two successful infill wells drilled at Mereenie in the last financial year. Horizon net 2C Contingent Resources increased 61% from 12.3 MMboe to 19.8 MMboe primarily from contributions in Thailand and Horizon’s share of Cue’s interest in Mereenie. Through the identification of several prospects and leads, particularly within the Thailand assets, Horizon’s net 2U Prospective Resources has increased from 2.6 MMboe to 14.3 MMboe. Significant reserves and resource additions were achieved through the acquisition of indirect interests in Thailand through MH Energy Thailand LLC, and in Australia, New Zealand and Indonesia through Cue Energy Resources Limited (6.0 MMboe) resulting in Horizon net Proved + Probable (2P) Reserves increasing 51% from 9.0 MMboe (43% crude and condensate) as at 30 June 2025 to 13.6 MMboe (27% crude and condensate) as at 30 June 2026. The increase in reserves of 6.7 MMboe through acquisitions, revisions and transfers, offsets production of 2.1 MMboe and replaces reserves by approximately 200%1 On 1 August 2025, Horizon announced the completion of the acquisition of an effective 7.5% interest in the Sinphuhorm producing gas and condensate field and a 60% interest in the Nam Phong producing gas field in onshore Thailand. The transaction added 3.9 MMboe of net 2P reserves at the 1 January 2025 effective date. After accounting for 0.4 MMboe of net production to the completion date of 1 August 2025, the acquisition 2P volume of 3.4 MMboe is reflected in the following reserves reconciliation tables. Further reserves definition and infield activities since acquisition have resulted in an upward revision of the 2P reserves volume by 0.8 MMboe, with the majority of the revisions to prior estimates associated with the construction of a new gas pipeline to Northern Sinphuhorm and with the Nam Phong booster compression. Highlights
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Horizon Oil Annual Report 2026 5 Reserves and Contingent Resources by MMboe (Horizon net as at 30 June 2026) 2026 2025 % Change 1P - Proved Reserves MMboe 8.4 5.7 47% 2P - Proved and Probable Reserves MMboe 13.6 9.0 51% 2C - Contingent Resources MMboe 19.8 12.3 61% 2U - Prospective Resources MMboe 14.3 2.6 450% Reserves and Contingent Resources by Product (Horizon net as at 30 June 2026) Gas PJ Crude and Condensate MMbbl Total MMboe 1P - Proved Reserves MMboe 36.7 2.0 8.4 2P - Proved and Probable Reserves MMboe 58.1 3.6 13.6 2C - Contingent Resources MMboe 84.1 5.4 19.8 2U - Prospective Resources MMboe 68.0 2.6 14.3 All volumes quoted in text and table are Horizon net. Refer also note 13. Totals may vary due to rounding. 2026 Reserves and Resources Statement Proved and Proved + Probable Reserves 1P - Proved Reserves (Horizon net) All products MMboe Gas PJ Crude & Condensate MMbbl Developed Undeveloped Total China Block 22/12: Beibu 0.0 0.7 0.7 0.0 0.7 Thailand E5: Nam Phong; E5N, EU1: Sinphuhorm 14.6 0.0 2.4 0.1 2.5 Indonesia Mahato PSC: PB; Sampang PSC: Oyong; Wortel 0.1 0.3 0.3 0.0 0.3 New Zealand PMP 38160: Maari, Manaia 0.0 0.9 0.9 0.0 0.9 Australia OL3: Palm Valley; OL4&OL5: Mereenie; L7: Dingo 22.0 0.2 3.9 0.1 4.0 Closing Balance 30 June 2026 36.7 2.0 8.1 0.2 8.4 2P - Proved and Probable Reserves (Horizon net) All products MMboe Gas PJ Crude & Condensate MMbbl Developed Undeveloped Total China Block 22/12: Beibu 0.0 1.3 1.3 0.0 1.3 Thailand E5: Nam Phong; E5N, EU1: Sinphuhorm 20.5 0.0 3.3 0.3 3.5 Indonesia Mahato PSC: PB; Sampang PSC: Oyong, Wortel 0.3 0.6 0.6 0.0 0.6 New Zealand PMP 38160: Maari, Manaia 0.0 1.4 1.4 0.0 1.4 Australia OL3: Palm Valley; OL4&OL5: Mereenie; L7: Dingo 37.3 0.3 6.0 0.7 6.7 Closing Balance 30 June 2026 58.1 3.6 12.6 1.0 13.6
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Horizon Oil Annual Report 2026 6 Reconciliation of Proved and Proved + Probable Reserves Reserves Reconciliation 30 June 2025 Production Revisions Transfers, Extensions & Discoveries Acquisitions, Divestments & Relinquishments 30 June 2026 1P - Proved Reserves Reconciliation (Horizon net) Crude and Condensate (MMbbl) 2.6 -1.1 0.1 0.0 0.4 2.0 Sales Gas (PJ) 18.0 -6.0 4.6 0.0 20.2 36.7 Total 1P MMboe 5.7 -2.1 0.9 0.0 3.9 8.4 2P - Proved and Probable Reserves Reconciliation (Horizon net) Crude and Condensate (MMbbl) 3.9 -1.1 0.0 0.0 0.8 3.6 Sales Gas (PJ) 29.6 -6.0 4.3 0.0 30.2 58.1 Total 2P MMboe 9.0 -2.1 0.7 0.0 6.0 13.6 Contingent Resources 2C - Contingent Resources (Horizon net) 2C Gas PJ Crude & Condensate MMbbl Total Equivalent MMboe China Block 22/12: Beibu 0.0 1.6 1.6 Thailand E5: Nam Phong; E5N, EU1: Sinphuhorm 30.4 0.0 5.2 Indonesia Mahato PSC: PB; Sampang PSC: Oyong, Wortel 0.0 0.5 0.5 New Zealand PMP 38160: Maari, Manaia 0.0 3.3 3.3 Australia OL3: Palm Valley; OL4&OL5: Mereenie; L7: Dingo 53.7 0.1 9.3 Closing Balance 30 June 2026 (arithmetic sum) 84.1 5.4 19.8 2C - Contingent Resources Reconciliation (Horizon net) 30 June 2025 Revisions Transfers, Discoveries & Extensions Acquisitions, Divestments & Relinquishments 30 June 2026 2C Contingent Resources Crude and Condensate (MMboe) 4.5 0.2 0.0 0.8 5.4 Sales Gas (PJ) 45.6 30.4 0.0 8.1 84.1 Total MMboe 12.3 5.4 0.0 2.2 19.8 2C Contingent Resources have increased largely due to the acquisition of a proportional interests of Cue’s interest in Mereenie (1.4 MMboe) estimated using deterministic volumetric methods including the Stairway and Pacoota reservoirs; and revisions to contingent resources in Thailand (5.2 MMboe) related to contingent drilling of additional infill production wells, late-life com- pression reconfiguration, and to volumes produced beyond the current licence concession. 2026 Reserves and Resources Statement 6Horizon Oil Annual Report 2026
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Horizon Oil Annual Report 2026 7 2026 Reserves and Resources Statement Prospective Resources 2U - Prospective Resources (unrisked Horizon Net) 2U Gas PJ Crude & Condensate MMbbl Total Equivalent MMboe China Block 22/12: Beibu 0.0 2.6 2.6 Thailand E5: Nam Phong; E5N, EU1: Sinphuhorm 52.5 0.0 9.0 Indonesia Mahato, Sampang: PB; Oyong; Wortel 0.0 0.0 0.0 New Zealand PMP 38160: Maari; Manaia 0.0 0.0 0.0 Australia OL4&OL5: Mereenie 15.6 0.0 2.7 Closing Balance 30 June 2026 (arithmetic sum) 68.0 2.6 14.3 2U - Prospective Resources Reconciliation (unrisked) 30 June 2025 Revisions Transfers, Discoveries & Extensions Acquisitions & Divestments 30 June 2026 2U Prospective Resources Crude and Condensate (MMboe) 2.6 0.0 0.0 0.0 2.6 Sales Gas (PJ) 0.0 65.8 0.0 2.3 68.0 Total MMboe 2.6 11.3 0.0 0.4 14.3 Cautionary statement: Prospective Resources are the estimated quantities of petroleum that may potentially be recovered by the application of a future development project(s) related to undiscovered accumulations. The estimates have both an associated risk of discovery and risk of development. Further exploration appraisal and evaluation is required to determine the existence of a significant quantity of hydrocarbons. The 2U Prospective Resources in the above table are unrisked volumes. Volumes reported include those volumes attributable to Horizon through its equity interest in MH Energy Thailand LLC (“MHET”) and Cue Energy Resources Limited (“Cue”), and Legal entitlement to production is held by MHET or Cue under the relevant petroleum agreements. Volumes shown represent Horizon’s proportional economic interest in those reserves and resources and do not constitute a direct contractual entitlement to production. Refer also to note 12. All volumes quoted in text and table are Horizon net. Refer also note 13. Totals may vary due to rounding. Prospective resources have increased to 14.3 MMboe from 2.6 MMboe the previous year. This is attributable to a first-time assessment of exploration and appraisal opportunities within the Mereenie, Sinphuhorm and Nam Phong licenses. For Mereenie, Horizon has evaluated a stacked reservoir Mereenie Footwall opportunity to the southwest of the main field. The opportunity carries an unrisked probabilistic 2U net resource of 15.6 PJ, with a geological chance of success (Pg) of 31%. In the event of geological success, the chance of development (Pd) is assessed at ~100%, reflecting the low-cost nature of appraisal, development and tie in activities, all possible from existing Mereenie field infrastructure. For Thailand, Horizon has probabilistically evaluated a suite of six near field prospects, carrying an arithmetically summed 2U net resource of 52.5 PJ. The Nam Phong Hua Hin Lat prospect is the most material to Horizon on an un-risked net basis, with a best estimate of 38.7 PJ and a geological chance of success (Pg) of 25%. In the event of geological success, the chance of development (Pd) is assessed at ~100%, reflecting the low-cost nature of appraisal, development and tie in activities from existing infrastructure. Horizon expects to work with the respective Joint Ventures to further evaluate these opportunities. Horizon Oil Annual Report 2026
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Horizon Oil Annual Report 2026 8 Permits, Licences and Interests Held The Group held the following oil and gas production, exploration and evaluation, and appraisal interests at the end of the year through subsidiaries and controlling shareholding interests in MH Energy Thailand LLC, and Cue Energy Resources Limited. Net Working Interest of Entity Permit or License Operator Country Entity 30 June 2026 30 June 2025 Horizon Oil Limited Block 22/12 – WZ6-12, WZ12-8 CNOOC China Horizon Oil (Beibu) Limited 26.95% 26.95% PMP 38160 – Maari, Manaia OMV New Zealand Horizon Oil International Limited 26.00% 26.00% OL4 & OL5 - Mereenie Central Petroleum Australia Horizon Australia Energy Pty Limited 25.00% 25.00% MH Energy Thailand LLC2 Blocks E5N & EU1 - Sinphuhorm PTTEP Thailand MH Energy Thailand LLC 10.00% 10.00% Block E5 - Nam Phong Matahio Thailand MH Energy Thailand LLC 80.00% 80.00% Cue Energy Resources3 Mahato PSC – PB Texcal Indonesia Cue Mahato Pty Ltd 11.25% 11.25% Sampang PSC – Oyong, Wortel Medco Indonesia Cue Sampang Pty Ltd 15.00% 15.00% PMP 38160 – Maari, Manaia OMV New Zealand Cue Taranaki Pty Ltd 5.00% 5.00% OL4 & OL5 – Mereenie Central Petroleum Australia Cue Mereenie Pty Ltd 7.50% 7.50% OL3 – Palm Valley Central Petroleum Australia Cue Palm Valley Pty Ltd 15.00% 15.00% L7 – Dingo Central Petroleum Australia Cue Dingo Pty Ltd 15.00% 15.00% 2 On 1 August 2025, Horizon announced the completion of the acquisition of an effective 7.5% interest in the Sinphuhorm producing gas field and an effective 60% interest in the Nam Phong producing gas field through a consortium, with Horizon acquiring a 75% controlling interest in Exxon Mobil Exploration and Production Khorat (renamed MH Energy Thailand LLC) 3 As at 30 June 2026, Horizon had a 57.03% controlling interest in Cue Energy Resources. Horizon Oil Annual Report 20268 2026 Reserves and Resources Statement
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Horizon Oil Annual Report 2026 9 Horizon Oil Annual Report 2026 Notes 1 All estimates are prepared in accordance with the Society of Petroleum Engineers (SPE) Petroleum Resources Management System (PRMS) revised 2018. 2 Relevant terms used in this statement, capitalised or otherwise, have the same meaning given to those terms in the SPE PRMS. 3 Reserves are those quantities of petroleum anticipated to be commercially recoverable by application of development projects to known accumulations from a given date forward under defined conditions. 4 Contingent Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations by application of development projects, but which are not currently considered to be commercially recoverable owing to one or more contingencies. 5 Prospective Resources are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. See also above Cautionary Statement. 6 Contingent and Prospective Resource estimates quoted for China have assumed China National Offshore Oil Corporation (‘CNOOC’) participation at 51%. CNOOC is entitled to participate at up to a 51% equity level in any commercial development within Block 22/12. Prospective Resources also only include Horizon’s on-block share. 7 Liquids are equal to the total of oil, condensate and natural gas liquids where 1 barrel of condensate or natural gas liquids equals 1 barrel of oil. Gas reserves have been converted to oil equivalent using 5.816-PJ equals one million barrels of oil equivalent. Abbreviations and units used throughout the tables and text are defined as follows: PJ (petajoule), TJ (terajoule), bbl (barrels), MMbbl (million barrels), boe (barrels of oil equivalent), MMboe (million barrels of oil equivalent). 8 Raw Gas is natural gas as it is produced from the reservoir which may include varying amounts of heavier hydrocarbons which liquefy at atmospheric conditions, water vapor and other non- hydrocarbon gases such as hydrogen sulphide, carbon dioxide, nitrogen or helium. 9 Sales Gas represents volumes that are likely to be present a saleable product. Sales Gas are reported assuming average values for fuel, flare and shrinkage considering the variable reservoir fluid properties of each constituent field on an energy basis the customary unit is PJ. PJ means petajoules and is equal to 1015 joules. 10 For Reserves and Contingent Resources, depending on the asset, either deterministic estimates or probabilistic estimates have been used. For Prospective Resources, all estimates are probabilistic estimates. 11 Reported estimates of petroleum Reserves, Contingent Resources and Prospective Resources have been aggregated by arithmetic summation by category. 1P Reserves reported beyond the field, property or project level aggregated by arithmetic summation may be a very conservative estimate due to the portfolio effects of arithmetic summation. 12 Horizon recognises its share of reserves associated with MH Energy Thailand LLC (“MHET”) and Cue Energy Resources Limited (“Cue”) and on a proportionate basis, reflecting Horizon’s indirect economic interest in the underlying petroleum assets. The underlying petroleum asset interests and associated production entitlements are held legally by Cue or MHET under applicable licences and joint venture agreements. These entitlements are attributed to Horizon for reserves and resource reporting purposes in proportion to its ownership interest in Cue and MHET as at 30 June 2026, on the basis that Horizon has an economic interest in, and exposure to the risks and rewards associated with, those assets. As at 30 June 2026, Horizon’s interest in Cue is 57.03% and in MHET is 75%. 13 Estimates are reported according to Horizon Oil’s net economic interest, this being Horizon Oil’s net working interest adjusted for entitlements (Economic Interest adjustment) under production-sharing contracts and risked-service contracts; and are reported net of royalties and lease fuel up to the reference point. Reference points for Horizon’s petroleum Reserves and Contingent Resources and production are defined points where normal operations cease, and petroleum products are measured under defined conditions prior to custody transfer. For China, Horizon’s net economic interest ranges from 24.32% to 26.95%. For New Zealand and Australia, Horizon’s net economic interest is equal to Horizon’s net working interest of 26.00% and 25.00% respectively (excluding Horizon Oil’s indirect interest via Cue). For Indonesian reserves, Horizon’s net economic interest reflects its indirect interest in the Mahato PSC and the Sampang PSC; contract terms result in net Horizon economic interests in these PSCs ranging from approximately 4.8% to 7.9%. Contingent resources booked for the Mahato PSC are related to the Telisa development that is not yet sanctioned, with economics and royalties not yet known, therefore a net effective equity of 6.42% is assumed for this booking. For the Sinphuhorm and Nam Phong fields in Thailand, Horizon’s net economic interest is equal to Horizon’s net working interest of 7.50% and 60.00% respectively. 14 Horizon Oil employs a Reserves Management System to ensure the veracity of data used in the estimation process. This process includes review by senior staff where data is endorsed for inclusion in the estimating process. Estimates are reviewed annually, at a minimum, with interim reviews as required, to respond to any material changes. Horizon Oil undertakes semi- regular external reviews to complement its own internal process. 15 The estimates of petroleum Reserves and Resources contained in this statement are based on, and fairly represent, information and supporting documentation prepared by staff and independent consultants under the supervision of Mr Gavin Douglas, Chief Operating Officer of Horizon Oil Limited. Mr Douglas is a full- time employee of Horizon Oil Limited and is a member of the American Association of Petroleum Geologists and the Society of Petroleum Engineers. Mr Douglas’ qualifications include a Masters of Reservoir Evaluation and Management from the Heriot Watt University UK, and more than 30 years of relevant experience. Mr Douglas consents to the use of the petroleum Reserves and Resources estimates in the form and context in which they appear in this statement. 16 Some totals in the tables may not add due to rounding. Horizon Oil Annual Report 2026 2026 Reserves and Resources Statement
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10 ACTIVITIES REVIEW Horizon Oil Limited Horizon Oil Annual Report 202610
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During the financial year, the Group’s working interest share of production from the Beibu Gulf fields was 622,240 barrels of oil, with crude oil sales of 523,843 barrels generating production revenue of US$41.6 million. Cash operating costs were approximately US$25/bbl produced, excluding workover costs. Production was supported by targeted well optimisation activities, increased water -handling capacity and a series of workovers across the WZ6-12 and WZ12-8 fields. Material activities included the October 2025 workover of WZ6-12-A2, the December 2025 workover of the WZ12- 8E-A7 water disposal well, the December 2025 water shut-off treatment of WZ12-8E-A12H and a six-well WZ12- 8W workover program that commenced in December 2025. Water injection performance at WZ12 -8E supported reservoir pressure maintenance and stable field performance. At the date of this report, all workover programs were safely completed. The Joint Venture continues to progress production enhancement initiatives, additional liquids -handling capacity and feasibility studies for a potential further development phase at WZ12 -8E, which may include a multi-well drilling program , subject to customary approvals. Horizon Oil Annual Report 2026 11
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During the financial year, the Group’s direct working interest share of production from the Maari and Manaia fields was 446,857 barrels of oil. Crude oil sales were 383,542 barrels, generating production revenue of US$32.7 million. Cash operating costs averaged approximately US$26/bbl produced, excluding workover costs. Production benefited from the successful return to service of the MN1 and MR4 wells following July 2025 workovers, with field production reaching its highest monthly rate since 2020. A planned five-yearly maintenance shutdown was completed in March 2026, followed by the MN1 workover, which commenced on 1 April 2026 and returned the well to production in early May. During June 2026, a workover commenced on the MR3 well following a downhole pump failure. During the financial year, the Maari Joint Venture received approval for a ten -year extension of PMP 38160 to December 2037, supporting continued production, future development planning and orderly decommissioning. The extension provides a platform to pursue additional value- accretive opportunities within the field. During the year, the Joint Venture advanced subsurface, reservoir and drilling studies directed towards a potential future drilling campaign, with work focused on candidate well selection, reserves maturation and execution planning. These studies are expected to support investment decisions on future development opportunities aimed at sustaining production and enhancing recovery from the Maari field. Notes: 1. Horizon holds a controlling interest of 57.03% in Cue and accordingly consolidates Cue for financial reporting purposes. Production and sales volumes for FY26 exclude any contribution from Cue as Horizon obtained control of Cue on 17 June 2026. Horizon Oil Annual Report 2026 12
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During the financial year, the Group’s direct working interest share of production from the Mereenie field was 430,190 barrels of oil equivalent, with sales of 429,614 barrels of oil equivalent generating production revenue of US$17.8 million. Cash operating costs were approximately US$12/boe produced, excluding royalties. Production was supported by the continued strong performance of the WM29 and WM30 development wells, which contributed materially to field gas sales. Cash flow benefited from stronger contracted gas pricing and the October 2025 execution of a gas supply agreement with McArthur River Mining covering gas supply across 2026 and 2027. Planning for the next phase of field development continues, with well designs, long-lead procurement and drilling preparations hav ing been substantially completed, enabling rapid progression of future development wells should demand and commercial conditions support investment. The Joint Venture also continued subsurface studies and a long -term field development review aimed at identifying additional drilling opportunities and field optimisation initiatives to maximise future recovery from the field. Notes: 1. Horizon holds a controlling interest of 57.03% in Cue and accordingly consolidates Cue for financial reporting purposes. Production and sales volumes for FY26 exclude any contribution from Cue as Horizon obtained control of Cue on 17 June 2026. Horizon Oil Annual Report 2026 13
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The acquisition of Horizon’s interests in the Sinphuhorm and Nam Phong gas fields completed on 1 August 2025, establishing a material new production and cashflow platform in Thailand. For FY26, production totalled 654,328 barrels of oil equivalent, with sales of 643,465 barrels of oil equivalent generating production revenue of US$23.0 million. Cash operating costs were approximately US$7/boe produced, excluding royalties. The assets made a significant contribution to Group production and cash flow, supported by low operating costs and oil -linked gas pricing. At Nam Phong, field optimisation initiatives delivered an estimated 7% uplift in production without additional capital expenditure, while the Booster Compressor Project, sanctioned in December 2025, is expected to support increased production rates and reserve recovery. At Sinphuhorm, development of Well Pad D and associated flowline infrastructure progressed during the year, with PH-14 achieving first gas on 11 August 2026, approximately 50 days ahead of schedule. The well is delivering a gross gas rate of 25 - 30 million cubic feet of gas per day (MMSCFD), providing a meaningful contribution to field production. Ongoing production enhancement initiatives, including installation of a mini booster compressor and targeted water shut-off operations, continue to support field performance and optimise recovery. The Joint Venture continues to progress a range of production growth opportunities across both assets, including start-up of the Nam Phong Booster Compressor Project and maturation of a proposed 2027 drilling program at Sinphuhorm aimed at maximising futur e gas sales, reserves and long-term value. Horizon Oil Annual Report 2026 14
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The acquisition of a 57.03% controlling interest in Cue Energy Resources Limited was completed on 2 July 2026, resulting in Horizon obtaining effective control on 17 June 2026. Accordingly, Horizon has consolidated Cue for financial reporting purposes at 30 June 2026. Cue also holds interests in the Maari and Mereenie fields, which are included in the preceding sections. Notes: 1. Horizon holds a controlling interest of 57.03% in Cue and accordingly consolidates Cue for financial reporting purposes. Production and sales volumes for FY26 exclude any contribution from Cue as Horizon obtained control of Cue on 17 June 2026. Palm Valley supplies gas into Northern Territory and East Coast markets under long-term gas sales arrangements. During the year, the Joint Venture secured a long-term gas supply agreement with the Northern Territory Government, supporting a two -well appra isal program comprising PV14 and PV15. The drilling program is designed to evaluate additional gas resources and support future gas supply into the Northern Territory market. The drilling program commenced in July 2026 with the spudding of the PV14 well. (Cue: 15%1) The Dingo field supplies gas under a long-term contract to support electricity generation for Alice Springs. Production remained stable during the year. (Cue: 11.25%1) Cue holds an 11.25% interest in the Mahato PSC in Central Sumatra, where production is sourced primarily from the Bekasap reservoir. Development activity continued during the year, with additional infill drilling approved and further development planning underway. The Operator is also progressing the OPL-3 development plan and preparations for the GA-1 exploration well. Horizon Oil Annual Report 2026 15
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Cue holds a 15% interest in the Sampang PSC, which contains the producing Oyong and Wortel gas fields. Production continues from both fields while the Joint Venture progresses compression facilities and evaluates opportunities to optimise recovery from existing wells . Cue has advised the Joint Venture that it does not intend to participate beyond the current PSC expiry in December 2027. Notes: 1. Horizon holds a controlling interest of 57.03% in Cue and accordingly consolidates Cue for financial reporting purposes. Production and sales volumes for FY26 exclude any contribution from Cue as Horizon obtained control of Cue on 17 June 2026. Horizon Oil Annual Report 202616
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FINANCIAL REPORT This annual financial report covers the consolidated financial statements for the Group, consisting of Horizon Oil Limited (the ‘Company’) and its subsidiaries. The annual financial report is presented in United States dollars. Horizon Oil Limited is a public company limited by shares and is listed on the ASX. It is incorporated and domiciled in Australia. Its registered office and principal place of business is: Level 4 360 Kent Street Sydney NSW 2000 The annual financial report was authorised for issue by the Board of Directors on 27 August 2026. The Board of Directors has the power to amend and reissue the annual financial report. All references to reserves and contingent resources within the financial report are drawn from the Horizon 2026 Reserves and Resources Statement dated 10 August 2026. For the financial year ended 30 June 2026 Horizon Oil Limited Horizon Oil Annual Report 2026 17
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Horizon Oil Annual Report 2026 18 DIRECTORS’ REPORT Your directors present their report on the consolidated entity (referred to hereafter as the ‘Group’) consisting of Horizon O il Limited (the ‘Company’) and the subsidiaries it controlled at the end of, or during the financial year ended, 30 June 20 26. Directors The following persons were directors of Horizon Oil Limited during the whole, or for part where noted, of the financial year and up to the date of this report: B Clement R Beament C Costello G Bittar N Burgess P Goode S Birkensleigh (retired on 29 August 2025) Review of operations Principal activities During the financial year, the principal activities of the Group continued to be directed towards petroleum production, development and exploration. A detailed review of the operations of the Group during the financial year is set out in the Activities Review on pages 10 to 16 of this annual financial report. Group Financial Performance Consolidated Statement of Profit or Loss and Other Comprehensive Income 2026 Profit Drivers On 1 August 2025, the Group completed the acquisition of Exxon Mobil Exploration and Production Khorat LLC, subsequently renamed MH Energy Thailand LLC (MHET). The Horizon Group owns a 75% share of MHET, resulting in the ownership of an effective 7.5% interest in the Sinphuhorm gas field and a 60% interest in the Nam Phong gas field. The effective date of the transaction was 1 January 2025 with revenues ear ned and costs incurred from the effective date to the completion date, 1 August 2025, adjusted against the initial purchase consideration. Horizon’s investment in MHET is classified as a joint venture and is accounted for using the equity method of accounting – refer to Note 1 and 13 in this report for further details . The following discussions include the eleven-month contribution from the Thailand investment. On 2 July 2026, the Group announced the successful completion of its takeover offer for Cue Energy Resources Limited (Cue) obtaining a 57.03% controlling interest . For accounting purposes, the acquisition date was determined to be 17 June 2026, being the date the Group obtained a controlling interest and its offer became unconditional. Accordingly, Cue has been 84.2 56.4 16.5 11.1 (36.6) (5.6) 14.5 (0.8) (32.3) (6.8) (6.7) 5.2 (3.9) Revenue Operating costs (excl. amortisation) G&A, insurance, and other expenses Thailand EBITDAX EBITDAX Exploration and impairment expenses Depreciation and amortisation Thailand depreciation and amortisation EBIT Finance costs net of interest income Royalty and income tax Thailand income tax and finance costs FY26 Statutory Profit
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Horizon Oil Annual Report 2026 19 DIRECTORS’ REPORT Your directors present their report on the consolidated entity (referred to hereafter as the ‘Group’) consisting of Horizon O il Limited (the ‘Company’) and the subsidiaries it controlled at the end of, or during the financial year ended, 30 June 20 26. Directors The following persons were directors of Horizon Oil Limited during the whole, or for part where noted, of the financial year and up to the date of this report: B Clement R Beament C Costello G Bittar N Burgess P Goode S Birkensleigh (retired on 29 August 2025) Review of operations Principal activities During the financial year, the principal activities of the Group continued to be directed towards petroleum production, development and exploration. A detailed review of the operations of the Group during the financial year is set out in the Activities Review on pages 10 to 16 of this annual financial report. Group Financial Performance Consolidated Statement of Profit or Loss and Other Comprehensive Income 2026 Profit Drivers On 1 August 2025, the Group completed the acquisition of Exxon Mobil Exploration and Production Khorat LLC, subsequently renamed MH Energy Thailand LLC (MHET). The Horizon Group owns a 75% share of MHET, resulting in the ownership of an effective 7.5% interest in the Sinphuhorm gas field and a 60% interest in the Nam Phong gas field. The effective date of the transaction was 1 January 2025 with revenues ear ned and costs incurred from the effective date to the completion date, 1 August 2025, adjusted against the initial purchase consideration. Horizon’s investment in MHET is classified as a joint venture and is accounted for using the equity method of accounting – refer to Note 1 and 13 in this report for further details . The following discussions include the eleven-month contribution from the Thailand investment. On 2 July 2026, the Group announced the successful completion of its takeover offer for Cue Energy Resources Limited (Cue) obtaining a 57.03% controlling interest . For accounting purposes, the acquisition date was determined to be 17 June 2026, being the date the Group obtained a controlling interest and its offer became unconditional. Accordingly, Cue has been 84.2 56.4 16.5 11.1 (36.6) (5.6) 14.5 (0.8) (32.3) (6.8) (6.7) 5.2 (3.9) Revenue Operating costs (excl. amortisation) G&A, insurance, and other expenses Thailand EBITDAX EBITDAX Exploration and impairment expenses Depreciation and amortisation Thailand depreciation and amortisation EBIT Finance costs net of interest income Royalty and income tax Thailand income tax and finance costs FY26 Statutory Profit consolidated from that date. As a result, the Group recognised Cue’s balance sheet and the related non-controlling interest as at 30 June 2026, together with 13 days of post-acquisition earnings in the FY26 consolidated statement of profit or loss. The Group reported a statutory profit after tax of US$11.1 million for FY26 (FY25: US$12.2 million). The modest decline relative to the prior year primarily reflected the timing of oil liftings, with more than 130,000 bbls of oil inventory at Maari and Block 22/12 on hand at 30 June 2026 that was subsequently sold during July and August 2026, generating approximately US$11 million in revenue. This was offset by the acquisition of the additional producing interests in Thailand and the recognition of a deferred tax asset relating to historical Australian tax losses, supported by the continued strong performance of the Mereenie asset during FY26. The statutory profit result includes several significant non-cash items, comprising US$32.2 million (FY25: US$33.0 million) of amortisation of production -p h a s e a s s e t s , U S $ 2 . 8 m i l l i o n ( F Y 2 5 : U S $ 2 . 7 m i l l i o n ) o f f i n a n c e c o s t s a s s o c i a t e d w i t h t h e unwinding of restoration provisions, and US$1.5 million (FY25: US$1.6 million) of share -based payment expense relating to performance rights and deferred STI rights granted to employees. EBITDAX increased to US$56.4 million (FY25: US$54.8 million) despite the deferral of Maari and Block 22/12 oil liftings. The increase was underpinned by an 11 ‑month contribution from the additional producing interests acquired in Thailand, comprising the Sinphuhorm and Nam Phong gas fields, together with continued strong operational performance across the Group’s remaining producing assets. EBIT was US$16.5 million (FY25: US$21.1 million). The Group generated robust operating cash flows of US$47.2 million (FY25: US$35.9 million), facilitating the return of US$33.1 million to shareholders through dividends paid during the financial year and the repayment of US$10.6 million of the senior debt facility. EBITDAX and EBIT are financial measures which are not prescribed by Australian Accounting Standards and represent the profit under Australian Accounting Standards adjusted for interest expense, taxation expense, depreciation, amortisation, and exploration expenditure (including non -c a s h i m p a i r m e n t s ) . T h e d i r e c t o r s c o n s i d e r E B I T D A X a n d E B I T t o b e u s e f u l measures of performance as they are widely used by the oil and gas industry. EBITDAX and EBIT information has not been audited. They have been extracted from the audited annual financial reports for the financial years ended 30 June 2026 and 30 June 2025. Basic earnings per share for the financial year was 0.65 US cents (FY25: 0.75 US cents) based on a weighted average number of fully and partly paid ordinary shares on issue of 1,628,725,163 shares. Sales and Production The Group achieved record annual net working interest production of 2.15 million boe during FY26, reflecting the successful execution of its growth strategy and the transformational acquisition of the Sinphuhorm and Nam Phong gas fields in Thailand. Production comprised contributions from Block 22/12 (0.6 million boe), Maari/Manaia (0.4 million boe), Mereenie (0.4 million boe) and the newly acquired Thailand assets (0.7 million boe). The acquisition of the Thailand assets established a material new production and cash flow platform for the Group and was the principal driver of this record result. Production w a s f u r t h e r s u p p o r t e d b y t h e s u c c e s s f u l r e t u r n t o s e r v i c e o f t h e M N 1 a n d M R 4 w e l l s a t M a a r i f o l l o w i n g w o r k o v e r s , t h e continued strong performance of the WM29 and WM30 development wells at Mereenie, and targeted well optimisation and workover programs across the Block 22/12 fields. These initiatives aided in offsetting the natural decline of mature producing assets and reinforced the value of ongoing field optimisation and reservoir management activities. Operationally, the year was characterised by strong asset stewardship, successful well intervention and optimisation programs, continued reserves and resources maturation activities and the progression of multiple organic growth opportunities. Key milestones included the ten-year extension of the Maari mining permit to December 2037, sanctioning of the Nam Phong and Sinphuhorm Booster Compressor Projects, advancement of the tie in of Sinphuhorm Pad D and continued planning for future Sinphuhorm development drilling. These initiatives provide a solid platform for future production enhancement and reserves recovery which will in turn support future cash flow generation across the portfolio. Sales volumes during FY26 totalled approximately 1.98 million boe, comprising 0.5 million boe from Block 22/12, 0.4 million b o e f r o m M a a r i , 0 . 4 m i l l i o n b o e f r o m M e r e e n i e a n d 0 . 6 m i l l i o n b o e f r o m t h e n e w l y a c q u i r e d T h a i l a n d g a s a s s e t s . T h e acquisition of the Sinphuhorm and Nam Phong fields materially increased Group sales volumes and broadened the portfolio's exposure to long-term gas sales under contracted and oil-linked pricing arrangements. Revenue from directly held assets totalled US$81.7 million, inclusive of hedge settlements, comprising US$38.1 million from Block 22/12, US$26.0 million from Maari and US$17.6 million from Mereenie. In addition, the newly acquired Thailand assets generated production revenue of US$23.0 million, which is recognised through the Group’s share of net profit from joint venture investments with Cue’s 13-day revenue contribution being US$2.5 million . The portfolio benefited from a diversified mix of oil and gas production, strong commodity pricing and successful production enhancement activities across the portfolio.
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Horizon Oil Annual Report 2026 20 Operating costs for the period were US$68.8 million, lower than the prior comparative period (FY25: US$76.8 million) primarily due to the timing of oil liftings, with a portion of production costs recognised in crude oil inventory at 30 June 2026 and deferred until the associated sales are recognised. General and Administrative Expenses General and administrative expenses reduced by US$0.4 million during the financial year to US$3.5 million (20 25: US$ 3.9 million). General and administrative expenses comprised net employee benefits expense of US$ 2.0 million (including non - cash share-based payment expense of US$1.5 million), corporate office expense of US$1.4 million, and depreciation of US$0.1 million. Insurance Expense Insurance expense of US$2.0 million (2025: US$1.9 million) was materially in line with the prior financial period. Exploration Expenses Exploration expenses were US$0.5 million (2025: US$0.5 million) and was focused on evaluation of opportunities across the portfolio and the evaluation of inorganic growth opportunities. Finance Costs/Income The Group’s net borrowing costs increased by US$2.2 million to US$6.7 million during the period, primarily due to the drawdown of additional debt used to fund the Thailand acquisition and the cash components of the Cue Energy Resources Limited acquisition. Income and Royalty Tax The net income and royalty tax benefit of US$5.2 million (2025: net expense of US$4.4 million) incurred during the financial year included a current tax expense of US$ 2.7 million, a deferred income tax benefit of US$8.5 million and a royalty related tax expense of US$0.5 million. Royalty tax expense of US$0.5 million reflected cash and deferred royalty tax associated with the Maari/Manaia field. The deferred income tax benefit of US$ 8.5 million included the recognition of a deferred tax asset relating to historical Australian tax losses. Consolidated Statement of Financial Position At 30 June 2026, total assets were US$281.9 million (2025: US$180.2 million) and total liabilities were US$188.6 million (2025: US$114.9 million), resulting in net assets of US$93.3 million (2025: US$65.3 million). These balances include the consolidation of Cue Energy Resources Limited as at 30 June 2026, which contributed to the increase in both total assets and total liabilities compared with the prior year. At 30 June 2026, the Group reported a net debt position of US$11.3 million. Net debt of US$11.3 million comprised of cash and cash equivalents held of US$ 37.4 million (20 25: US$ 39.8 million) offset by nominal borrowings of US$ 48.7 million (20 25: US$26.1 million). At financial year end, borrowings consisted of US$48.7 million principal outstanding on the Group’s debt Facility.
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Horizon Oil Annual Report 2026 21 Operating costs for the period were US$68.8 million, lower than the prior comparative period (FY25: US$76.8 million) primarily due to the timing of oil liftings, with a portion of production costs recognised in crude oil inventory at 30 June 2026 and deferred until the associated sales are recognised. General and Administrative Expenses General and administrative expenses reduced by US$0.4 million during the financial year to US$3.5 million (20 25: US$ 3.9 million). General and administrative expenses comprised net employee benefits expense of US$ 2.0 million (including non - cash share-based payment expense of US$1.5 million), corporate office expense of US$1.4 million, and depreciation of US$0.1 million. Insurance Expense Insurance expense of US$2.0 million (2025: US$1.9 million) was materially in line with the prior financial period. Exploration Expenses Exploration expenses were US$0.5 million (2025: US$0.5 million) and was focused on evaluation of opportunities across the portfolio and the evaluation of inorganic growth opportunities. Finance Costs/Income The Group’s net borrowing costs increased by US$2.2 million to US$6.7 million during the period, primarily due to the drawdown of additional debt used to fund the Thailand acquisition and the cash components of the Cue Energy Resources Limited acquisition. Income and Royalty Tax The net income and royalty tax benefit of US$5.2 million (2025: net expense of US$4.4 million) incurred during the financial year included a current tax expense of US$ 2.7 million, a deferred income tax benefit of US$8.5 million and a royalty related tax expense of US$0.5 million. Royalty tax expense of US$0.5 million reflected cash and deferred royalty tax associated with the Maari/Manaia field. The deferred income tax benefit of US$ 8.5 million included the recognition of a deferred tax asset relating to historical Australian tax losses. Consolidated Statement of Financial Position At 30 June 2026, total assets were US$281.9 million (2025: US$180.2 million) and total liabilities were US$188.6 million (2025: US$114.9 million), resulting in net assets of US$93.3 million (2025: US$65.3 million). These balances include the consolidation of Cue Energy Resources Limited as at 30 June 2026, which contributed to the increase in both total assets and total liabilities compared with the prior year. At 30 June 2026, the Group reported a net debt position of US$11.3 million. Net debt of US$11.3 million comprised of cash and cash equivalents held of US$ 37.4 million (20 25: US$ 39.8 million) offset by nominal borrowings of US$ 48.7 million (20 25: US$26.1 million). At financial year end, borrowings consisted of US$48.7 million principal outstanding on the Group’s debt Facility. Consolidated Statement of Cash Flows 2026 Cash Drivers The Group's strong operating cash generation of US$47.2 million enabled Horizon to continue executing its balanced capital allocation strategy during FY2026. Cash inflows from operations funded substantial shareholder returns of US$33.1 million, debt repayments of US$10.6 million and US$7.4 million of investment in existing producing assets. Horizon also completed the acquisitions of the Thailand assets and a controlling interest in Cue Energy Resources Limited during the year. Consistent with management's disciplined capital management approach, acquisition expenditure was supported through targeted utilisation of the Group's debt facility, with US$30.2 million drawn to fund transactions requiring net cash consideration of US$25.6 million. Despite these significant investments and returns to shareholders, the Group closed FY2026 with cash and cash equivalents of US$37.4 million, demonstrating the strength of the underlying business and preserving financial flexibility for future growth initiatives. Corporate Group liquidity At 30 June 202 6, the Group’s net debt position was US$11.3 million (30 June 202 5: net cash of US$13.7 million) following an additional US$30.3 million in debt drawn during the financial year to fund the Thailand and Cue acquisitions. Net cash comprises cash and cash equivalent assets held o f US$37.4 million (30 June 202 5: US$39.8 million) offset by the nominal value of borrowings drawn down of US$48.7 million (30 June 2025: US$26.1 million) on the Group’s debt facility. Details of the Group’s debt facilities are set out in Note 16. Dividends The Board has declared a final dividend of AUD 1.0 cents per Ordinary share totalling approximately AUD 17.4 million. This dividend was declared as a Conduit Foreign Income (CFI) unfranked dividend and will be paid on 23 October 2026. During the financial year, the Board also declared an interim dividend of AUD 1.5 cents per Ordinary share totalling approximately AUD 24.4 million. This dividend was declared as a Conduit Foreign Income (CFI) unfranked dividend and was paid on 17 April 2026. Oil Price Hedging The Company maintains leverage to the oil price with a modest hedge position. At the date of this report, hedges were in place for 80,000 bbls of oil covering the period September to December 2026, with a weighted average fixed price of ~US$79/bbl. The Company advises that the majority of the Group’s Mereenie, Palm Valley, Dingo and Sampang gas production is currently sold under fixed price gas contracts so is not materially impacted by near term volatility in commodity prices. 39.8 37.4 47.2 ( 33.1 ) ( 10.6 ) ( 7.4 ) 30.2 ( 25.6 ) ( 3.2 ) Opening cash and cash equivalents at 30 June 2025 Net cash inflows from operating activities Dividends Debt repayments Payments for oil and gas assets Net proceeds from debt facility Payments for Thailand and Cue transactions, net of Cue cash Loan to associate net of repayments Closing cash and cash equivalents at 30 June 2026
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Horizon Oil Annual Report 2026 22 Group business strategies and prospects for future financial years The Company’s exploration, development and production activities are focused in South-East Asia and Australasia. The cash flows from the Company’s production portfolio, will be applied to fund the Company’s future capital and growth program, repay debt, and provide returns to shareholders. The growth program is focussed on enhancing shareholder value by bringing into production the Company’s substantial inventory of contingent and prospective resources in fields in China, New Zealand, Australia, Thailand and Indonesia, whilst keeping an eye on other potential value accretive growth opportunities. The Company has a targeted and selective exploration and development strategy with specific focus on plays providing material scale and upside in and around existing permits with ready access to development infrastructure. The reserves and contingent reso urces in the company’s inventory provide shareholders with exposure to commodity price upside and potential production growth opportunities. The achievement of these strategic objectives may be affected by macro-economic and other risks including, but not limited to, global growth, volatile commodity prices, exchange rates, climate change, access to financing and political risks. The speculative nature of petroleum exploration and development will also impact the Company’s ability to achieve these objectives; key risks of which include production and development risk, exploration and drilling risks, joint operations risk , and geological risk surrounding resources and reserves. The Group has various risk management policies and procedures in place to enable the identification, assessment and mitigation of risks that may arise. Whilst the Group can mitigate some of the risks described above, many are beyond the control of the Group. For further information in relation to the Company’s risk management framework, refer to the Corporate Governance Statement. Outlook In the near term, continued strong operating cashflow generation is forecast with the Group’s overall production enhanced and diversified with the addition of the MH Energy Thailand LLC and Cue Energy Resources Limited acquisitions . Production levels and cashflows from each field are forecast to be impacted by natural reservoir decline with the aim of offsetting this expected decline through further infill drilling and other production enhancing initiatives. These cashflows are expected to enable continued returns to shareholders and funding for further production growth opportunities . The Group’s short-term focus is on: – Continued optimisation of production performance across the 9-asset production portfolio including the committed appraisal and infill wells at Palm Valley and Mahato, workovers at Maari and Block 22/12, booster compressor installation and commissioning at Nam Phong and Sampang and the tie-in of Pad D at Sinphuhorm allowing production from the previously drilled PH-14 and PH-1ST wells; – Maturing further infill drilling and exploration opportunities; and – Continued evaluation of organic and inorganic opportunities. Matters subsequent to the end of the financial year Other than the matters noted above and disclosed in the review of operations, there has not been any matter or circumstance which has arisen since 30 June 2026 that has significantly affected, or may significantly affect: [1] - the Group’s operations in future financial years; or [2] - the results of those operations in future financial years; or [3] - the Group’s state of affairs in future financial years. Environmental regulation The Group is subject to significant environmental regulation in respect of exploration, development and production activities in all countries in which it operates – China, New Zealand, Australia, Thailand and Indonesia. Horizon Oil Limited is committed to undertaking all of its exploration, development and production activities in an environmentally responsible manner. The Directors believe the Group has adequate systems in place for managing its environmental requirements and is not aware of any breach of those environmental requirements as they apply to the Group.
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Horizon Oil Annual Report 2026 23 Group business strategies and prospects for future financial years The Company’s exploration, development and production activities are focused in South-East Asia and Australasia. The cash flows from the Company’s production portfolio, will be applied to fund the Company’s future capital and growth program, repay debt, and provide returns to shareholders. The growth program is focussed on enhancing shareholder value by bringing into production the Company’s substantial inventory of contingent and prospective resources in fields in China, New Zealand, Australia, Thailand and Indonesia, whilst keeping an eye on other potential value accretive growth opportunities. The Company has a targeted and selective exploration and development strategy with specific focus on plays providing material scale and upside in and around existing permits with ready access to development infrastructure. The reserves and contingent reso urces in the company’s inventory provide shareholders with exposure to commodity price upside and potential production growth opportunities. The achievement of these strategic objectives may be affected by macro-economic and other risks including, but not limited to, global growth, volatile commodity prices, exchange rates, climate change, access to financing and political risks. The speculative nature of petroleum exploration and development will also impact the Company’s ability to achieve these objectives; key risks of which include production and development risk, exploration and drilling risks, joint operations risk , and geological risk surrounding resources and reserves. The Group has various risk management policies and procedures in place to enable the identification, assessment and mitigation of risks that may arise. Whilst the Group can mitigate some of the risks described above, many are beyond the control of the Group. For further information in relation to the Company’s risk management framework, refer to the Corporate Governance Statement. Outlook In the near term, continued strong operating cashflow generation is forecast with the Group’s overall production enhanced and diversified with the addition of the MH Energy Thailand LLC and Cue Energy Resources Limited acquisitions . Production levels and cashflows from each field are forecast to be impacted by natural reservoir decline with the aim of offsetting this expected decline through further infill drilling and other production enhancing initiatives. These cashflows are expected to enable continued returns to shareholders and funding for further production growth opportunities . The Group’s short-term focus is on: – Continued optimisation of production performance across the 9-asset production portfolio including the committed appraisal and infill wells at Palm Valley and Mahato, workovers at Maari and Block 22/12, booster compressor installation and commissioning at Nam Phong and Sampang and the tie-in of Pad D at Sinphuhorm allowing production from the previously drilled PH-14 and PH-1ST wells; – Maturing further infill drilling and exploration opportunities; and – Continued evaluation of organic and inorganic opportunities. Matters subsequent to the end of the financial year Other than the matters noted above and disclosed in the review of operations, there has not been any matter or circumstance which has arisen since 30 June 2026 that has significantly affected, or may significantly affect: [1] - the Group’s operations in future financial years; or [2] - the results of those operations in future financial years; or [3] - the Group’s state of affairs in future financial years. Environmental regulation The Group is subject to significant environmental regulation in respect of exploration, development and production activities in all countries in which it operates – China, New Zealand, Australia, Thailand and Indonesia. Horizon Oil Limited is committed to undertaking all of its exploration, development and production activities in an environmentally responsible manner. The Directors believe the Group has adequate systems in place for managing its environmental requirements and is not aware of any breach of those environmental requirements as they apply to the Group. Reporting currency T h e C o m p a n y ’ s a n d t h e G r o u p ’ s f u n c t i o n a l a n d r e p o r t i n g c u r r e n c y i s U n i t e d S t a t e s d o l l a r s . A l l r e f e r e n c e s i n t h i s a n n u a l financial report to “$” or “dollars” are references to United States dollars, unless otherwise stated. Business risks The achievement of Horizon’s business strategy and future financial performance is subject to various risks. Horizon undertakes steps to identify, assess and manage these risks and operates under a Board -approved Group- wide Risk Management Framework. Risk management is addressed in the Company’s Sustainability Report, for the year ended 30 June 2026, which may be accessed from the Company’s website at www.horizonoil.com.au . The material business risks faced by the Group that may have an impact on the operating and financial prospects of the Group as at 30 June 2026 are: Risk description / Potential impacts Mitigating factors 1 Adverse impact to production A loss of production event causes a reduction in cashflow Group has in place Loss of Production insurance over the assets in New Zealand, China, Australia and Thailand. Completion of the acquisition of oil and gas assets in Australia, New Zealand and Indonesia via the acquisition of a controlling interest in Cue Energy Resources Limited diversifies the production base. 2 Major safety and/or environmental event Major safety / environmental incidents leading to reputational damage, potential facilities shutdown imposed by regulators and a loss of business value Oversight of operations with regular site visits and monitoring regulatory audit reports and timely implementation of corrective actions. 3 Market volatility Market driven forces reduce the value of Horizon’s assets and/or reduce the revenue derived from its operations Group has in place a hedging policy to manage short term commodity price fluctuations that could negatively impact cash flows. The Group conducts ongoing cash flow sensitivity analyses to evaluate the effectiveness of existing hedges and to determine the need for additional hedging. Long term fixed price gas contracts at Mereenie, Palm Valley, Dingo and Sampang also aid to protect cash flows. 4 Decommissioning costs exceed estimates Decommissioning costs exceed estimates adversely impacting Group cash flow Group has a diversified production base with strong free cashflow generation to aid in covering decommissioning cost overruns. In addition, the Group has in place adequate liquidity (including working capital) to cover potential financial security requirements associated with decommissioning liabilities. Group reviews the underlying cost estimates on a regular basis. 5 Political / regulatory risk Risk that governments enact onerous legislative changes which has a material impact on the business Completion of the acquisition of oil and gas assets in Australia, New Zealand and Indonesia via the acquisition of a controlling interest in Cue Energy Resources Limited) diversifies the geographies of assets and political exposure.
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Horizon Oil Annual Report 2026 24 Information on Directors & Officers The following persons held office as Directors or Officers of Horizon Oil Limited at the date of this Directors’ Report: Chairman, Independent Non- Executive Director Bruce Clement BEng (Civil) (Hons); BSc (Math & Computer Science); MBA Responsibilities Mr Clement was appointed as Chairman on 20 November 2024. Mr Clement is Chair of Horizon’s Disclosure Committee and a member of Horizon’s Audit and Remuneration and Nomination Committees. Experience and Directorship Mr Clement has over 40 years’ oil and gas experience; beginning his career as a projects engineer at Esso Australia Limited (now Exxon). He has managed exploration, development and production operations in Australia and Asia, as well as successfully delivering key projects in Australia, China, Indonesia, the UK and the USA, including implementation of major acquisitions and d i v e s t m e n t s . M r C l e m e n t h a s l e d A W E L i m i t e d a n d R o c O i l L i m i t e d a s C h i e f Executive Officer and has held senior managerial roles at Santos Limited, Ampolex Limited and Esso Australia Limited (Exxon). M r C l e m e n t i s a n o n-executive director and former interim Chief Executive officer of Beach Energy Limited (ASX:BPT), a non -executive director and Chair of Cue Energy Resources Limited (ASX:CUE) and former director of Norwest Energy Limited, Roc Oil and AWE Limited. Managing Director, Chief Executive Officer Richard Beament BCom, CA Responsibilities Mr Beament has been Managing Director and Chief Executive Officer of Horizon since July 2022. He is a member of Horizon’s Risk Management and Disclosure Committees. Experience Mr Beament has over 15 years of experience in managerial positions within the oil and gas sector. He was formerly Horizon’s Chief Financial Officer from July 2018 to June 2022 and was Company Secretary from September 2021 to June 2022. He joined Horizon as Finance and Commercial Manager in May 2010. Since that time, he was actively engaged in arranging and managing the Group’s funding, as well as managing the Group’s investments in Block 22/12 and Maari. More recently he has led Horizon through its recent growth phase completing the acquisitions of assets in Australia (Mereenie), Thailand (Sinphuhorm and Nam Phong) and the acquisition of a controlling equity interest in Cue Energy Resources Limited (ASX:CUE). Mr Beament is a Chartered Accountant with over 25 years’ experience in accounting and finance across a range of sectors. Prior to joining Horizon in 2010, he held senior positions with PricewaterhouseCoopers in Sydney and London. M r B e a m e n t i s a n o n-executive director of Cue Energy Resources Limited (ASX:CUE) Non-Executive Director Catherine Costello BCom, MSc (Mineral Economics), CA, AGIA, ACIS, GAICD Responsibilities Ms Costello was appointed as a non -executive director on 1 June 2025. Ms Costello is Chair of Horizon’s Audit Committee and a member of Risk Management Committee. Experience and Directorship Ms Costello brings more than 30 years of experience in Australian and multinational businesses in the resources industry, including large ASX -listed and US -listed entities, holding key executive roles responsible for financial management and governance. Sh e has been closely involved in strategic decision making and transformative business and organisational capital structuring processes, leading many corporate transactions. Her board experience includes non-executive director and Audit and Risk Committee chair for Astron Limited (ASX:ATR), executive director roles and providing independent advisory services while chairing board committees.
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Horizon Oil Annual Report 2026 25 Information on Directors & Officers The following persons held office as Directors or Officers of Horizon Oil Limited at the date of this Directors’ Report: Chairman, Independent Non- Executive Director Bruce Clement BEng (Civil) (Hons); BSc (Math & Computer Science); MBA Responsibilities Mr Clement was appointed as Chairman on 20 November 2024. Mr Clement is Chair of Horizon’s Disclosure Committee and a member of Horizon’s Audit and Remuneration and Nomination Committees. Experience and Directorship Mr Clement has over 40 years’ oil and gas experience; beginning his career as a projects engineer at Esso Australia Limited (now Exxon). He has managed exploration, development and production operations in Australia and Asia, as well as successfully delivering key projects in Australia, China, Indonesia, the UK and the USA, including implementation of major acquisitions and d i v e s t m e n t s . M r C l e m e n t h a s l e d A W E L i m i t e d a n d R o c O i l L i m i t e d a s C h i e f Executive Officer and has held senior managerial roles at Santos Limited, Ampolex Limited and Esso Australia Limited (Exxon). M r C l e m e n t i s a n o n-executive director and former interim Chief Executive officer of Beach Energy Limited (ASX:BPT), a non -executive director and Chair of Cue Energy Resources Limited (ASX:CUE) and former director of Norwest Energy Limited, Roc Oil and AWE Limited. Managing Director, Chief Executive Officer Richard Beament BCom, CA Responsibilities Mr Beament has been Managing Director and Chief Executive Officer of Horizon since July 2022. He is a member of Horizon’s Risk Management and Disclosure Committees. Experience Mr Beament has over 15 years of experience in managerial positions within the oil and gas sector. He was formerly Horizon’s Chief Financial Officer from July 2018 to June 2022 and was Company Secretary from September 2021 to June 2022. He joined Horizon as Finance and Commercial Manager in May 2010. Since that time, he was actively engaged in arranging and managing the Group’s funding, as well as managing the Group’s investments in Block 22/12 and Maari. More recently he has led Horizon through its recent growth phase completing the acquisitions of assets in Australia (Mereenie), Thailand (Sinphuhorm and Nam Phong) and the acquisition of a controlling equity interest in Cue Energy Resources Limited (ASX:CUE). Mr Beament is a Chartered Accountant with over 25 years’ experience in accounting and finance across a range of sectors. Prior to joining Horizon in 2010, he held senior positions with PricewaterhouseCoopers in Sydney and London. M r B e a m e n t i s a n o n-executive director of Cue Energy Resources Limited (ASX:CUE) Non-Executive Director Catherine Costello BCom, MSc (Mineral Economics), CA, AGIA, ACIS, GAICD Responsibilities Ms Costello was appointed as a non -executive director on 1 June 2025. Ms Costello is Chair of Horizon’s Audit Committee and a member of Risk Management Committee. Experience and Directorship Ms Costello brings more than 30 years of experience in Australian and multinational businesses in the resources industry, including large ASX -listed and US -listed entities, holding key executive roles responsible for financial management and governance. Sh e has been closely involved in strategic decision making and transformative business and organisational capital structuring processes, leading many corporate transactions. Her board experience includes non-executive director and Audit and Risk Committee chair for Astron Limited (ASX:ATR), executive director roles and providing independent advisory services while chairing board committees. Non-Executive Director Gregory Bittar BEc, LL.B. (Hons); MSc, (LBS) Responsibilities Mr Bittar has been a Director of Horizon since March 2017, as nominated by Horizon’s substantial shareholder IMC Pan Asia Alliance Group. Due to his association with IMC, he is not considered independent. Mr Bittar is Chair of Horizon’s Remuneration and Nomination Committee and a member of Horizon’s Audit Committee. Experience and Directorship Mr Bittar has extensive experience in public and private markets mergers and acquisitions, capital markets and strategic advisory assignments across a range of sectors including general industrials, metals and mining, mining services and energy. Mr Bittar is currently Managing Director of Lotus Resources Limited (ASX:LOT) and was a former Chairman of Brightstar Resources Limited, Trek Metals Limited and Millennium Minerals Limited. Alternate Non-Executive Director Bruno Lorenzson B.E., MBA, CFA Responsibilities Mr Lorenzon has been an Alternate Director for Greg Bittar since March 2017. Experience Mr Lorenzon has worked for the IMC Pan Asia Alliance Group for the past 18 years and has extensive experience in investments, strategy and corporate finance in the resources sector both in Australia and overseas. Mr Lorenzon previously worked for Vale in Brazil and Rio Tinto in Australia in roles encompassing strategic planning, mergers and acquisitions and business development. Non-Executive Director Nigel Burgess B.E., MAcc Responsibilities Mr Burgess was appointed as a non -executive director on 1 July 2021. Mr Burgess is a nominee director of Samuel Terry Asset Management, which manages the Samuel Terry Absolute Return Fund, a substantial shareholder in Horizon. Due to his association with Samuel Terry, he is not considered independent. He is a member of Horizon’s Audit Committee. Experience and Directorship Mr Burgess has over 30 years of commercial experience in funds management with Samuel Terry, Hunter Hall, GIO of Australia and Friends Provident in Australia, and a family office in Europe. He has experience in a variety of commercial transactions and cor porate restructurings across a range of industries and jurisdictions. He is a former director of Spicers Limited (ASX: SRS; de -listed 2019) and Yellow Holdings Limited (New Zealand). Non-Executive Director Dr Peter Goode BAppSc (Math), PhD (Petroleum Engineering) Responsibilities Dr Goode was appointed as non -executive director on 12 September 2024. Dr Goode is Chair of Horizon’s Risk Management Committee. Experience and Directorship Dr Goode has more than 40 years of experience in engineering, manufacturing and oilfield and industrial services. He is currently Chairman and Co-founder of the leading US onshore completions provider, GR Energy Services. He co - founded Global Oilfield Services, a leading US Electric Submersible Pump (ESP) company, which was sold to Haliburton in November 2011. His other professional roles include a number of management positions with Schlumberger between 1985 and 2003 in the US, Indonesia and the UK. These global roles included direct responsibility for the associated research, engineering and manufacturing act ivities. He also has extensive public company experience having been the Managing Director and CEO of Transfield Services between 2009 and 2013, a leading industrial services provider listed on the Australian Stock Exchange. Dr Goode also served as Presi dent and CEO of Vetco International Ltd, an international oilfield services company with revenue of approximately $3 billion per year and with operations in 34 countries. Early in his career he held various reservoir engineering positions at Santos in Australia and SOHIO Petroleum.
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Horizon Oil Annual Report 2026 26 Group Chief Operating Officer Gavin Douglas BSc (Geology) (Hons), MSc (Res. Eval. & Mgmt.), AAPG, SPE Responsibilities Mr Douglas was appointed Chief Operating Officer of Horizon on 1 July 2022, having previously served as the Group General Manager – Production & Exploration. Experience Mr Douglas is a geologist with over 30 years of experience in the exploration, development, and production of hydrocarbons. He has held technical managerial roles for over 15 years, including leading multidisciplinary teams in Australia, Southeast Asia, and the Middle East. Prior to joining Horizon, Mr. Douglas served as Well Delivery Manager at Oil Search and as Subsurface Manager at Eaglewood Energy. Mr Douglas is a non -executive director of Cue Energy Resources Limited (ASX:CUE) Chief Financial Officer / Assistant Company Secretary Kyle Keen BAcc (Hons), CA SAICA Responsibilities Mr Keen has been Horizon’s Chief Financial Officer since 1 July 2022. Mr Keen has been Horizon’s Assistant Company Secretary since November 2018. Experience Mr. Keen is a Chartered Accountant with expertise in financial risk management and financial reporting, particularly within the oil and gas sector. He has been with Horizon Oil Limited for the past eight years, contributing significantly to the company’s financial governance. Mr. Keen brings over 14 years of professional experience, including roles in top- tier accounting firms such as Ernst & Young (EY) in the United Kingdom and KPMG in South Africa. Mr Keen is a non-executive director of Cue Energy Resources Limited (ASX:CUE) Group Tax Manager / Company Secretary Vasilios Margiankakos B.E. Responsibilities Mr Margiankakos has been Horizon’s Group Tax Manager since October 2017. Mr Margiankakos has been Horizon’s Company Secretary since 1 July 2022. Experience Mr Margiankakos has over 20 years’ experience in corporate and international taxation and mergers and acquisitions across a vast number of industries including oil and gas, banking and financial services, infrastructure, media, manufacturing and consumer goods, and technology. Prior to joining Horizon, Vas was Head of Tax at Bravura Solutions Limited and BBC Worldwide Australia (now BBC Studios), prior to which he held a number of senior tax positions at top tier accounting practices such as EY, Deloitte and KPMG.
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Horizon Oil Annual Report 2026 27 Group Chief Operating Officer Gavin Douglas BSc (Geology) (Hons), MSc (Res. Eval. & Mgmt.), AAPG, SPE Responsibilities Mr Douglas was appointed Chief Operating Officer of Horizon on 1 July 2022, having previously served as the Group General Manager – Production & Exploration. Experience Mr Douglas is a geologist with over 30 years of experience in the exploration, development, and production of hydrocarbons. He has held technical managerial roles for over 15 years, including leading multidisciplinary teams in Australia, Southeast Asia, and the Middle East. Prior to joining Horizon, Mr. Douglas served as Well Delivery Manager at Oil Search and as Subsurface Manager at Eaglewood Energy. Mr Douglas is a non -executive director of Cue Energy Resources Limited (ASX:CUE) Chief Financial Officer / Assistant Company Secretary Kyle Keen BAcc (Hons), CA SAICA Responsibilities Mr Keen has been Horizon’s Chief Financial Officer since 1 July 2022. Mr Keen has been Horizon’s Assistant Company Secretary since November 2018. Experience Mr. Keen is a Chartered Accountant with expertise in financial risk management and financial reporting, particularly within the oil and gas sector. He has been with Horizon Oil Limited for the past eight years, contributing significantly to the company’s financial governance. Mr. Keen brings over 14 years of professional experience, including roles in top- tier accounting firms such as Ernst & Young (EY) in the United Kingdom and KPMG in South Africa. Mr Keen is a non-executive director of Cue Energy Resources Limited (ASX:CUE) Group Tax Manager / Company Secretary Vasilios Margiankakos B.E. Responsibilities Mr Margiankakos has been Horizon’s Group Tax Manager since October 2017. Mr Margiankakos has been Horizon’s Company Secretary since 1 July 2022. Experience Mr Margiankakos has over 20 years’ experience in corporate and international taxation and mergers and acquisitions across a vast number of industries including oil and gas, banking and financial services, infrastructure, media, manufacturing and consumer goods, and technology. Prior to joining Horizon, Vas was Head of Tax at Bravura Solutions Limited and BBC Worldwide Australia (now BBC Studios), prior to which he held a number of senior tax positions at top tier accounting practices such as EY, Deloitte and KPMG. Directors’ Interests in the Company’s Securities As at the date of this Directors’ Report, the Directors held the following number of fully paid ordinary shares: DIRECTOR ORDINARY SHARES DIRECT INDIRECT TOTAL B Clement - - - R Beament 7,433,286 6,186,000 13,619,286 C Costello - - - G Bittar 1,000,000 - 1,000,000 N Burgess1 - 314,212,423 314,212,423 P Goode - - - B Lorenzon (as alternate) - - - 1 Mr Burgess is a Director of Samuel Terry Asset Management Pty Ltd, the Trustee and Investment Manager of Samuel Terry Absolute Return Fund which holds the 314,212,423 shares. Meetings of Directors The numbers of meetings of the Company’s Board of Directors (the ‘Board’) and of each Board Committee held during the financial year, and the numbers of meetings attended by each Director were: BOARD AUDIT COMMITTEE RISK MANAGEMENT COMMITTEE REMUNERATION & NOMINATION COMMITTEE DISCLOSURE COMMITTEE Number of meetings held: 10 3 2 2 2 Number of meetings attended by: B Clement1 10 3 2 2 2 R Beament 10 3 2 2 2 C Costello2 10 3 2 1 - G Bittar1 8 3 1 1 - N Burgess1,2 10 2 2 2 - P Goode3 10 1 2 2 - S Birkensleigh4 1 1 1 1 - B Lorenzon (as alternate) - - - - - 1 Mr Clement, Mr Bittar and Mr Burgess attended risk management committee meetings in their capacity as Non-Executive Directors of Horizon Oil Limited and are not members of the risk management committee. 2 Ms Costello and Mr Burgess attended remuneration & nomination committee meetings in their capacity as Non-Executive Directors of Horizon Oil Limited and are not members of the remuneration & nomination committee. 3 Mr Goode attended an audit committee meeting in his capacity as Non-Executive Director of Horizon Oil Limited and is not a member of the audit committee. 4 Ms Birkensleigh was a non-executive director until her retirement on 29 August 2025. She attended remuneration & nomination committee meeting in her capacity as Non-Executive Directors of Horizon Oil Limited and was not a member of the remuneration & nomination committee
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Horizon Oil Annual Report 2026 28 Corporate Governance The Company and the Board are committed to achieving and demonstrating the highest standards of corporate governance. The Board continues to review the Company’s governance framework and practices to ensure they meet the interests of shareholders. The Corporate Governance Statement was approved by the Board on 27 August 2026. The Company’s Corporate Governance Statement for the year ended 30 June 2026 may be accessed from the Company’s website at www.horizonoil.com.au. A description of the Company’s main corporate governance practices is set out in the Corporate Governance Statement. All these practices, unless otherwise stated, were in place for the full financial year and comply with the ASX Corporate Governance Co uncil’s revised Corporate Governance Principles and Recommendations 4 th edition, released in 2019. Sustainability Reporting Sustainability continues to be an important focus for Horizon with progress made during the current financial year on Horizon’s Environmental Social and Governance (ESG) Action Plan. The Sustainability Report was approved by the Board on 27 August 2026. T h e C o m p a n y ’ s S u s t a i n a b i l i t y R e p o r t f o r t h e y e a r e n d e d 3 0 J u n e 2 0 2 6 m a y b e a c c e s s e d f r o m t h e C o m p a n y ’ s w e b s i t e a t www.horizonoil.com.au. Horizon continues to monitor Australia’s climate -related financial disclosure framework following the enactment of the Climate-related Financial Disclosures Reporting Legislation Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024 , w h i c h r e ce i v e d R o y a l A ss ent i n S e p te m be r 2 0 24 . T h e Au s t r a l i a n A c c o un t i n g St a n d ar d s B o a r d (AASB) has introduced sustainability reporting standards aligned with international frameworks, effective for Group 1 entities from January 2025. As a Group 3 repo rting entity, Horizon’s mandatory compliance will commence for the reporting period beginning 1 July 2027. Horizon is actively preparing for this upcoming requirement and will assess any implications for future disclosures as further guidance is issued.
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Horizon Oil Annual Report 2026 29 Corporate Governance The Company and the Board are committed to achieving and demonstrating the highest standards of corporate governance. The Board continues to review the Company’s governance framework and practices to ensure they meet the interests of shareholders. The Corporate Governance Statement was approved by the Board on 27 August 2026. The Company’s Corporate Governance Statement for the year ended 30 June 2026 may be accessed from the Company’s website at www.horizonoil.com.au. A description of the Company’s main corporate governance practices is set out in the Corporate Governance Statement. All these practices, unless otherwise stated, were in place for the full financial year and comply with the ASX Corporate Governance Co uncil’s revised Corporate Governance Principles and Recommendations 4 th edition, released in 2019. Sustainability Reporting Sustainability continues to be an important focus for Horizon with progress made during the current financial year on Horizon’s Environmental Social and Governance (ESG) Action Plan. The Sustainability Report was approved by the Board on 27 August 2026. T h e C o m p a n y ’ s S u s t a i n a b i l i t y R e p o r t f o r t h e y e a r e n d e d 3 0 J u n e 2 0 2 6 m a y b e a c c e s s e d f r o m t h e C o m p a n y ’ s w e b s i t e a t www.horizonoil.com.au. Horizon continues to monitor Australia’s climate -related financial disclosure framework following the enactment of the Climate-related Financial Disclosures Reporting Legislation Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Act 2024 , w h i c h r e ce i v e d R o y a l A ss ent i n S e p te m be r 2 0 24 . T h e Au s t r a l i a n A c c o un t i n g St a n d ar d s B o a r d (AASB) has introduced sustainability reporting standards aligned with international frameworks, effective for Group 1 entities from January 2025. As a Group 3 repo rting entity, Horizon’s mandatory compliance will commence for the reporting period beginning 1 July 2027. Horizon is actively preparing for this upcoming requirement and will assess any implications for future disclosures as further guidance is issued. Remuneration Report This Remuneration Report (Report) outlines the remuneration arrangements for the Directors and Key Management Pe r s o nn e l ( K M P) o f t h e C o mp a n y f o r t h e f in a n c i a l y e a r e n d e d 30 J u ne 2 0 2 6 . T h e R e m un e r at i o n R e p o rt f o r 3 0 Ju n e 2 0 25 received 84% approval at the 2 0 2 5 A n n u a l G e n e r a l M e e t i n g h e l d o n 1 9 N o v e m b e r 2 0 2 5 . T h i s R e p o r t f o r m s p a r t o f t h e Directors’ Report and has been audited in accordance with section 308(3)(c) of the Corporations Act 2001. The Report is structured as follows: [1] - Individuals covered by the Remuneration Report [2] - Executive remuneration framework [3] - Contractual arrangements for executives [4] - Group performance and financial year remuneration outcomes [5] - Non-executive Director remuneration [6] - Statutory and share-based reporting (1) Individuals Covered by the Remuneration Report The Group is required to prepare a Report in respect of KMP, those persons who have the authority and responsibility for planning, directing, and controlling the activities of the Company and the Group, either directly or indirectly, being: - Directors; and - Other Key Management Personnel The table below outlines the KMP movements during the financial year: NAME TITLE PERIOD AS KMP DIRECTORS Bruce Clement Director (non-executive) / Chairman Full financial year Richard Beament Managing Director / Chief Executive Officer Full financial year Catherine Costello Director (non-executive) Full financial year Greg Bittar Director (non-executive) Full financial year Nigel Burgess Director (non-executive) Full financial year Peter Goode Director (non-executive) Full financial year Sandra Birkensleigh1 Director (non-executive) Until 25 August 2025 Bruno Lorenzon Alternate Director (non-executive) Full financial year OTHER KMP (EXECUTIVES) Gavin Douglas Group Chief Operating Officer Full financial year Kyle Keen Chief Financial Officer / Assistant Company Secretary Full financial year 1 Ms Birkensleigh was a non-executive director until her retirement on 25 August 2025. (2) Executive Remuneration Framework [2.1] - How does Horizon determine remuneration outcomes? The objective of the Group’s remuneration framework is to provide reward for performance that is competitive and appropriate for the results delivered. The Board, through its Remuneration and Nomination Committee, continues to review KMP remuneration arra ngements to ensure they align with the Group’s operations and strategic objectives. The remuneration framework for executives is based on the following principles for guiding the Group’s decisions regarding executive remuneration.
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Horizon Oil Annual Report 2026 30 - Governance principles: – competitiveness and reasonableness; – performance linkage / alignment of executive compensation; and – transparency. - Shareholders’ interests: – focuses on sustained growth in shareholder value; – attracts and retains high calibre executives capable of managing the Group’s diverse international operations; and – capital management. - Executive’s interests: – rewards capability, experience and performance; – reflects competitive reward for contribution to growth in shareholder wealth; – provides a clear structure for earning rewards; and – provides recognition for contribution. [2.2] - Remuneration policy and link to performance The remuneration framework is designed to recognise and incentivise performance during the financial year (Total Fixed Remuneration (TFR) and Short-Term Incentives ( STIs)) and drive sustained shareholder value (Long- Term Incentives (LTIs)). Executive remuneration is comprised of fixed remuneration and variable remuneration (“at risk”, STIs and LTIs). The graph below sets out the mix of total annual fixed remuneration and the maximum variable remuneration in the form of STI’s. The Board considers and where appropriate awards LTI’s and accordingly have no fixed percentage relative to the executives total fixed remuneration (TFR). The mix of Total fixed remuneration and Short-term incentives for the financial year is shown in the table below with percentages rounded to the nearest whole number. During the financial period, no LTI’s were granted to the executives listed below. The LTI performance criteria for LTI’s awarded in the prior period is contained in section 2.3 with the terms of the issuance contained in table 6.6. Chief Executive Officer - Richard Beament Total Fixed Remuneration (TFR) 50% Maximum STI 50% Chief Operating Officer - Gavin Douglas Total Fixed Remuneration (TFR) 55% Maximum STI 45% Chief Financial Officer / Assistant Company Secretary - Kyle Keen Total Fixed Remuneration (TFR) 62% Maximum STI 38% Performance Based
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Horizon Oil Annual Report 2026 31 - Governance principles: – competitiveness and reasonableness; – performance linkage / alignment of executive compensation; and – transparency. - Shareholders’ interests: – focuses on sustained growth in shareholder value; – attracts and retains high calibre executives capable of managing the Group’s diverse international operations; and – capital management. - Executive’s interests: – rewards capability, experience and performance; – reflects competitive reward for contribution to growth in shareholder wealth; – provides a clear structure for earning rewards; and – provides recognition for contribution. [2.2] - Remuneration policy and link to performance The remuneration framework is designed to recognise and incentivise performance during the financial year (Total Fixed Remuneration (TFR) and Short-Term Incentives ( STIs)) and drive sustained shareholder value (Long- Term Incentives (LTIs)). Executive remuneration is comprised of fixed remuneration and variable remuneration (“at risk”, STIs and LTIs). The graph below sets out the mix of total annual fixed remuneration and the maximum variable remuneration in the form of STI’s. The Board considers and where appropriate awards LTI’s and accordingly have no fixed percentage relative to the executives total fixed remuneration (TFR). The mix of Total fixed remuneration and Short-term incentives for the financial year is shown in the table below with percentages rounded to the nearest whole number. During the financial period, no LTI’s were granted to the executives listed below. The LTI performance criteria for LTI’s awarded in the prior period is contained in section 2.3 with the terms of the issuance contained in table 6.6. Chief Executive Officer - Richard Beament Total Fixed Remuneration (TFR) 50% Maximum STI 50% Chief Operating Officer - Gavin Douglas Total Fixed Remuneration (TFR) 55% Maximum STI 45% Chief Financial Officer / Assistant Company Secretary - Kyle Keen Total Fixed Remuneration (TFR) 62% Maximum STI 38% Performance Based [2.3] - Elements of remuneration TOTAL FIXED REMUNERATION (TFR) What is Total Fixed Remuneration (TFR)? Total Fixed Remuneration (TFR ) is base salary plus superannuation. Non -monetary benefits are excluded from TFR but include benefits such as car parking, insurances and other expenses inclusive of fringe benefits tax. Executive remuneration (which is set and paid in Australian Dollars (A$)) and other terms of employment are reviewed annually by the Remuneration and Nomination Committee having regard to relevant comparative information. Link to strategy and performance Competitive TFR is paid to ensure that the Group can attract and retain suitable executives to deliver the strategic goals. Fixed Remuneration is reviewed annually by the Remuneration and Nomination Committee considering market data, scope of the Executiv e’s role, expected skill, experience and qualification and individual performance. SHORT-TERM INCENTIVE (STI) – (‘at-risk’) Objective The STI provides all Executives with an opportunity to earn an annual incentive which is paid in a combination of cash and deferred equity in the first quarter of the new financial year. The deferred equity element is 50% of the total STI awarded with the residual paid in cash. The STI award is determined by the Board following the end of the financial year having regard to Group performance over the financial year. How is the STI linked to performance? The STI is designed to motivate and reward Executives for contributing to the delivery of annual business performance. Key Performance Indicators (KPIs) are determined each financial year and approved by the Board. The Company’s performance against these KPIs is reviewed annually. How is performance measured for the STI? Awards are made annually with performance measured over the twelve months to 30 June and are aligned to the attainment of the Company’s Board approved KPIs for the relevant year. Awards under the plan are determined and paid in a combination of cash and deferred equity in the first quarter of the new financial year. The deferred equity element is subject to the specific terms of the executive’s employment agreement. Actual performance against financial, non -financial and individual measures is assessed a t the end of the financial year. In assessing the achievement of measures, the Remuneration and Nomination Committee may exercise its discretion to adjust outcomes for significant factors outside the control of management that contribute positively or negatively to results. STI opportunity Up to 100% of the Chief Executive Officer’s TFR, up to 80% of the Chief Operating Officer’s TFR and up to 60% of the Chief Financial Officer’s TFR. 50% of each executive’s STI award will be granted in the form of deferred equity rights with the residual STI paid in cash. Deferring a proportion of the STI outcome into rights to Shares creates further alignment between the interests of shareholders and extends the focus beyond the short term. How is STI deferred equity granted? Any deferred component of STI awarded in relation to a financial year (Performance Year) will be delivered in the form of rights to acquire fully paid ordinary shares in the Company ('Shares') for nil consideration ('Deferred STI Rights'). How is the number of Deferred STI Rights determined? The number of Deferred STI Rights granted in relation to any Performance Year will be determined by dividing the cash amount of the STI to be deferred by the volume weighted average price ('VWAP') of Shares for the final 10 trading days of the Performance Year (usually 10 trading days up to 30 June). What are the performance conditions on the Deferred STI Rights? Deferred STI Rights are designed to reward past performance and encourage retention. Once granted, no further performance conditions will attach to Deferred STI Rights other than the employee remaining in the Company's employment at the time of vesting. Distribution and capital reorganisation The number of Deferred STI Rights will be adjusted in the event of reorganisation of capital and a participant will be entitled to receive a distribution equivalent payment in the form of additional Deferred STI Rights to the value of dividends the participant would have received during the deferral period. Deferred STI rights will not attract dividend and voting rights.
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Horizon Oil Annual Report 2026 32 SHORT-TERM INCENTIVE (STI) – (‘at-risk’) When and how do Deferred STI Rights vest? Deferred STI Rights will vest (subject to Board discretion and satisfaction of any applicable condition) 100% after 12 months from the end of the financial period for which they were awarded. Vesting periods will generally commence on 1 July of the year i n which the Deferred STI Rights are granted. The Board may satisfy any Deferred STI Rights that vest by procuring that Shares are purchased on market and transferred or issue new Shares in the Company. Clawback and Board discretion in relation to STI Rights The Board retains a broad discretion to: • allow for accelerated vesting in special circumstances (e.g., death and incapacity, change of control event); • determine that some or all unvested Deferred STI Rights will lapse if any situation arises that, in the Board’s view should impact the assessment of performance. Such situations may include material misrepresentations and material misstatements in the Company's accounts; and • determine that any Deferred STI Rights that vest are settled in cash not Shares (subject to any ASX Listing Rule or Corporations Act requirements). LTI PLAN (PERFORMANCE RIGHTS) – (‘at-risk’) How is the LTI linked to performance? The LTI Plan for Performance Rights applies to LTI’s issued on and after 1 July 2022. The objective of the Performance Rights granted pursuant to the LTIP is to create a stronger link between eligible employees’ performance and reward for increasing share holder value. The LTI Plan forms part of the Company’s performance-based remuneration system and provides “at risk” incentives based on longer term Company performance. Offer to participate in the Plan and consideration The Board may from time to time make offers (each a Plan Offer) to an ‘Eligible Person’ (being, any person who is an employee (including in full-time or permanent part-time employment) or a director of, or a person who provides services to, the Company or its related bodies corporate, or any other person so designated by the Board) to participate in the Plan and receive a right to be allocated a fully paid ordinary share in the Company (Share), subject to the rules of the Plan (Share Right). A Plan Offer may be subject to such restrictions and conditions as the Board determines in its absolute discretion (including, in relation to the applicable expiry date, exercise period and performance criteria). Unless otherwise stated in the Plan Offer, a participant in the Plan (Participant ) is not required to pay for a grant of Share Rights or the allocation of Shares under a Plan Offer. Participation in the Plan does not give the Participant a legal or beneficial interest in a Share prior to its allocation to the Participant, nor any entitlement to a Share, otherwise than in accordance with the Plan Offer and the rules of the Plan. Grant of Share Rights As soon as reasonably practicable following receipt by the Company of an Eligible Person’s acceptance of a Plan Offer, the Company will, provided that the relevant person continues to be an Eligible Person, issue to the person the number of Share Rights the subject of the accepted Plan Offer. Share Rights will not give a Participant any right to dividends or give a Participant a right to vote. However, Shares issued, transferred or allocated (as applicable) upon a relevant Participant exercising their vested Share Rights will convey the same rights to dividends and voting as Shares in the same class. Term of Share Rights Subject to the terms of the Plan (including in relation to circumstances relating to cessation of employment), the ‘Last Exercise Date‘ (being, the latest date on which a Share Right may be exercised if the Share Right vests) and ‘Plan Acceptance Date‘ (being, the latest date on which the Company must receive a completed plan acceptance form from a relevant Participant), are determined by the Board in respect of each grant of Share Rights. The Share Rights granted have an expiry date no longer than 5 years. Performance criteria applicable to Share Rights The Board has discretion to prescribe the conditions which must be satisfied or waived before a particular grant of Share Rights vests and becomes exercisable by the relevant Participant. A Share Right may only be exercised if it is a vested Share Right and it has not lapsed in accordance with the terms of the Plan. Exercise price on vested Share Rights The Board may determine whether any exercise price must be paid by the participant on the exercise of vested Share Rights. Allocation of Shares If a relevant Participant opts to exercise vested Share Rights, the Company will allocate to the Participant the number of Shares to which the Participant is entitled by either (or a combination of) issuing new Shares to the Participant or procuring the transfer of Shares acquired on market to the Participant. Cessation of employment In the case of any “Uncontrollable Events” (including death, permanent disablement, retirement, retrenchment, or such other circumstances which result in the Participant leaving the employment of the
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Horizon Oil Annual Report 2026 33 SHORT-TERM INCENTIVE (STI) – (‘at-risk’) When and how do Deferred STI Rights vest? Deferred STI Rights will vest (subject to Board discretion and satisfaction of any applicable condition) 100% after 12 months from the end of the financial period for which they were awarded. Vesting periods will generally commence on 1 July of the year i n which the Deferred STI Rights are granted. The Board may satisfy any Deferred STI Rights that vest by procuring that Shares are purchased on market and transferred or issue new Shares in the Company. Clawback and Board discretion in relation to STI Rights The Board retains a broad discretion to: • allow for accelerated vesting in special circumstances (e.g., death and incapacity, change of control event); • determine that some or all unvested Deferred STI Rights will lapse if any situation arises that, in the Board’s view should impact the assessment of performance. Such situations may include material misrepresentations and material misstatements in the Company's accounts; and • determine that any Deferred STI Rights that vest are settled in cash not Shares (subject to any ASX Listing Rule or Corporations Act requirements). LTI PLAN (PERFORMANCE RIGHTS) – (‘at-risk’) How is the LTI linked to performance? The LTI Plan for Performance Rights applies to LTI’s issued on and after 1 July 2022. The objective of the Performance Rights granted pursuant to the LTIP is to create a stronger link between eligible employees’ performance and reward for increasing share holder value. The LTI Plan forms part of the Company’s performance-based remuneration system and provides “at risk” incentives based on longer term Company performance. Offer to participate in the Plan and consideration The Board may from time to time make offers (each a Plan Offer) to an ‘Eligible Person’ (being, any person who is an employee (including in full-time or permanent part-time employment) or a director of, or a person who provides services to, the Company or its related bodies corporate, or any other person so designated by the Board) to participate in the Plan and receive a right to be allocated a fully paid ordinary share in the Company (Share), subject to the rules of the Plan (Share Right). A Plan Offer may be subject to such restrictions and conditions as the Board determines in its absolute discretion (including, in relation to the applicable expiry date, exercise period and performance criteria). Unless otherwise stated in the Plan Offer, a participant in the Plan (Participant ) is not required to pay for a grant of Share Rights or the allocation of Shares under a Plan Offer. Participation in the Plan does not give the Participant a legal or beneficial interest in a Share prior to its allocation to the Participant, nor any entitlement to a Share, otherwise than in accordance with the Plan Offer and the rules of the Plan. Grant of Share Rights As soon as reasonably practicable following receipt by the Company of an Eligible Person’s acceptance of a Plan Offer, the Company will, provided that the relevant person continues to be an Eligible Person, issue to the person the number of Share Rights the subject of the accepted Plan Offer. Share Rights will not give a Participant any right to dividends or give a Participant a right to vote. However, Shares issued, transferred or allocated (as applicable) upon a relevant Participant exercising their vested Share Rights will convey the same rights to dividends and voting as Shares in the same class. Term of Share Rights Subject to the terms of the Plan (including in relation to circumstances relating to cessation of employment), the ‘Last Exercise Date‘ (being, the latest date on which a Share Right may be exercised if the Share Right vests) and ‘Plan Acceptance Date‘ (being, the latest date on which the Company must receive a completed plan acceptance form from a relevant Participant), are determined by the Board in respect of each grant of Share Rights. The Share Rights granted have an expiry date no longer than 5 years. Performance criteria applicable to Share Rights The Board has discretion to prescribe the conditions which must be satisfied or waived before a particular grant of Share Rights vests and becomes exercisable by the relevant Participant. A Share Right may only be exercised if it is a vested Share Right and it has not lapsed in accordance with the terms of the Plan. Exercise price on vested Share Rights The Board may determine whether any exercise price must be paid by the participant on the exercise of vested Share Rights. Allocation of Shares If a relevant Participant opts to exercise vested Share Rights, the Company will allocate to the Participant the number of Shares to which the Participant is entitled by either (or a combination of) issuing new Shares to the Participant or procuring the transfer of Shares acquired on market to the Participant. Cessation of employment In the case of any “Uncontrollable Events” (including death, permanent disablement, retirement, retrenchment, or such other circumstances which result in the Participant leaving the employment of the Company or any of its related bodies corporate and which the Board determines is an uncontrollable event) resulting in a Participant’s cessation of employment, the Board may determine that any unvested Share Rights either lapse or become vested Share Rights. If the Participant ceases employment other than because of an Uncontrollable Event, all of the Participant‘s unvested Share Rights will automatically lapse. Lapse of Share Rights Share Rights may lapse in other circumstances, including where the applicable performance criteria are not wholly satisfied by the time specified in the Plan Offer (unless otherwise specified in the Plan Offer), or where the Participant commits any act of fraud, defalcation or gross misconduct in relation to the Company’s, or any of its related bodies corporate’s affairs. Change of control If a Change of Control Event occurs, or the Board determines in its absolute discretion that a Change of Control Event is likely to occur, subject to the performance criteria applicable to unvested Share Rights, the Board will determine the appropriate tre atment regarding any unvested Share Rights, which may include waiving the relevant performance criteria, replacing unvested Share Rights with rights to Shares in a new controlling entity, or causing the unvested Share Rights to lapse. Reorganisation of capital, rights issue, Dividends or other such event Upon any re-organisation of the issued ordinary capital of the Company, the number of Share Rights, or the number of Shares allocated on the exercise of the Share Rights, or both will be reconstructed or adjusted to the extent necessary to comply with, and in accordance with, the ASX Listing Rules applying to a re - organisation of capital at the time of the reorganisation (as their application in the circumstances is affected by any waiver granted by ASX). Key terms of the Share Rights issued The tables below set out the material terms of Share Rights issued under the LTIP. Share price hurdle Each tranche of Share Rights vests independently of each other tranche of Share Rights. The Share Price Hurdles are subject to the following adjustments: • the relevant Share Price Hurdle will be decreased by an amount determined by the Board (in its absolute discretion) to account for any dividends or return of capital; and • the relevant Share Price Hurdle will be increased or decreased (as applicable) by an amount determined by the Board (in its absolute discretion) to account for any share consolidation or other re-organisation of capital of the Company. Performance Criteria Each tranche of Share Rights will vest on the first and any relevant subsequent date following grant date upon satisfaction of all of the following conditions: • the price per share meets or exceeds the relevant Share Price Hurdle at the close of trade (each occurrence being a Relevant Gateway Date); • on the date that is one year after each Relevant Gateway Date, the volume weighted average price of the shares on the ASX for the preceding 1-month period meets or exceeds the relevant Share Price Hurdle at close of trading; • shares traded in the twelve-month period from a Relevant Gateway Date at or above the relevant Share Price Hurdle are required to have a cumulative market value of A$25,000,000 or more; • despite the hurdles above being achieved, there is also a time hurdle where only one third of the rights are able to vest after 24 months, and the remaining rights are only able to vest after 36 months; and • the recipient must remain an employee of the Company on the vesting date. Accordingly, the Share Rights granted in respect of each Tranche may be tested in relation to more than one period (i.e. in respect of successive Relevant Gateway Dates) and, subject to the terms of the Plan and the Plan Offer, will vest in their entirety on the earliest date on which all of the vesting conditions noted above are satisfied. Share Right exercise price Nil for all Share Rights on issue on 30 June 2026. Expiry of exercise period If a Share Right vests, then the Share Right may be exercised at any time up to the date which is the earlier of: • three years after the Share Right vested; and • t h e d a t e o n w h i c h a C h a n g e o f C o n t r o l E v e n t o c c u r s o r t h e d a t e o n w h i c h t h e B o a r d m a k e s a determination that a Change of Control Event is likely to occur.
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Horizon Oil Annual Report 2026 34 [2.4] - Associated policies The Group has adopted several policies to support remuneration framework and governance, including the Securities Trading Policy, Continuous Disclosure Policy and the Corporate Code of Conduct. These policies are available on the Group’s website www.horizonoil.com.au. (3) Contractual Arrangements for Executives Remuneration and other terms of employment for the Executives are formalised in employment contracts. The key terms of the contractual arrangements for the CEO are summarised below: COMPONENT CONTRACT TERM EXPIRY DATE NOTICE PERIOD (EMPLOYEE) NOTICE PERIOD (GROUP) Chief Executive Officer Richard Beament Ongoing basis No expiration date 6 months 6 months Termination of employment (without cause) Payment of termination benefit on termination without cause by the Company equal to 6 months remuneration. Pro-rata STI award based on Board’s reasonable assessment of Mr Beament’s performance and period of employment during that STI year. Entitlement to any previously granted LTIP or deferred STI award to be dealt with in accordance with LTIP rules and the terms of offer. Termination of employment (with cause) STI not awarded. B o a r d h a s d i s c r e t i o n t o l a p s e a l l P e r f o r m a n c e R i g h t s a n d D e f e r r e d S T I Rights. The key terms of the contractual arrangements for the other Executive KMPs are summarised below: COMPONENT CONTRACT TERM EXPIRY DATE NOTICE PERIOD (EMPLOYEE) NOTICE PERIOD (GROUP) Other Executives Ongoing basis No expiration date 3 months COO – 6 months CFO – 3 months Termination of employment (without cause) Payment of termination benefit on termination without cause by the Company, equal to 6 months remuneration. Pro rata STI award based on Board’s reasonable assessment of the executive’s performance and period of employment during that STI year. Entitlement to any previously granted LTIP or deferred STI award to be dealt with in accordance with LTIP rules and the terms of offer. Termination of employment (with cause) STI not awarded Board has discretion to lapse all Performance Rights and Deferred STI Rights
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Horizon Oil Annual Report 2026 35 [2.4] - Associated policies The Group has adopted several policies to support remuneration framework and governance, including the Securities Trading Policy, Continuous Disclosure Policy and the Corporate Code of Conduct. These policies are available on the Group’s website www.horizonoil.com.au. (3) Contractual Arrangements for Executives Remuneration and other terms of employment for the Executives are formalised in employment contracts. The key terms of the contractual arrangements for the CEO are summarised below: COMPONENT CONTRACT TERM EXPIRY DATE NOTICE PERIOD (EMPLOYEE) NOTICE PERIOD (GROUP) Chief Executive Officer Richard Beament Ongoing basis No expiration date 6 months 6 months Termination of employment (without cause) Payment of termination benefit on termination without cause by the Company equal to 6 months remuneration. Pro-rata STI award based on Board’s reasonable assessment of Mr Beament’s performance and period of employment during that STI year. Entitlement to any previously granted LTIP or deferred STI award to be dealt with in accordance with LTIP rules and the terms of offer. Termination of employment (with cause) STI not awarded. B o a r d h a s d i s c r e t i o n t o l a p s e a l l P e r f o r m a n c e R i g h t s a n d D e f e r r e d S T I Rights. The key terms of the contractual arrangements for the other Executive KMPs are summarised below: COMPONENT CONTRACT TERM EXPIRY DATE NOTICE PERIOD (EMPLOYEE) NOTICE PERIOD (GROUP) Other Executives Ongoing basis No expiration date 3 months COO – 6 months CFO – 3 months Termination of employment (without cause) Payment of termination benefit on termination without cause by the Company, equal to 6 months remuneration. Pro rata STI award based on Board’s reasonable assessment of the executive’s performance and period of employment during that STI year. Entitlement to any previously granted LTIP or deferred STI award to be dealt with in accordance with LTIP rules and the terms of offer. Termination of employment (with cause) STI not awarded Board has discretion to lapse all Performance Rights and Deferred STI Rights (4) Group Performance and Financial Year Remuneration Outcomes [4.1] - Overview of Horizon performance The Board aligns remuneration and performance by using ‘at risk’ remuneration, including STI’s and LTI’s. Award of STIs is dependent on overall company performance and the vesting of LTIs occurs on the fulfilment of absolute Horizon Total Shareholder Return (TSR) targets. Vesting of Performance Rights are based on the performance criteria as outlined in section 2.3. Horizon share price performance for the current and previous five financial years is displayed in the chart below. During th e 2026 Financial Year, the Horizon share price increased 2.6%, which when combined with the 15.4% distribution yield (aggregate of AUD 3.0 cents per share), results in a TSR of 18% for the financial year or approximately A$57 million dollars of value for shareholders. Horizon’s share price closed at AUD 0.20 per ordinary share on 30 June 2026 (AUD 0.195 per ordinary share on 30 June 2025). The table below sets out information regarding the Group’s performance over the last five years as required by the Corporations Act. FY26 FY25 FY24 FY23 FY22 Profit before tax (US$’000) 5,875 16,653 39,185 56,989 42,739 EBITDAX (US$’000) 56,404 54,772 71,451 103,525 73,008 Net (debt) / cash (US$’000) (11,283) 13,673 26,166 35,652 42,849 Capital Return (A$ cents per share)1 - - - - 1.35 Dividend (A$ cents per share)1 2.5 3.0 3.0 3.5 1.65 Production (mmboe) 2.15 1.62 1.43 1.92 1.33 2P Reserves (mmboe) 13.6 9.0 9.9 4.9 5.8 1 Capital Returns and Dividends are declared and approved for the respective financial year shown and may be paid during the subsequent financial year.
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Horizon Oil Annual Report 2026 36 [4.2] - Performance against STI measures for the financial year The Executive’s STI opportunity is calculated with reference to achievement of KPI targets based on a weighted scorecard approach. The following table sets out the performance conditions for the STI and their rationale for the financial year. KEY FOCUS AREA OBJECTIVE AND MEASUREMENT RATIONALE STATUS FINANCIAL Financial Metrics & Profitability Achievement of budgeted revenue, operating costs and cashflow across the Block 22/12, Maari/Manaia and Mereenie fields Maintain average Group operating costs and maintain low corporate general and administrative expenditure Maintain and enhance operating income streams Maximise profitability and cashflow Effective cost control Achieved Achieved OPERATIONAL Production Optimisation Achieve budgeted production Maximise profitability and cashflow Achieved BUSINESS DEVELOPMENT Organic growth and inorganic growth Focus on organic growth opportunities resulting in reserve additions Ensure sustainability of the business and cashflow whilst creating value for shareholders Exceed SAFETY HSSE Achievement of TRIFR below NOPSEMA industry average across Horizon’s assets Promote safe operations with a safe workplace for employees Achieved PEOPLE, CULTURE & SUSTAINABILITY People & Culture Sustainability Attracting the right skills and retaining key staff Deliver on requirements of Horizon’s sustainability roadmap, with enhanced reporting in accordance with TCFD guidelines Ensure Company has the necessary resources to achieve strategic objectives Sustainability awareness; make the right kind of impact Exceed Achieved Based on the KPI scorecard approved by the Board in respect of the financial year, Executives were eligible for a possible STI a w a r d e q u a l t o 1 0 0 % o f t h e i r t o t a l S T I o p p o r t u n i t y d u e t o t h e o u t s t a n d i n g c o m p a n y p e r f o r m a n c e d u r i n g t h e y e a r . I n determining the final STI award for executives for FY26, the Board have decided to allocate 20% of the FY26 STI opportunity to FY27 and this will be measured against the integration of the Cue acquisition. Accordingly, FY27 will have a possible STI award equal to 120% of the executive’s total STI opportunity. The significant effort applied by staff and executives was considered in determining the final STI award. The table below shows the STIs awarded during the financial year: EXECUTIVE TOTAL OPPORTUNITY US$1 % OF FIXED REMUNERATION % AWARDED % FORFEITED R Beament 434,911 100% 75% 25% G Douglas 289,940 80% 75% 25% K Keen 152,492 60% 75% 25% 1 The STI opportunity is calculated by translating the Executives Australian Dollar denominated TFR to United States Dollars at the prevailing spot rate on 30 June 2026. STI’s awarded are settled in a combination of cash and deferred STI rights, refer to section 2.3. [4.3] - Performance against LTI measures for the financial year Horizon’s share price performance for the current and previous four financial years is displayed in the chart under section 4.1 of this Report. LTI awarded in respect of FY26 No Performance Rights were awarded or issued during the financial period. Awards vesting in FY26 During the period Tranches A1, B1 and C1 of KMP’s Performance Rights vested. These vested tranches represent one third of all Performance Rights held by KMP’s.
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Horizon Oil Annual Report 2026 37 [4.2] - Performance against STI measures for the financial year The Executive’s STI opportunity is calculated with reference to achievement of KPI targets based on a weighted scorecard approach. The following table sets out the performance conditions for the STI and their rationale for the financial year. KEY FOCUS AREA OBJECTIVE AND MEASUREMENT RATIONALE STATUS FINANCIAL Financial Metrics & Profitability Achievement of budgeted revenue, operating costs and cashflow across the Block 22/12, Maari/Manaia and Mereenie fields Maintain average Group operating costs and maintain low corporate general and administrative expenditure Maintain and enhance operating income streams Maximise profitability and cashflow Effective cost control Achieved Achieved OPERATIONAL Production Optimisation Achieve budgeted production Maximise profitability and cashflow Achieved BUSINESS DEVELOPMENT Organic growth and inorganic growth Focus on organic growth opportunities resulting in reserve additions Ensure sustainability of the business and cashflow whilst creating value for shareholders Exceed SAFETY HSSE Achievement of TRIFR below NOPSEMA industry average across Horizon’s assets Promote safe operations with a safe workplace for employees Achieved PEOPLE, CULTURE & SUSTAINABILITY People & Culture Sustainability Attracting the right skills and retaining key staff Deliver on requirements of Horizon’s sustainability roadmap, with enhanced reporting in accordance with TCFD guidelines Ensure Company has the necessary resources to achieve strategic objectives Sustainability awareness; make the right kind of impact Exceed Achieved Based on the KPI scorecard approved by the Board in respect of the financial year, Executives were eligible for a possible STI a w a r d e q u a l t o 1 0 0 % o f t h e i r t o t a l S T I o p p o r t u n i t y d u e t o t h e o u t s t a n d i n g c o m p a n y p e r f o r m a n c e d u r i n g t h e y e a r . I n determining the final STI award for executives for FY26, the Board have decided to allocate 20% of the FY26 STI opportunity to FY27 and this will be measured against the integration of the Cue acquisition. Accordingly, FY27 will have a possible STI award equal to 120% of the executive’s total STI opportunity. The significant effort applied by staff and executives was considered in determining the final STI award. The table below shows the STIs awarded during the financial year: EXECUTIVE TOTAL OPPORTUNITY US$1 % OF FIXED REMUNERATION % AWARDED % FORFEITED R Beament 434,911 100% 75% 25% G Douglas 289,940 80% 75% 25% K Keen 152,492 60% 75% 25% 1 The STI opportunity is calculated by translating the Executives Australian Dollar denominated TFR to United States Dollars at the prevailing spot rate on 30 June 2026. STI’s awarded are settled in a combination of cash and deferred STI rights, refer to section 2.3. [4.3] - Performance against LTI measures for the financial year Horizon’s share price performance for the current and previous four financial years is displayed in the chart under section 4.1 of this Report. LTI awarded in respect of FY26 No Performance Rights were awarded or issued during the financial period. Awards vesting in FY26 During the period Tranches A1, B1 and C1 of KMP’s Performance Rights vested. These vested tranches represent one third of all Performance Rights held by KMP’s. (5) Non-Executive Director Remuneration NEDs are paid fees for services on the Board and committees and do not receive any performance-r elated incentives and no retirement benefits are provided other than superannuation contributions. The Remuneration and Nomination Committee reviews fees annually and the Board may also seek advice from external advisers when undertaking the review process. NED fees are determined within an aggregate Directors’ fee pool limit, which is periodically recommended for approval by shareholders. Shareholders approved an increase to the fee pool limit to A$750,000 at the 2025 Annual General Meeting. Note that the remuneration table on this page shows remuneration in US$ in line with the Group’s functional currency. The table below shows the levels for NEDs (inclusive of superannuation) for FY26. FEES DESCRIPTION PER ANNUM Board Fees Chair A$230,000 Other Non-executive Directors A$115,000 There were no additional fees paid to NEDs during the financial year for being members of the Board committees. The NEDs a r e r e i m b u r s e d f o r e x p e n s e s r e a s o n a b l y i n c u r r e d i n a t t e n d i n g t o t h e a f f a i r s o f t h e C o m p a n y . T h e r e a r e n o r e t i r e m e n t allowances in place for NEDs. (6) Statutory and share based reporting [6.1] - Director remuneration for the financial year The following table sets out the statutory disclosures required under the Corporations Act 2001 (Cth) and in accordance with Australian Accounting Standards remuneration for Directors for the years ended 30 June 2026 and 30 June 2025. FINANCIAL YEAR ENDED 30 JUNE 2026 AND 2025 NON-EXECUTIVE DIRECTOR SHORT TERM BENEFITS CASH SALARY / BOARD FEES US$ POST-EMPLOYMENT BENEFITS SUPERANNUATION4 US$ TOTAL5 US$ B Clement 2026 123,641 14,837 138,478 2025 83,185 9,566 92,751 C Costello 2026 62,237 7,468 69,705 2025 4,874 - 4,874 G Bittar3 2026 62,237 7,468 69,705 2025 51,856 5,963 57,819 N Burgess 2026 69,809 - 69,809 2025 57,819 - 57,819 P Goode 2026 62,237 7,468 69,705 2025 41,164 4,734 45,898 M Harding1 2026 - - - 2025 41,052 4,721 45,773 S Birkensleigh2 2026 8,663 1,040 9,703 2025 51,856 5,963 57,819 Total Non-Executive Director remuneration (US$) 2026 388,824 38,281 427,105 2025 331,806 30,947 362,753 Total Non-Executive Director remuneration (A$) 2026 571,473 56,319 627,792 2025 512,403 47,801 560,204 1 Mr Harding was a non-executive director and Chairman until his retirement 20 November 2024. 2 Ms Birkensleigh was a non-executive director until her retirement on 25 August 2025. 3 Mr Lorenzon, as alternate Director to Mr Bittar, received no fees during the current and prior financial periods. 4 Superannuation includes both compulsory superannuation payments and salary sacrifice payments made on election by Directors. 5 Remuneration is paid in Australian dollars and converted to US dollars at the foreign exchange rate prevailing on the date of the transaction.
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Horizon Oil Annual Report 2026 38 [6.2] - Statutory details of other key management personnel remuneration for the financial year The table below outlines the remuneration of other key management personnel for the years ended 30 June 2026 and 30 June 2025. Remuneration is paid in Australian dollars and converted to US dollars, as presented below, at the foreign exchange rate prevailing on the date of the transaction. FINANCIAL YEAR ENDED 30 JUNE 2026 AND 2025 SHORT-TERM BENEFITS POST- EMPLOYMENT BENEFITS TOTAL CASH OR IN-KIND BENEFITS LONG-TERM BENEFITS SHARE BASED PAYMENTS TOTAL OTHER KEY MANAGEMENT PERSONNEL CASH SALARY & FEES CASH STIs ANNUAL LEAVE ACCURAL3 NON- MONETARY1 SUPER ANNUATION2 LONG SERVICE LEAVE ACCURAL3 LONG-TERM INCENTIVES4 R Beament Chief Executive Officer 2026 407,252 163,092 (7,628) 17,640 20,256 600,612 8,009 474,999 1,083,620 2025 388,534 175,376 7,957 14,521 19,426 605,814 (6,493) 475,735 1,075,056 G Douglas Chief Operating Officer 2026 336,001 108,728 3,912 6,285 20,256 475,182 (22,010) 318,032 771,204 2025 320,581 116,918 4,524 5,534 19,382 466,939 (10,487) 316,490 772,942 K Keen, Chief Financial Officer /Assistant Co Sec 2026 229,576 57,184 (3,728) 4,407 20,256 307,695 7,415 217,783 532,893 2025 200,788 56,789 3,003 4,750 19,382 284,712 7,382 372,194 664,288 Total KMP remuneration (US$) 2026 972,829 329,004 (7,444) 28,332 60,768 1,383,489 (6,586) 1,010,814 2,387,717 2025 909,903 349,083 15,484 24,805 58,190 1,357,465 (9,598) 1,164,419 2,512,286 Total KMP remuneration (A$)5 2026 1,440,775 478,969 (11,025) 41,961 90,000 2,040,680 (9,754) 1,499,137 3,530,063 2025 1,405,142 532,950 23,640 38,307 89,864 2,089,903 (14,823) 1,724,547 3,799,627 1 Non-monetary benefits include the value of car parking, insurances and other expenses inclusive of Fringe Benefits Tax (“FBT”). 2 Superannuation includes both compulsory superannuation payments and salary sacrifice payments made on election by Directors and KMPs. 3 Reflects the movement in the annual and long service accruals between respective reporting dates. 4 Reflects the current period expense of the grant date value (converted to US dollars at the foreign exchange rate prevailing at that date) of Performance Rights and Deferred STI Rights. [6.3] - Shareholding of key management personnel Shareholding The following tables detail the number of shares held by KMP, either directly or indirectly or beneficially during the reporting period ended 30 June 2026: KMP OPENING BALANCE 1 JULY 2025 ACQUIRED DURING FY26 DISPOSED DURING FY26 RECEIVED DURING FY26 ON THE EXERCISE OF RIGHTS CLOSING BALANCE 30 JUNE 2026 DIRECTORS B Clement - - - - - R Beament 12,916,026 - - 703,260 13,619,286 C Costello - - - - - G Bittar 1,000,000 - - - 1,000,000 N Burgess1 314,212,423 - - - 314,212,423 P Goode - - - - - S Birkensleigh - - - - - 1 Mr Burgess is a Director of Samuel Terry Asset Management Pty Ltd, the Trustee and Investment Manager of Samuel Terry Absolut e Return Fund which holds the 314,212,423 shares. OTHER KMP G Douglas 6,497,413 - -- 469,335 6,966,748 K Keen 4,935,884 - -- 122,377 5,058,261
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Horizon Oil Annual Report 2026 39 [6.2] - Statutory details of other key management personnel remuneration for the financial year The table below outlines the remuneration of other key management personnel for the years ended 30 June 2026 and 30 June 2025. Remuneration is paid in Australian dollars and converted to US dollars, as presented below, at the foreign exchange rate prevailing on the date of the transaction. FINANCIAL YEAR ENDED 30 JUNE 2026 AND 2025 SHORT-TERM BENEFITS POST- EMPLOYMENT BENEFITS TOTAL CASH OR IN-KIND BENEFITS LONG-TERM BENEFITS SHARE BASED PAYMENTS TOTAL OTHER KEY MANAGEMENT PERSONNEL CASH SALARY & FEES CASH STIs ANNUAL LEAVE ACCURAL3 NON- MONETARY1 SUPER ANNUATION2 LONG SERVICE LEAVE ACCURAL3 LONG-TERM INCENTIVES4 R Beament Chief Executive Officer 2026 407,252 163,092 (7,628) 17,640 20,256 600,612 8,009 474,999 1,083,620 2025 388,534 175,376 7,957 14,521 19,426 605,814 (6,493) 475,735 1,075,056 G Douglas Chief Operating Officer 2026 336,001 108,728 3,912 6,285 20,256 475,182 (22,010) 318,032 771,204 2025 320,581 116,918 4,524 5,534 19,382 466,939 (10,487) 316,490 772,942 K Keen, Chief Financial Officer /Assistant Co Sec 2026 229,576 57,184 (3,728) 4,407 20,256 307,695 7,415 217,783 532,893 2025 200,788 56,789 3,003 4,750 19,382 284,712 7,382 372,194 664,288 Total KMP remuneration (US$) 2026 972,829 329,004 (7,444) 28,332 60,768 1,383,489 (6,586) 1,010,814 2,387,717 2025 909,903 349,083 15,484 24,805 58,190 1,357,465 (9,598) 1,164,419 2,512,286 Total KMP remuneration (A$)5 2026 1,440,775 478,969 (11,025) 41,961 90,000 2,040,680 (9,754) 1,499,137 3,530,063 2025 1,405,142 532,950 23,640 38,307 89,864 2,089,903 (14,823) 1,724,547 3,799,627 1 Non-monetary benefits include the value of car parking, insurances and other expenses inclusive of Fringe Benefits Tax (“FBT”). 2 Superannuation includes both compulsory superannuation payments and salary sacrifice payments made on election by Directors and KMPs. 3 Reflects the movement in the annual and long service accruals between respective reporting dates. 4 Reflects the current period expense of the grant date value (converted to US dollars at the foreign exchange rate prevailing at that date) of Performance Rights and Deferred STI Rights. [6.3] - Shareholding of key management personnel Shareholding The following tables detail the number of shares held by KMP, either directly or indirectly or beneficially during the reporting period ended 30 June 2026: KMP OPENING BALANCE 1 JULY 2025 ACQUIRED DURING FY26 DISPOSED DURING FY26 RECEIVED DURING FY26 ON THE EXERCISE OF RIGHTS CLOSING BALANCE 30 JUNE 2026 DIRECTORS B Clement - - - - - R Beament 12,916,026 - - 703,260 13,619,286 C Costello - - - - - G Bittar 1,000,000 - - - 1,000,000 N Burgess1 314,212,423 - - - 314,212,423 P Goode - - - - - S Birkensleigh - - - - - 1 Mr Burgess is a Director of Samuel Terry Asset Management Pty Ltd, the Trustee and Investment Manager of Samuel Terry Absolut e Return Fund which holds the 314,212,423 shares. OTHER KMP G Douglas 6,497,413 - -- 469,335 6,966,748 K Keen 4,935,884 - -- 122,377 5,058,261 Long Term Incentives The following tables detail the number of Performance Rights and Deferred STI Rights held by KMP, either directly or indirectly or beneficially during the reporting period ended 30 June 2026: KMP BALANCE AT START OF FINANCIAL YEAR GRANTED AS REMUNERATION DURING FINANCIAL YEAR DISTRIBUTION ADJUSTMENT1 EXERCISED DURING FINANCIAL YEAR LAPSED DURING FINANCIAL YEAR BALANCE AT END OF FINANCIAL YEAR VESTED AND EXERCISABLE AT END OF FINANCIAL YEAR UNVESTED PERFORMANCE RIGHTS R Beament 8,577,963 - 1,442,864 - - 10,020,827 3,340,274 6,680,553 G Douglas 5,718,642 - 961,908 - - 6,680,550 2,226,849 4,453,701 K Keen 4,574,913 - 769,526 - - 5,344,439 1,781,479 3,562,960 DEFERRED STI RIGHTS2 R Beament 1,326,906 1,394,531 217,894 (1,326,906) - 1,612,425 1,612,425 - G Douglas 885,539 929,687 145,262 (885,539) - 1,074,949 1,074,949 - K Keen 230,901 451,562 70,556 (230,901) - 522,118 522,118 - 1 In accordance with the plan, the number of rights held by each KMP were adjusted during the financial year for the dividend distributions paid of AUD 3.0 cents per share. A further adjustment associated with the AUD 1.0 cent FY26 final dividend will apply. 2 Subsequent to the end of the financial year, the Board exercised its discretion, and cash settled all vested deferred STI rights . Additionally, 2,351,344 deferred STI rights were issued to KMP in relation to their 2026 STI award. Option holdings No listed options in the Company were held during the current or prior financial year by Directors and other KMP, including their personally related entities. Unlisted options held by Directors and other KMP are disclosed in section 6.3. [6.4] - Securities Trading Policy The Group’s Securities Trading Policy applies to all Directors, other Executives, employees and their related parties and set s out the procedures and principles that apply to trading in Horizon Oil Limited securities. A copy of the Securities Trading Policy is available on the Company website www.horizonoil.com.au. [6.5] - Other transactions with KMP Other than as noted above, there are no other transactions between any of the KMP with any of the companies which are related to or provide services to the Group unless disclosed in this Report. There were no loans to any of the KMP during the financial year.
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Horizon Oil Annual Report 2026 40 [6.6] - Additional statutory information Terms and conditions of the share-based arrangements The terms and conditions of each grant of Performance Rights that affected or will affect remuneration for Executive KMP in the previous, current or future reporting periods are as follows: TRANCHE NUMBER OF RIGHTS1 SHARE PRICE HURDLE (A$)1 VALUE PER PERFORMANCE RIGHT AT GRANT DATE2 DATE EXERCISED CEO PERFORMANCE RIGHTS Tranche A1 Rights 1,145,832 0.160 A$0.1619 - Tranche A2 Rights 2,291,665 0.160 A$0.1633 - Tranche B1 Rights 1,111,110 0.180 A$0.1548 - Tranche B2 Rights 2,222,222 0.180 A$0.1561 - Tranche C1 Rights 1,083,332 0.200 A$0.1481 - Tranche C2 Rights 2,166,666 0.200 A$0.1495 - COO PERFORMANCE RIGHTS Tranche A1 Rights 763,888 0.160 A$0.1643 - Tranche A2 Rights 1,527,777 0.160 A$0.1646 - Tranche B1 Rights 740,740 0.180 A$0.1592 - Tranche B2 Rights 1,481,482 0.180 A$0.1595 - Tranche C1 Rights 722,221 0.200 A$0.1539 - Tranche C2 Rights 1,444,442 0.200 A$0.1549 - CFO PERFORMANCE RIGHTS Tranche A1 Rights 611,110 0.160 A$0.1643 - Tranche A2 Rights 1,222,222 0.160 A$0.1646 - Tranche B1 Rights 592,592 0.180 A$0.1592 - Tranche B2 Rights 1,185,184 0.180 A$0.1595 - Tranche C1 Rights 577,777 0.200 A$0.1539 - Tranche C2 Rights 1,155,554 0.200 A$0.1549 - 1 In accordance with the plan, the Share Price Hurdles and number of rights were adjusted to account for the aggregate AUD 3 cents per an Ordinary Share of distributions paid to shareholders during the 2026 financial year. 2 The value per Performance Right at grant date is determined by an independent expert. The amounts disclosed for the remuneration of Directors and other KMP include the assessed fair values of Performance Rights granted during the financial year, at the grant date expensed over the relevant vesting period. Fair values have been assessed by an independent expert using a Monte Carlo simulation. Factors taken into account by this model include the exercise price, time to maturity, the current share price and expected price volatility of the underlying Horizon shares, the expected dividend yield and the risk-free interest rate. The value attributable to Performance Rights is allocated to particular periods in accordance with AASB 2 ‘Share-based Payment’.
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Horizon Oil Annual Report 2026 41 [6.6] - Additional statutory information Terms and conditions of the share-based arrangements The terms and conditions of each grant of Performance Rights that affected or will affect remuneration for Executive KMP in the previous, current or future reporting periods are as follows: TRANCHE NUMBER OF RIGHTS1 SHARE PRICE HURDLE (A$)1 VALUE PER PERFORMANCE RIGHT AT GRANT DATE2 DATE EXERCISED CEO PERFORMANCE RIGHTS Tranche A1 Rights 1,145,832 0.160 A$0.1619 - Tranche A2 Rights 2,291,665 0.160 A$0.1633 - Tranche B1 Rights 1,111,110 0.180 A$0.1548 - Tranche B2 Rights 2,222,222 0.180 A$0.1561 - Tranche C1 Rights 1,083,332 0.200 A$0.1481 - Tranche C2 Rights 2,166,666 0.200 A$0.1495 - COO PERFORMANCE RIGHTS Tranche A1 Rights 763,888 0.160 A$0.1643 - Tranche A2 Rights 1,527,777 0.160 A$0.1646 - Tranche B1 Rights 740,740 0.180 A$0.1592 - Tranche B2 Rights 1,481,482 0.180 A$0.1595 - Tranche C1 Rights 722,221 0.200 A$0.1539 - Tranche C2 Rights 1,444,442 0.200 A$0.1549 - CFO PERFORMANCE RIGHTS Tranche A1 Rights 611,110 0.160 A$0.1643 - Tranche A2 Rights 1,222,222 0.160 A$0.1646 - Tranche B1 Rights 592,592 0.180 A$0.1592 - Tranche B2 Rights 1,185,184 0.180 A$0.1595 - Tranche C1 Rights 577,777 0.200 A$0.1539 - Tranche C2 Rights 1,155,554 0.200 A$0.1549 - 1 In accordance with the plan, the Share Price Hurdles and number of rights were adjusted to account for the aggregate AUD 3 cents per an Ordinary Share of distributions paid to shareholders during the 2026 financial year. 2 The value per Performance Right at grant date is determined by an independent expert. The amounts disclosed for the remuneration of Directors and other KMP include the assessed fair values of Performance Rights granted during the financial year, at the grant date expensed over the relevant vesting period. Fair values have been assessed by an independent expert using a Monte Carlo simulation. Factors taken into account by this model include the exercise price, time to maturity, the current share price and expected price volatility of the underlying Horizon shares, the expected dividend yield and the risk-free interest rate. The value attributable to Performance Rights is allocated to particular periods in accordance with AASB 2 ‘Share-based Payment’. The model inputs for each grant of Performance Rights included: CEO COO CFO Effective allocation date 1 July 2024 1 July 2024 1 July 2024 Expiry date 30 June 2029 30 June 2029 30 June 2029 Grant date 20 November 2024 28 August 2024 28 August 2024 Exercise price Nil1 Nil1 Nil1 Expected price volatility 55% p.a. 55% p.a. 55% p.a. Risk free rate 4.17% p.a. 3.62% p.a. 3.62% p.a. Expected dividend yield Nil Nil Nil 1 No price is payable by a participant in the Long-Term Incentive Plan on the exercise of a Performance Right. The respective hurdles prices are disclosed in section 2.3. Details of remuneration For each grant of Performance Rights and Deferred STI Rights issued to KMP in the current or prior financial years which results in an amount being disclosed in the Remuneration Report as a share -based payment to KMP for the financial year, the percentage of the grant that vested in the financial year and the percentage that was forfeited because the person did not meet the vesting or performance conditions is set out below. Performance Rights are expensed over the expected vesting period. The expected vesting date and expected vesting period are determined at the date of grant and may differ from the date the Performance Rights actually vest and become exercisable. No Performance Rights and Deferred STI Rights will vest if the performance conditions are not fulfilled, therefore the minimum value yet to vest is US$Nil. The maximum value of the Performance Rights and Deferred STI yet to vest has been determined as the a m o u n t o f t h e f a i r v a l u e a t t h e g r a n t d a t e t h a t i s y e t t o b e e x p e n s e d . T h e b e l o w v a l u e s h a v e b e e n converted to dollars at the exchange rate prevailing on the date of the grant. PERFORMANCE RIGHTS NAME FINANCIAL YEAR GRANTED VESTED % FORFEITED % FINANCIAL YEAR IN WHICH PERFORMANCE RIGHTS MAY VEST MAXIMUM TOTAL VALUE OF GRANT YET TO VEST US$ R Beament 2025 36% - 2026 – 2028 224,569 G Douglas 2025 36% - 2026 – 2028 152,419 K Keen 2025 36% - 2026 – 2028 121,936 DEFERRED STI RIGHTS NAME FINANCIAL YEAR GRANTED VESTED % FORFEITED % FINANCIAL YEAR IN WHICH DEFERRED STIs MAY VEST MAXIMUM TOTAL VALUE OF GRANT YET TO VEST US$ R Beament 2025 100% - Vested and exercised - 2026 50% - 2027 81,546 G Douglas 2025 100% - Vested and exercised - 2026 50% - 2027 54,364 K Keen 2025 100% - Vested and exercised - 2026 50% - 2027 28,592
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Horizon Oil Annual Report 2026 42 Dividends The Board has declared a final dividend of AUD 1.0 cent per Ordinary share totalling approximately AUD 17.4 million. This dividend was declared as a Conduit Foreign Income (CFI) unfranked dividend and will be paid on 23 October 2026. During the financial year, the Board also declared an interim dividend of AUD 1.5 cents per Ordinary share totalling approximately AUD 24.4 million. This dividend was declared as a Conduit Foreign Income (CFI) unfranked dividend and was paid on 17 April 2026. Insurance of Officers During the financial year, Horizon Oil Limited paid a premium to insure the Directors and secretaries of the Company and related bodies corporate. The insured liabilities exclude conduct involving a wilful breach of duty or improper use of information or position to gain a personal advantage. The contract prohibits the disclosure of the premium paid. The officers of the Company covered by the insurance policy include the Directors and secretaries, and other officers who are Directors or secretaries of subsidiaries who are not also Directors or secretaries of Horizon Oil Limited. The liabilities insured include costs and expenses that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of the Company or a related body corporate. Non-Audit Services The Company may decide to employ PricewaterhouseCoopers on assignments additional to its statutory audit duties where the external auditor’s expertise and experience with the Company and/or the Group are important. Details of the amounts paid or payable to PricewaterhouseCoopers for audit and non-audit services provided during the financial year are set out below. The Board of Directors has considered the position and, in accordance with the written advice received from the Audit Committee, is satisfied that the provision of non-audit services is compatible with the general standard of independence for external auditors imposed by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit services by t he external auditor, as s et out below, did not compromise the external auditor independence r equirements o f the Corporations Act 2001 for the following reasons: – all non -audit services have been reviewed by the Audit Committee to ensure they do not impact the impartiality and objectivity of the external auditor; and – n o n e o f t h e s e r v i c e s u n d e r m i n e t h e g e n e r a l p r i n c i p l e s r e l a t i n g t o a u d i t o r i n d e p e n d e n c e a s s e t o u t i n A u s t r a l i a n Professional Ethical Standards 110 Code of Ethics for Professional Accountants, including reviewing or auditing the auditor’s own work, acting in a management or a decision-making capacity for the Group, acting as advocate for the Group or jointly sharing economic risk and rewards. Remuneration of external auditors C ONSOLIDATED 2026 US$ 2025 US$ During the financial year, the following fees were paid or payable for services provided by the external auditor of the parent entity and its related practices: PWC AUSTRALIA Audit and other assurance services Audit and review of financial reports 295,337 231,365 Other assurance services 15,988 13,788 Total auditors’ remuneration 311,325 245,153
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Horizon Oil Annual Report 2026 43 Dividends The Board has declared a final dividend of AUD 1.0 cents per Ordinary share totalling approximately AUD 17.4 million. This dividend was declared as a Conduit Foreign Income (CFI) unfranked dividend and will be paid on 23 October 2026. During the financial year, the Board also declared an interim dividend of AUD 1.5 cents per Ordinary share totalling approximately AUD 24.4 million. This dividend was declared as a Conduit Foreign Income (CFI) unfranked dividend and was paid on 17 April 2026. Insurance of Officers During the financial year, Horizon Oil Limited paid a premium to insure the Directors and secretaries of the Company and related bodies corporate. The insured liabilities exclude conduct involving a wilful breach of duty or improper use of information or position to gain a personal advantage. The contract prohibits the disclosure of the premium paid. The officers of the Company covered by the insurance policy include the Directors and secretaries, and other officers who are Directors or secretaries of subsidiaries who are not also Directors or secretaries of Horizon Oil Limited. The liabilities insured include costs and expenses that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of the Company or a related body corporate. Non-Audit Services The Company may decide to employ PricewaterhouseCoopers on assignments additional to its statutory audit duties where the external auditor’s expertise and experience with the Company and/or the Group are important. Details of the amounts paid or payable to PricewaterhouseCoopers for audit and non -audit services provided during the financial year are set out below. The Board of Directors has considered the position and, in accordance with the written advice received from the Audit Committee, is satisfied that the provision of non-audit services is compatible with the general standard of independence for external auditors imposed by the Corporations Act 2001. The Directors are satisfied that the provision of non -audit services b y t h e e x t e r n a l a u d i t o r , a s s e t o u t b e l o w , d i d n o t c o m p r o m i s e t h e e x t e r n a l a u d i t o r i n d e p e n d e n c e r e q u i r e m e n t s o f t h e Corporations Act 2001 for the following reasons: – all non -audit services have been reviewed by the Audit Committee to ensure they do not impact the impartiality and objectivity of the external auditor; and – n o n e o f t h e s e r v i c e s u n d e r m i n e t h e g e n e r a l p r i n c i p l e s r e l a t i n g t o a u d i t o r i n d e p e n d e n c e a s s e t o u t i n A u s t r a l i a n Professional Ethical Standards 110 Code of Ethics for Professional Accountants, including reviewing or auditing the auditor’s own work, acting in a management or a decision-making capacity for the Group, acting as advocate for the Group or jointly sharing economic risk and rewards. Remuneration of external auditors CONSOLIDATED 2026 US$ 2025 US$ During the financial year, the following fees were paid or payable for services provided by the external auditor of the parent entity and its related practices: PWC AUSTRALIA Audit and other assurance services Audit and review of financial reports 295,337 231,365 Other assurance services 15,988 13,788 Total auditors’ remuneration 311,325 245,153 External Auditor’s Independence Declaration A copy of the external auditors’ independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 44. Rounding of Amounts to The Nearest Thousand Dollars The amounts contained in this report, and in the financial report, have been rounded under the option available to the Group under ASIC Corporations (Rounding in Financial/Directors' Reports) Instrument 2026/183. The Group is an entity of the kind to which the Class Order applies and accordingly amounts in the Directors’ Report have been rounded off in accordance with that Class Order to the nearest thousand dollars or, in certain cases, to the nearest dollar. External Auditor PricewaterhouseCoopers continues in office in accordance with section 327 of the Corporations Act 2001. This report is made in accordance with a resolution of the Directors. B Clement R Beament Chairman Chief Executive Officer Sydney 27 August 2026
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Horizon Oil Annual Report 2026 44 PricewaterhouseCoopers, ABN 52 780 433 757 One International Towers Sydney, Watermans Quay, BARANGAROO NSW 2000, GPO BOX 2650 SYDNEY NSW 2001 T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au pwc.com.au Liability limited by a scheme approved under Professional Standards Legislation. Auditor’s Independence Declaration As lead auditor of Horizon Oil Limited's financial report for the year ended 30 June 2026, I declare that, to the best of my knowledge and belief, there have been: a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit of the financial report; and b) no contraventions of any applicable code of professional conduct in relation to the audit of the financial report. Marc Upcroft Sydney Partner 27 August 2026 PricewaterhouseCoopers
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Horizon Oil Annual Report 2026 45 PricewaterhouseCoopers, ABN 52 780 433 757 One International Towers Sydney, Watermans Quay, BARANGAROO NSW 2000, GPO BOX 2650 SYDNEY NSW 2001 T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au pwc.com.au Liability limited by a scheme approved under Professional Standards Legislation. Auditor’s Independence Declaration As lead auditor of Horizon Oil Limited's financial report for the year ended 30 June 2026, I declare that, to the best of my knowledge and belief, there have been: a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit of the financial report; and b) no contraventions of any applicable code of professional conduct in relation to the audit of the financial report. Marc Upcroft Sydney Partner 27 August 2026 PricewaterhouseCoopers PricewaterhouseCoopers, ABN 52 780 433 757 One International Towers Sydney, Watermans Quay, Barangaroo NSW 2000, GPO BOX 2650 Sydney NSW 2001 T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au pwc.com.au Liability limited by a scheme approved under Professional Standards Legislation. Independent auditor’s report To the members of Horizon Oil Limited Report on the audit of the financial report Our opinion In our opinion, the accompanying financial report of Horizon Oil Limited (the Company) and its controlled entities (together the Group) is in accordance with the Corporations Act 2001, including: a) giving a true and fair view of the Group’s financial position as at 30 June 2026 and of its financial performance for the year then ended; and b) complying with Australian Accounting Standards and the Corporations Regulations 2001. What we have audited The financial report comprises: • the consolidated statement of financial position as at 30 June 2026; • the consolidated statement of profit or loss and other comprehensive income for the year then ended; • the consolidated statement of changes in equity for the year then ended; • the consolidated statement of cash flows for the year then ended; • the notes to the consolidated financial statements, including material accounting policy information and other explanatory information; • the consolidated entity disclosure statement as at 30 June 2026; and • the directors’ declaration.
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Horizon Oil Annual Report 2026 46 Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to audits of the financial report of public interest entities in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. Our audit approach An audit is designed to provide reasonable assurance about whether the financial report is free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report. We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial report as a whole, taking into account the geographic and management structure of the Group, its accounting processes and controls and the industry in which it operates. Audit Scope Our audit focused on where the Group made subjective judgements; for example, significant accounting estimates involving assumptions and inherently uncertain future events. In establishing the overall approach to the group audit, we determined the type of work that needed to be performed by us, as the group auditor, or component auditors from other audit firms operating under our instruction. Where the work was performed by component auditors, we determined the level of involvement we needed to have in the audit work at those components to be able to conclude whether
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Horizon Oil Annual Report 2026 47 Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to audits of the financial report of public interest entities in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. Our audit approach An audit is designed to provide reasonable assurance about whether the financial report is free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report. We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial report as a whole, taking into account the geographic and management structure of the Group, its accounting processes and controls and the industry in which it operates. Audit Scope Our audit focused on where the Group made subjective judgements; for example, significant accounting estimates involving assumptions and inherently uncertain future events. In establishing the overall approach to the group audit, we determined the type of work that needed to be performed by us, as the group auditor, or component auditors from other audit firms operating under our instruction. Where the work was performed by component auditors, we determined the level of involvement we needed to have in the audit work at those components to be able to conclude whether sufficient appropriate audit evidence had been obtained as a basis for our opinion on the Group financial report as a whole. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report for the current period. The key audit matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Further, any commentary on the outcomes of a particular audit procedure is made in that context. We communicated the key audit matters to the Audit and Risk Committee. Key audit matter How our audit addressed the key audit matter Restoration Provision (Refer to Note 17) The estimation of restoration provisions by the Group involves significant judgement in selecting methodologies and assumptions, the methodology for estimating cost and discount rates used to estimate the present value of these cash flows. The restoration provision was a key audit matter due to the significance of the balance and the required judgement, effort and subjectivity in performing procedures and evaluating the Group’s methodology, significant assumptions and estimates. We performed the following procedures, amongst others: • Developed an understanding of how the Group identified the relevant methods, assumptions and sources of data that are appropriate for developing the closure plans and associated cost estimates. • Developed an understanding of the relevant control activities associated with developing the closure plans and associated cost estimates. • Assessed the appropriateness of the Group’s significant assumptions used, including the reliability and relevance of the Group’s key data used in the closure plans and associated cost estimates. • Tested the mathematical accuracy of the provision calculations and assessed whether they were in accordance with the method. • Assessed the reasonableness of the note disclosures in the financial statements for the year ended 30 June 2026 in light of the requirements of Australian Accounting Standards. Completion of MH Energy Thailand LLC acquisition and acquisition of Cue Energy Resources Limited (Refer to Notes 13 and 22) We performed the following procedures, amongst others:
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Horizon Oil Annual Report 2026 48 Key audit matter How our audit addressed the key audit matter During the financial year, the Group completed the acquisition of MH Energy Thailand LLC (“MHET”) with an effective date of 1 January 2025. The investment is classified as a joint venture and accounted for using the equity method of accounting. Revenues earned and costs incurred from effective date to the 1 August 2025 completion date were adjusted against the initial purchase consideration. The Group has also acquired a 57.03% controlling interest in Cue Energy Resources Limited ("Cue", ASX: CUE). This acquisition has been accounted for as a business combination. As a result of the size and timing of the transaction, the purchase price allocation was provisional at 30 June 2026 and will be finalised within 12 months from the acquisition. These acquisitions are a key audit matter given their size, nature, and the related judgements made by the Group. • Evaluated the Group's accounting by considering the requirements of Australian Accounting Standards, key transaction agreements, our understanding obtained of the business acquired and selected minutes of the Board of Directors meetings • Evaluated the valuation methodologies and assessed the appropriateness of the valuation assumptions used by the Group on which the fair values of the identifiable assets and liabilities acquired were based. • Evaluated the completeness and accuracy of the underlying data supporting the significant judgements and estimates used by the Group. • Tested the fair value of the consideration as part of the MHET equity investment and Cue business combination transactions with reference to the cash, equity shares and contingent consideration elements. • Evaluated the reasonableness of the equity accounting and business combination disclosures in Note 13 and Note 22 respectively in light of the requirements of Australian Accounting Standards. Other information The directors are responsible for the other information. The other information comprises the information included in the annual report for the year ended 30 June 2026, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon through our opinion on the financial report. We have issued a separate opinion on the remuneration report. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
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Horizon Oil Annual Report 2026 49 Key audit matter How our audit addressed the key audit matter During the financial year, the Group completed the acquisition of MH Energy Thailand LLC (“MHET”) with an effective date of 1 January 2025. The investment is classified as a joint venture and accounted for using the equity method of accounting. Revenues earned and costs incurred from effective date to the 1 August 2025 completion date were adjusted against the initial purchase consideration. The Group has also acquired a 57.03% controlling interest in Cue Energy Resources Limited ("Cue", ASX: CUE). This acquisition has been accounted for as a business combination. As a result of the size and timing of the transaction, the purchase price allocation was provisional at 30 June 2026 and will be finalised within 12 months from the acquisition. These acquisitions are a key audit matter given their size, nature, and the related judgements made by the Group. • Evaluated the Group's accounting by considering the requirements of Australian Accounting Standards, key transaction agreements, our understanding obtained of the business acquired and selected minutes of the Board of Directors meetings • Evaluated the valuation methodologies and assessed the appropriateness of the valuation assumptions used by the Group on which the fair values of the identifiable assets and liabilities acquired were based. • Evaluated the completeness and accuracy of the underlying data supporting the significant judgements and estimates used by the Group. • Tested the fair value of the consideration as part of the MHET equity investment and Cue business combination transactions with reference to the cash, equity shares and contingent consideration elements. • Evaluated the reasonableness of the equity accounting and business combination disclosures in Note 13 and Note 22 respectively in light of the requirements of Australian Accounting Standards. Other information The directors are responsible for the other information. The other information comprises the information included in the annual report for the year ended 30 June 2026, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon through our opinion on the financial report. We have issued a separate opinion on the remuneration report. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the directors for the financial report The directors of the Company are responsible for the preparation of the financial report in accordance with Australian Accounting Standards and the Corporations Act 2001, including giving a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: https://auasb.gov.au/media/bwvjcgre/ar1_2024.pdf. This description forms part of our auditor’s report. Report on the remuneration report Our opinion on the remuneration report We have audited the remuneration report included in the directors’ report for the year ended 30 June 2026.
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Horizon Oil Annual Report 2026 50 DIRECTORS’ DECLARATION In the directors’ opinion: [i] the financial statements and notes are in accordance with the Corporations Act 2001 including: a. complying with A ustralian A ccounting Standards, t he C orporations R egulations 2 001 and o ther m andatory professional reporting requirements; b. giving a true and fair view of the consolidated entity’s financial position as at 30 June 2026 and of its performance for the financial year ended on that date; [ii] there are reasonable grounds to believe that the Company will be able to p ay its debts as and when they become due and payable: and [iii] the consolidated entity disclosure statement on page 110 is true and correct. Note 1 confirms that the financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board. The directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by Section 295A of the Corporations Act 2001. This declaration is made in accordance with a resolution of the directors. B Clement R Beament Chairman Chief Executive Officer Sydney 27 August 2026 In our opinion, the remuneration report of Horizon Oil Limited for the year ended 30 June 2026 complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards. PricewaterhouseCoopers Marc Upcroft Sydney Partner 27 August 2026
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Horizon Oil Annual Report 2026 51 DIRECTORS’ DECLARATION In the directors’ opinion: [i] the financial statements and notes are in accordance with the Corporations Act 2001 including: a. complying with A ustralian A ccounting Standards, t he C orporations R egulations 2 001 and o ther m andatory professional reporting requirements; b. giving a true and fair view of the consolidated entity’s financial position as at 30 June 2026 and of its performance for the financial year ended on that date; [ii] there are reasonable grounds to believe that the Company will be able to p ay its debts as and when they become due and payable: and [iii] the consolidated entity disclosure statement on page 110 is true and correct. Note 1 confirms that the financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board. The directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by Section 295A of the Corporations Act 2001. This declaration is made in accordance with a resolution of the directors. B Clement R Beament Chairman Chief Executive Officer Sydney 27 August 2026 In our opinion, the remuneration report of Horizon Oil Limited for the year ended 30 June 2026 complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards. PricewaterhouseCoopers Marc Upcroft Sydney Partner 27 August 2026
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Horizon Oil Annual Report 2026 52 HORIZON OIL LIMITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2026 CONSOLIDATED NOTE 2026 US$’000 2025 US$’000 CURRENT ASSETS Cash and cash equivalents 7 37,400 39,782 Receivables 8 14,731 14,507 Inventories 9 10,975 3,733 Derivative financial instruments 10 713 406 Other assets 11 3,014 2,406 Intangible assets 12 107 585 Total current assets 66,940 61,419 NON-CURRENT ASSETS Investments 13 20,406 947 Deferred tax assets 6(f) 36,143 19,472 Plant and equipment 468 448 Oil and gas assets 14 151,695 97,869 Advances paid for restoration works 17 4,377 - Other assets 11 1,832 - Total non-current assets 214,921 118,736 Total assets 281,861 180,155 CURRENT LIABILITIES Payables 15 22,351 14,483 Current tax payable 6(g) 5,548 3,920 Borrowings 16 21,180 8,236 Derivative financial instruments 10 - 2 Total current liabilities 49,079 26,641 NON-CURRENT LIABILITIES Payables 15 3,068 2,894 Deferred tax liabilities 6(h) 19,076 3,468 Borrowings 16 26,311 17,419 Provisions 17 91,048 64,435 Total non-current liabilities 139,503 88,216 Total liabilities 188,582 114,857 Net assets 93,279 65,298 EQUITY Contributed equity 18 150,705 150,399 Reserves 19a 31,657 8,625 Accumulated losses 19b (177,568) (158,640) Profit reserve 19c 61,247 64,914 Attributable to shareholders of Horizon 66,041 65,298 Non-controlling interest (NCI) 27,238 - TOTAL EQUITY 93,279 65,298 The above consolidated statement of financial position should be read in conjunction with the accompanying notes. HORIZON OIL LIMITED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 30 JUNE 2026 CONSOLIDATED NOTE 2026 US$’000 2025 US$’000 REVENUE 4 84,162 105,307 Cost of sales 5 (68,760) (76,753) Gross profit 15,402 28,554 Other income 4 1,793 1,517 General and administrative expenses 5 (3,504) (3,872) Insurance expense 5 (1,980) (1,945) Exploration expenses written off (525) (494) Finance costs – interest, transaction costs, other 5 (8,466) (6,000) Impairment of intangible assets 5 (246) - Other expenses – acquisition related transaction costs (882) (727) Other income/ (expenses) – foreign exchange 611 (380) Share of net profit after tax from joint venture in Thailand 13 3,672 - Profit before income tax 5,875 16,653 NZ royalty tax expense 6a (530) (386) Income tax benefit/(expense) 6b 5,773 (4,020) Profit for the financial year 11,118 12,247 OTHER COMPREHENSIVE INCOME – ITEMS THAT MAY BE RECLASSIFIED TO PROFIT AND LOSS Changes in the fair value of cash flow hedges 625 375 Revaluation of investments to FVOCI (172) (404) Currency translation reserve (41) 87 Total comprehensive income for the financial year 11,530 12,305 Profit attributable to: Security holders of Horizon 10,649 12,247 Non-controlling interest (NCI) 469 - Profit for the financial year 11,118 12,247 Total comprehensive income attributable to: Security holders of Horizon 11,061 12,305 Non-controlling interest (NCI) 469 - Total comprehensive income for the financial year 11,530 12,305 Earnings per share for profit attributable to ordinary equity holders of Horizon: US cents US cents Basic earnings per ordinary share 34a 0.65 0.75 Diluted earnings per ordinary share 34b 0.64 0.75 The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
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Horizon Oil Annual Report 2026 53 HORIZON OIL LIMITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2026 CONSOLIDATED NOTE 2026 US$’000 2025 US$’000 CURRENT ASSETS Cash and cash equivalents 7 37,400 39,782 Receivables 8 14,731 14,507 Inventories 9 10,975 3,733 Derivative financial instruments 10 713 406 Other assets 11 3,014 2,406 Intangible assets 12 107 585 Total current assets 66,940 61,419 NON-CURRENT ASSETS Investments 13 20,406 947 Deferred tax assets 6(f) 36,143 19,472 Plant and equipment 468 448 Oil and gas assets 14 151,695 97,869 Advances paid for restoration works 17 4,377 - Other assets 11 1,832 - Total non-current assets 214,921 118,736 Total assets 281,861 180,155 CURRENT LIABILITIES Payables 15 22,351 14,483 Current tax payable 6(g) 5,548 3,920 Borrowings 16 21,180 8,236 Derivative financial instruments 10 - 2 Total current liabilities 49,079 26,641 NON-CURRENT LIABILITIES Payables 15 3,068 2,894 Deferred tax liabilities 6(h) 19,076 3,468 Borrowings 16 26,311 17,419 Provisions 17 91,048 64,435 Total non-current liabilities 139,503 88,216 Total liabilities 188,582 114,857 Net assets 93,279 65,298 EQUITY Contributed equity 18 150,705 150,399 Reserves 19a 31,657 8,625 Accumulated losses 19b (177,568) (158,640) Profit reserve 19c 61,247 64,914 Attributable to shareholders of Horizon 66,041 65,298 Non-controlling interest (NCI) 27,238 - TOTAL EQUITY 93,279 65,298 The above consolidated statement of financial position should be read in conjunction with the accompanying notes. HORIZON OIL LIMITED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 30 JUNE 2026 CONSOLIDATED NOTE 2026 US$’000 2025 US$’000 REVENUE 4 84,162 105,307 Cost of sales 5 (68,760) (76,753) Gross profit 15,402 28,554 Other income 4 1,793 1,517 General and administrative expenses 5 (3,504) (3,872) Insurance expense 5 (1,980) (1,945) Exploration expenses written off (525) (494) Finance costs – interest, transaction costs, other 5 (8,466) (6,000) Impairment of intangible assets 5 (246) - Other expenses – acquisition related transaction costs (882) (727) Other income/ (expenses) – foreign exchange 611 (380) Share of net profit after tax from joint venture in Thailand 13 3,672 - Profit before income tax 5,875 16,653 NZ royalty tax expense 6a (530) (386) Income tax benefit/(expense) 6b 5,773 (4,020) Profit for the financial year 11,118 12,247 OTHER COMPREHENSIVE INCOME – ITEMS THAT MAY BE RECLASSIFIED TO PROFIT AND LOSS Changes in the fair value of cash flow hedges 625 375 Revaluation of investments to FVOCI (172) (404) Currency translation reserve (41) 87 Total comprehensive income for the financial year 11,530 12,305 Profit attributable to: Security holders of Horizon 10,649 12,247 Non-controlling interest (NCI) 469 - Profit for the financial year 11,118 12,247 Total comprehensive income attributable to: Security holders of Horizon 11,061 12,305 Non-controlling interest (NCI) 469 - Total comprehensive income for the financial year 11,530 12,305 Earnings per share for profit attributable to ordinary equity holders of Horizon: US cents US cents Basic earnings per ordinary share 34a 0.65 0.75 Diluted earnings per ordinary share 34b 0.64 0.75 The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
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Horizon Oil Annual Report 2026 54 HORIZON OIL LIMITED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2026 CONSOLIDATED NOTE 2026 US$’000 2025 US$’000 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers 95,743 98,458 Payments to suppliers and employees (40,580) (47,599) 55,163 50,859 Dividends received from joint venture in Thailand 4,048 - Interest received 1,545 1,487 Interest paid (4,927) (3,247) Income and royalty taxes paid (8,594) (12,485) Acquisition related transaction costs - (727) Net cash inflow from operating activities 33 47,235 35,887 CASH FLOWS FROM INVESTING ACTIVITIES Payments for Thailand acquisition (23,046) (1,500) Payment for Cue acquisition - net of cash acquired (1,717) - Transaction costs on acquisitions (791) - Loan advanced to associate (5,000) - Repayment of loan by associate 1,828 - Payments for oil and gas assets (7,448) (15,018) Payments for plant and equipment (9) (7) Net cash outflow from investing activities (36,183) (16,525) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from amended debt facility 31,469 - Transaction costs incurred on borrowings (1,250) - Repayment for borrowings (10,567) - Payments under leasing arrangements (147) (180) Proceeds from new share issue (net of costs) 306 304 Payments for shares acquired by the Trust (306) (304) Dividends paid to shareholders (33,112) (31,881) Net cash outflow from financing activities (13,607) (32,061) NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (2,555) (12,700) Cash and cash equivalents at the beginning of the financial year 39,782 52,570 Effects of exchange rate changes on cash and cash equivalents held in foreign currencies 173 (89) Cash and cash equivalents at the end of the financial year 7 37,400 39,782 The above consolidated statement of cash flows should be read in conjunction with the accompanying notes. HORIZON OIL LIMITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 30 JUNE 2026 ATTRIBUTABLE TO MEMBERS OF HORIZON CONTRIBUTED EQUITY RESERVES ACCUMULATED LOSSES PROFIT RESERVE1 TOTAL NON- CONTROLLING INTEREST (NCI) TOTAL EQUITY US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$000 BALANCE AS AT 1 JULY 2024 150,095 7,241 (146,859) 72,766 83,243 - 83,243 Profit/(loss) for the financial year - - (11,781) 24,208 12,247 - 12,247 Changes in the fair value of cash flow hedges - 375 - 375 - 375 Revaluation of investments to FVOCI - (404) - (404) - (404) Movement in currency translation reserve - 87 - 87 - 87 Total comprehensive income for the financial year - 58 (11,781) 24,028 12,305 - 12,305 Employee share-based payments expense - 1,597 - - 1,597 - 1,597 Settlement of performance rights & SAR’s - (575) - - (575) - (575) Acquisition of treasury shares - 304 - - 304 - 304 Ordinary shares issued, net of cost 304 - - - 304 - 304 Dividends - - - (31,880) (31,880) - (31,880) Balance as at 30 June 2025 150,399 8,625 (158,640) 64,914 65,298 - 65,298 BALANCE AS AT 1 JULY 2025 150,399 8,625 (158,640) 64,914 65,298 - 65,298 Profit/(loss) for the financial year - - (18,928) 29,577 10,649 469 11,118 Changes in the fair value of cash flow hedges - 625 - - 625 - 625 Revaluation of investments to FVOCI - (172) - - (172) - (172) Movement in currency translation reserve - (41) - - (41) - (41) Total comprehensive income for the financial year - 412 (18,928) 29,577 11,061 469 11,530 Employee share-based payments expense - 1,500 - - 1,500 - 1,500 Settlement of performance rights - (894) - - (894) - (894) Acquisition of treasury shares - 306 - - 306 - 306 Ordinary shares issued, net of costs 306 - - - 306 - 306 Dividends - - - (33,244) (33,244) - (33,244) Equity settled consideration reserve - 21,768 - - 21,768 - 21,768 Non-controlling interests on acquisition of Cue Energy Resources (Cue) - - - - - 27,921 27,921 Impact of new share issue by Cue - (60) - - (60) - (60) Impact of additional shares acquired by the Group in Cue - - - - - (1,152) (1,152) Balance as at 30 June 2026 150,705 31,657 (177,568) 61,247 66,041 27,238 93,279 1 The profit reserve balance reflects the Parent entity’s retained earnings, with the residual Group profit/loss reflected in the accumulated losses reserve. The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
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Horizon Oil Annual Report 2026 55 HORIZON OIL LIMITED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2026 CONSOLIDATED NOTE 2026 US$’000 2025 US$’000 CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers 95,743 98,458 Payments to suppliers and employees (40,580) (47,599) 55,163 50,859 Dividends received from joint venture in Thailand 4,048 - Interest received 1,545 1,487 Interest paid (4,927) (3,247) Income and royalty taxes paid (8,594) (12,485) Acquisition related transaction costs - (727) Net cash inflow from operating activities 33 47,235 35,887 CASH FLOWS FROM INVESTING ACTIVITIES Payments for Thailand acquisition (23,046) (1,500) Payment for Cue acquisition - net of cash acquired (1,717) - Transaction costs on acquisitions (791) - Loan advanced to associate (5,000) - Repayment of loan by associate 1,828 - Payments for oil and gas assets (7,448) (15,018) Payments for plant and equipment (9) (7) Net cash outflow from investing activities (36,183) (16,525) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from amended debt facility 31,469 - Transaction costs incurred on borrowings (1,250) - Repayment for borrowings (10,567) - Payments under leasing arrangements (147) (180) Proceeds from new share issue (net of costs) 306 304 Payments for shares acquired by the Trust (306) (304) Dividends paid to shareholders (33,112) (31,881) Net cash outflow from financing activities (13,607) (32,061) NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (2,555) (12,700) Cash and cash equivalents at the beginning of the financial year 39,782 52,570 Effects of exchange rate changes on cash and cash equivalents held in foreign currencies 173 (89) Cash and cash equivalents at the end of the financial year 7 37,400 39,782 The above consolidated statement of cash flows should be read in conjunction with the accompanying notes. HORIZON OIL LIMITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 30 JUNE 2026 ATTRIBUTABLE TO MEMBERS OF HORIZON CONTRIBUTED EQUITY RESERVES ACCUMULATED LOSSES PROFIT RESERVE1 TOTAL NON- CONTROLLING INTEREST (NCI) TOTAL EQUITY US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 US$000 BALANCE AS AT 1 JULY 2024 150,095 7,241 (146,859) 72,766 83,243 - 83,243 Profit/(loss) for the financial year - - (11,781) 24,208 12,247 - 12,247 Changes in the fair value of cash flow hedges - 375 - 375 - 375 Revaluation of investments to FVOCI - (404) - (404) - (404) Movement in currency translation reserve - 87 - 87 - 87 Total comprehensive income for the financial year - 58 (11,781) 24,028 12,305 - 12,305 Employee share-based payments expense - 1,597 - - 1,597 - 1,597 Settlement of performance rights & SAR’s - (575) - - (575) - (575) Acquisition of treasury shares - 304 - - 304 - 304 Ordinary shares issued, net of cost 304 - - - 304 - 304 Dividends - - - (31,880) (31,880) - (31,880) Balance as at 30 June 2025 150,399 8,625 (158,640) 64,914 65,298 - 65,298 BALANCE AS AT 1 JULY 2025 150,399 8,625 (158,640) 64,914 65,298 - 65,298 Profit/(loss) for the financial year - - (18,928) 29,577 10,649 469 11,118 Changes in the fair value of cash flow hedges - 625 - - 625 - 625 Revaluation of investments to FVOCI - (172) - - (172) - (172) Movement in currency translation reserve - (41) - - (41) - (41) Total comprehensive income for the financial year - 412 (18,928) 29,577 11,061 469 11,530 Employee share-based payments expense - 1,500 - - 1,500 - 1,500 Settlement of performance rights - (894) - - (894) - (894) Acquisition of treasury shares - 306 - - 306 - 306 Ordinary shares issued, net of costs 306 - - - 306 - 306 Dividends - - - (33,244) (33,244) - (33,244) Equity settled consideration reserve - 21,768 - - 21,768 - 21,768 Non-controlling interests on acquisition of Cue Energy Resources (Cue) - - - - - 27,921 27,921 Impact of new share issue by Cue - (60) - - (60) - (60) Impact of additional shares acquired by the Group in Cue - - - - - (1,152) (1,152) Balance as at 30 June 2026 150,705 31,657 (177,568) 61,247 66,041 27,238 93,279 1 The profit reserve balance reflects the Parent entity’s retained earnings, with the residual Group profit/loss reflected in the accumulated losses reserve. The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
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Horizon Oil Annual Report 2026 56 C. Principles of consolidation Subsidiaries The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Horizon Oil Limited (the 'Company’ or 'Parent Entity') as at 30 June 2026 and the results of all subsidiaries for the financial year then ended. Horizon Oil Limited and its subsidiaries together are referred to in these financial statements as ‘the Group’. Subsidiaries are those entities (including special purpose entities) over which the Group has control. Control exists when the Company is exposed to, or has the rights to, variable returns from its involvement and has the ability to affect those return s through its power over that entity. There is a general presumption that a majority of voting rights results in control. The existence and effect of potential voting rights that are currently exercisable or convertible are also considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases. The acquisition method of accounting is used to account for business combinations by the Group (refer to Note 1( M)). Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Investments in subsidiaries are accounted for at cost in the individual financial statements of the respective parent entity. These investments may have subsequently been written down to their recoverable amount determined by reference to the net assets of the subsidiaries as at 30 June each financial year where this is less than cost. Non-controlling interests’ share of the profits and equity of subsidiaries are shown separately in the consolidated statements of comprehensive income, statement of financial position and statement of changes in equity respectively. Joint operations A joint operation is a joint arrangement whereby the participants that have joint control of the arrangement (i.e. joint operators) have rights to the assets, and obligations for the liabilities, relating to the arrangement. The Group recognises assets, liabilities, revenues and expenses according to its share in the assets, liabilities, revenues and expenses of a joint operation or similar as determined and specified in contractual arrangements (Joint Operating Agreements). Details of major joint operation interests and the sum of the Group’s interests in joint operation assets, liabilities, revenue and expenses are set out in Note 24. Where part of a joint operation interest is farmed out in consideration of the farmee undertaking to incur further expenditure o n b e h a l f o f b o t h t h e f a r mee and the entity in the joint operation area of interest, exploration expenditure incurred and carried forward prior to farm -out continues to be carried forward without adjustment, unless the terms of the farm -out are excessive based on the diluted interest retained. An impairment provision is then made to reduce exploration expenditure to its estimated recoverable amount. Any cash received in consideration for farming out part of a joint operation interest is recognised in the profit or loss. Joint ventures A joint venture is a joint arrangement whereby the participants that have j oint control of the arrangement have rights to the net assets of the arrangement. T h e G r o u p r e c o g n i s es i t s i n te r e st i n j o i n t v e n t u re s u s i n g t h e e q u i t y m et h o d o f a c c o u n t i n g . Un d e r th e e q u i t y met h o d , t he investment in a joint venture is initially recognised in the Group’s statement of financial position at cost and adjusted thereafter to recognise the post-acquisition changes to the Group’s share of net assets of the joint venture. After application of the equity method, the Group determines whether it is necessary to recognise any impairment loss with respect to the Group’s net investment in the joint venture. The Group’s share of the joint venture’s post -acquisition profits or losses is recognised in the income statement. Dividends receivable from the joint venture reduce the carrying amount of the investment in the consolidated financial statements of the Group. Notes to the consolidated Financial Statements Note 1 Summary of Material Accounting Policies A summary of the material accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied, unless otherwise stated. The financial statements are for the consolidated entity consisting of Horizon Oil Limit e d a n d i t s s u b s i d i a r i e s ( t h e ‘ G r o u p ’ ) . F o r t h e p u r p o s e s o f p r e p a r i n g t h e f i n a n c i a l statements, the consolidated entity is a for-profit entity. The nature of the operations and principal activities for the Group are described in the Directors’ Report. A. Statement of compliance These general purpose financial statements have been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board (‘AASB’), Urgent Issues Group Interpretations and the Corporations Act 2001. The consolidated financial statements comply with Australian Accounting Standards as issued by the AASB and International Financial Reporting Standards (‘IFRS’) as issued by the International Accounting Standards Board (‘IASB’). B. Basis of preparation T h e s e f i n a n c i a l s t a t e m e n t s a r e p r e s e n t e d i n U n i t e d S t a t e s d o l l a r s a n d h a v e b e e n p r e p a r e d u n d e r t h e h i s t o r i c a l c o s t convention, as modified by the revaluation of financial assets and liabilities (including derivative instruments) at fair val ue through profit or loss, or other comprehensive income where hedge accounting is adopted. The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2026/183 and accordingly amounts in the financial statements are rounded off to the nearest thousand dollars, unless otherwise indicated. The general purpose financial statements for the year ended 30 June 20 26 have been prepared on a going concern basis which contemplates the realisation of assets and settlement of liabilities in the normal course of business as they become due. At the date of this report, the directors are of the opinion that no asset is likely to be realised for amounts less than the amount at which it is recorded in the financial report as at 30 June 202 6. Accordingly, no adjustments have been made to the financial report relating to the recoverability and classification of the asset carrying amounts or the amounts and classification of liabilities that might be necessary should the Group not continue as a going concern. New and amended standards adopted by the Group There were no new and revised Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) that were relevant to its operations and effective for the financial year ended 30 June 20 26. There are no other Australian Accounting Standards that are not yet effective and that are expected to have a material impact on the Group in the current or future financial years. Critical accounting estimates T h e p r e p a r a t i o n o f f i n a n c i a l s t a t e m e n t s r e q u i r e s t h e u s e o f c e r t a i n c r i t i c a l a c c o u n t i n g e s t i m a t e s . I t a l s o r e q u i r e s management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of ju dgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 2. Changes in accounting estimates During the year, the Group changed the reserve basis used in calculating the amortisation of the Maari production asset under the unit of production method, from proved and probable reserves to proved reserves. The reserve estimates applied to all other pr oduction assets were consistent with those used in the prior year. As a result of this change in accounting estimate, an additional amortisation charge of US$6.9 million was recognised in the statement of profit or loss for the year.
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Horizon Oil Annual Report 2026 57 C. Principles of consolidation Subsidiaries The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Horizon Oil Limited (the 'Company’ or 'Parent Entity') as at 30 June 2026 and the results of all subsidiaries for the financial year then ended. Horizon Oil Limited and its subsidiaries together are referred to in these financial statements as ‘the Group’. Subsidiaries are those entities (including special purpose entities) over which the Group has control. Control exists when the Company is exposed to, or has the rights to, variable returns from its involvement and has the ability to affect those return s through its power over that entity. There is a general presumption that a majority of voting rights results in control. The existence and effect of potential voting rights that are currently exercisable or convertible are also considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases. The acquisition method of accounting is used to account for business combinations by the Group (refer to Note 1( M)). Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Investments in subsidiaries are accounted for at cost in the individual financial statements of the respective parent entity. These investments may have subsequently been written down to their recoverable amount determined by reference to the net assets of the subsidiaries as at 30 June each financial year where this is less than cost. Non-controlling interests’ share of the profits and equity of subsidiaries are shown separately in the consolidated statements of comprehensive income, statement of financial position and statement of changes in equity respectively. Joint operations A joint operation is a joint arrangement whereby the participants that have joint control of the arrangement (i.e. joint operators) have rights to the assets, and obligations for the liabilities, relating to the arrangement. The Group recognises assets, liabilities, revenues and expenses according to its share in the assets, liabilities, revenues and expenses of a joint operation or similar as determined and specified in contractual arrangements (Joint Operating Agreements). Details of major joint operation interests and the sum of the Group’s interests in joint operation assets, liabilities, revenue and expenses are set out in Note 24. Where part of a joint operation interest is farmed out in consideration of the farmee undertaking to incur further expenditure o n b e h a l f o f b o t h t h e f a r mee and the entity in the joint operation area of interest, exploration expenditure incurred and carried forward prior to farm -out continues to be carried forward without adjustment, unless the terms of the farm -out are excessive based on the diluted interest retained. An impairment provision is then made to reduce exploration expenditure to its estimated recoverable amount. Any cash received in consideration for farming out part of a joint operation interest is recognised in the profit or loss. Joint ventures A joint venture is a joint arrangement whereby the participants that have j oint control of the arrangement have rights to the net assets of the arrangement. T h e G r o u p r e c o g n i s es i t s i n te r e st i n j o i n t v e n t u re s u s i n g t h e e q u i t y m et h o d o f a c c o u n t i n g . Un d e r th e e q u i t y met h o d , t he investment in a joint venture is initially recognised in the Group’s statement of financial position at cost and adjusted thereafter to recognise the post-acquisition changes to the Group’s share of net assets of the joint venture. After application of the equity method, the Group determines whether it is necessary to recognise any impairment loss with respect to the Group’s net investment in the joint venture. The Group’s share of the joint venture’s post -acquisition profits or losses is recognised in the income statement. Dividends receivable from the joint venture reduce the carrying amount of the investment in the consolidated financial statements of the Group. Notes to the consolidated Financial Statements Note 1 Summary of Material Accounting Policies A summary of the material accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied, unless otherwise stated. The financial statements are for the consolidated entity consisting of Horizon Oil Limit e d a n d i t s s u b s i d i a r i e s ( t h e ‘ G r o u p ’ ) . F o r t h e p u r p o s e s o f p r e p a r i n g t h e f i n a n c i a l statements, the consolidated entity is a for-profit entity. The nature of the operations and principal activities for the Group are described in the Directors’ Report. A. Statement of compliance These general purpose financial statements have been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board (‘AASB’), Urgent Issues Group Interpretations and the Corporations Act 2001. The consolidated financial statements comply with Australian Accounting Standards as issued by the AASB and International Financial Reporting Standards (‘IFRS’) as issued by the International Accounting Standards Board (‘IASB’). B. Basis of preparation T h e s e f i n a n c i a l s t a t e m e n t s a r e p r e s e n t e d i n U n i t e d S t a t e s d o l l a r s a n d h a v e b e e n p r e p a r e d u n d e r t h e h i s t o r i c a l c o s t convention, as modified by the revaluation of financial assets and liabilities (including derivative instruments) at fair val ue through profit or loss, or other comprehensive income where hedge accounting is adopted. The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2026/183 and accordingly amounts in the financial statements are rounded off to the nearest thousand dollars, unless otherwise indicated. The general purpose financial statements for the year ended 30 June 20 26 have been prepared on a going concern basis which contemplates the realisation of assets and settlement of liabilities in the normal course of business as they become due. At the date of this report, the directors are of the opinion that no asset is likely to be realised for amounts less than the amount at which it is recorded in the financial report as at 30 June 202 6. Accordingly, no adjustments have been made to the financial report relating to the recoverability and classification of the asset carrying amounts or the amounts and classification of liabilities that might be necessary should the Group not continue as a going concern. New and amended standards adopted by the Group There were no new and revised Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) that were relevant to its operations and effective for the financial year ended 30 June 20 26. There are no other Australian Accounting Standards that are not yet effective and that are expected to have a material impact on the Group in the current or future financial years. Critical accounting estimates T h e p r e p a r a t i o n o f f i n a n c i a l s t a t e m e n t s r e q u i r e s t h e u s e o f c e r t a i n c r i t i c a l a c c o u n t i n g e s t i m a t e s . I t a l s o r e q u i r e s management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of ju dgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 2. Changes in accounting estimates During the year, the Group changed the reserve basis used in calculating the amortisation of the Maari production asset under the unit of production method, from proved and probable reserves to proved reserves. The reserve estimates applied to all other pr oduction assets were consistent with those used in the prior year. As a result of this change in accounting estimate, an additional amortisation charge of US$6.9 million was recognised in the statement of profit or loss for the year.
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Horizon Oil Annual Report 2026 58 Revenue from Block 22/12, China, is derived at a point in time as the crude oil is produced into a metered pipeline, stored and subsequently sold in individual liftings which are pursuant to individual sales contracts. Each lifting is invoiced in accordance with the respective contract and revenue recognised based on the bill of lading date associated with the lifting. Once the lifting is complete there are no unsatisfied performance obligations or variable revenue requiring estimation. Revenue from the Maari/Manaia fields, New Zealand, is derived at a point in time as the crude oil produced is stored and sold in individual liftings which are pursuant to individual sales contracts. Each lifting is invoiced in accordance with the respective contract and revenue recognised based on the bill of lading date associated with the lifting. Once the lifting is complete there are no unsatisfied performance obligations or variable revenue requiring estimation. Revenue from Mereenie oil sales, Australia is derived at a point in time as the crude oil produced is stored and sold in individual liftings. Each lifting is invoiced in accordance with the respective contract and revenue recognised based on the bill of lading date associated with the lifting. O nce the lifting is complete there are no unsatisfied performance obligations or variable revenue requiring estimation. Revenue from Mereenie gas sales is derived over a period in time based on gas volumes sold under contracts with customers which continuously flows through a metered pipeline. The metered monthly production is invoiced at the end of each month, in accordance with a monthly sales contract, and revenue recognised for the month of production. At the end of each month, once billing occurs and revenue is recognised, there are no unsatisfied performance obligations or variable revenue requiring estimation. Crude oil revenues from Cue Energy Resources are derived from Maari field in New Zealand, Sampang field in Indonesia and the Mereenie field (Australia). Revenue from oil sales is derived at a point in time as the crude oil produced is stored and sold in individual liftings. Each lifting is invoiced in accordance with the respective contract and revenue recognised based on the bill of lading date associate d w i t h t h e l i f t i n g . O n c e t h e l i f t i n g i s c o m p l e t e t h e r e a r e n o u n s a t i s f i e d p e r f o r m a n c e obligations or variable revenue requiring estimation. Gas revenues from Cue Energy Resources are derived from Mereenie, Palm Valley and Dingo fields in Australia and Sampang field in Indonesia and derived over a period in time based on gas volumes sold under contracts with customers which continuously flow through a metered pipeline. The metered monthly production is invoiced at the end of each month, in accordance with a monthly sales contract, and revenue recognised for the month of production. At the end of each month, once billing occurs and revenue is recognised, there are no unsatisfied performance obligations or variable revenue requiring estimation. The Group recognises contract liabilities for consideration received in respect of unsatisfied performance obligations and reports these amounts as other liabilities in the statement of financial position. Similarly, if the Group satisfies a performance obligation before it receives the consideration, the Group recognises either a contract asset or a receivable in its statement of financial position, depending on whether something other than the passage of time is required before the consideration is due. H. Taxation [[ii]] Income tax The income tax expense or revenue for the reporting period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to te m p o r a r y d i f f e r e n c e s b e t w e e n t h e t a x b a s e s o f a s s e t s a n d l i a b i l i t i e s a n d t h e i r c a r r y i n g a m o u n t s i n t h e f i n a n c i a l statements, and to unused tax losses. The current income tax charge is calculated on the basis of the tax laws enacted or substantially enacted at the end of the reporting period in the countries where the Company’s subsidiaries operate and generate taxable income. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised, or deferred income tax liability is settled. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is prob able that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases o f i n v e s t m e n t s i n s u b s i d i a r i e s w h e r e t h e p a r e n t e n t i t y i s a b l e t o c o n t r o l t h e t i m i n g o f t h e r e v e r s a l o f t h e t e m p o r a r y differences and it is probable that the differences will not reverse in the foreseeable future. D. Crude oil and gas inventory and materials in inventory Crude oil and gas inventories, produced but not sold, are valued at the lower of cost and net realisable value. Cost comprises a relevant proportion of all fixed and variable production, overhead, restoration and amortisation expenses and is determined on an average cost basis. Stocks of materials inventory, consumable stores and spare parts are carried at the lower of cost and net realisable value, with cost primarily determined on a weighted average cost basis. E. Operating segment reporting Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors. F. Foreign currency translation [[ii]] Functional and presentation currency Items included in the financial statements of each of the Group’s subsidiaries are measured using the currency of the primary economic environment in which the subsidiary operates (the ‘functional currency’). The consolidated financial statements are presented in United States dollars, which is Horizon’s presentation currency. Horizon has selected United States dollars as its presentation currency for the following reasons: (a) a significant portion of Horizon’s activity is denominated in United States dollars; and (b) it is widely understood by Australian and international investors and analysts. [[iiii]] Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at financial year end exchange rates of monetary assets and liabilities denominated in foreign currencies are g e n e r a l l y r e c o g n i s e d i n t h e p r o f i t o r l o s s . T h e y a r e d e f e r r e d i n e q u i t y i f t h e y r e l a t e t o q u a l i f y i n g c a s h f l o w h e d g e s a n d qualifying net investment hedges or are attributable to part of the net investment in a foreign operation. [[iiiiii]] Group companies All Group subsidiaries, except for Horizon Australia Energy Pty Ltd and Cue Energy Resources Limited have functional currencies of United States dollars . Horizon Australia Energy Pty Ltd and Cue Energy Resources Limited have a functional currency of Australian dollars (AUD). The results and financial position of these entities have a functional currency different from the presentation currency and are translated into the presentation currency as follows: – assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position; – income and expenses for each statement of profit or loss and statement of comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and – all resulting exchange differences are recognised in other comprehensive income. G. Revenue recognition Revenue arises from the sale of crude oil and gas. To determine whether to recognise revenue, the Group follows a 5 -step process: [1] - Identifying the contract with a customer; [2] - Identifying the performance obligations; [3] - Determining the transaction price; [4] - Allocating the transaction price to the performance obligations; and [5] - Recognising revenue when/as performance obligation(s) are satisfied. The Group enters into sales transactions involving two products. The total transaction price for a contract is allocated amongst the various performance obligations based on their relative stand -alone selling prices. The transaction price for a contract excludes any amounts collected on behalf of third parties. Rev enue is recognised either at a point in time or over time, when (or as) the Group satisfies performance obligations by transferring the promised goods to its customers.
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Horizon Oil Annual Report 2026 59 Revenue from Block 22/12, China, is derived at a point in time as the crude oil is produced into a metered pipeline, stored and subsequently sold in individual liftings which are pursuant to individual sales contracts. Each lifting is invoiced in accordance with the respective contract and revenue recognised based on the bill of lading date associated with the lifting. Once the lifting is complete there are no unsatisfied performance obligations or variable revenue requiring estimation. Revenue from the Maari/Manaia fields, New Zealand, is derived at a point in time as the crude oil produced is stored and sold in individual liftings which are pursuant to individual sales contracts. Each lifting is invoiced in accordance with the respective contract and revenue recognised based on the bill of lading date associated with the lifting. Once the lifting is complete there are no unsatisfied performance obligations or variable revenue requiring estimation. Revenue from Mereenie oil sales, Australia is derived at a point in time as the crude oil produced is stored and sold in individual liftings. Each lifting is invoiced in accordance with the respective contract and revenue recognised based on the bill of lading date associated with the lifting. O nce the lifting is complete there are no unsatisfied performance obligations or variable revenue requiring estimation. Revenue from Mereenie gas sales is derived over a period in time based on gas volumes sold under contracts with customers which continuously flows through a metered pipeline. The metered monthly production is invoiced at the end of each month, in accordance with a monthly sales contract, and revenue recognised for the month of production. At the end of each month, once billing occurs and revenue is recognised, there are no unsatisfied performance obligations or variable revenue requiring estimation. Crude oil revenues from Cue Energy Resources are derived from Maari field in New Zealand, Sampang field in Indonesia and the Mereenie field (Australia). Revenue from oil sales is derived at a point in time as the crude oil produced is stored and sold in individual liftings. Each lifting is invoiced in accordance with the respective contract and revenue recognised based on the bill of lading date associate d w i t h t h e l i f t i n g . O n c e t h e l i f t i n g i s c o m p l e t e t h e r e a r e n o u n s a t i s f i e d p e r f o r m a n c e obligations or variable revenue requiring estimation. Gas revenues from Cue Energy Resources are derived from Mereenie, Palm Valley and Dingo fields in Australia and Sampang field in Indonesia and derived over a period in time based on gas volumes sold under contracts with customers which continuously flow through a metered pipeline. The metered monthly production is invoiced at the end of each month, in accordance with a monthly sales contract, and revenue recognised for the month of production. At the end of each month, once billing occurs and revenue is recognised, there are no unsatisfied performance obligations or variable revenue requiring estimation. The Group recognises contract liabilities for consideration received in respect of unsatisfied performance obligations and reports these amounts as other liabilities in the statement of financial position. Similarly, if the Group satisfies a performance obligation before it receives the consideration, the Group recognises either a contract asset or a receivable in its statement of financial position, depending on whether something other than the passage of time is required before the consideration is due. H. Taxation [[ii]] Income tax The income tax expense or revenue for the reporting period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to te m p o r a r y d i f f e r e n c e s b e t w e e n t h e t a x b a s e s o f a s s e t s a n d l i a b i l i t i e s a n d t h e i r c a r r y i n g a m o u n t s i n t h e f i n a n c i a l statements, and to unused tax losses. The current income tax charge is calculated on the basis of the tax laws enacted or substantially enacted at the end of the reporting period in the countries where the Company’s subsidiaries operate and generate taxable income. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised, or deferred income tax liability is settled. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is prob able that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases o f i n v e s t m e n t s i n s u b s i d i a r i e s w h e r e t h e p a r e n t e n t i t y i s a b l e t o c o n t r o l t h e t i m i n g o f t h e r e v e r s a l o f t h e t e m p o r a r y differences and it is probable that the differences will not reverse in the foreseeable future.
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Horizon Oil Annual Report 2026 60 L. Trade receivables Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for doubtful debts. Trade receivables are generally due for settlement within 30 days from the date of recognition. They are included in current assets, except for those with maturities greater than one year after the end of the reporting period which are classified as non-current assets. The group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. The expected loss rates are based on the payment profiles of sales over a period of 36 months before 30 June 2026 and the corresponding historical credit losses experienced within this period. The historical rates are adjusted to reflect current and forward-looking information on key factors affecting the ability of the customers to settle the receivables. Management assesses the collectability of these amounts based on the customer relationships and historical payment behaviour. M. Business combinations The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair values of th e assets transferred, the liabilities assumed, equity interests issued by the Group, fair value of any asset or liability resulting from a contingent consideration arrangement, and fair value of any pre -existing equity interest in the subsidiary. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. Acquisition related costs are expensed as incurred. The group recognises non-controlling interests in an acquired entity at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets. For purchase combinations which do not constitute the acquisition of a business, the Group identifies and recognises the individual identifiable assets acquired and liabilities assumed. The consideration paid is allocated to the individual identifiable assets and liabilities on the basis of their relative fair values at the date of purchase. Acquisition related costs are capitalised. N. Exploration phase expenditure Exploration phase expenditure in respect of each area of interest is accounted for using the successful efforts method of a c c o u n t i n g . T h e s u c c e s sf u l e f f o r ts m e th o d r e q u i r es a l l e x p l o r at i o n p h a s e ex p en d i tu r e t o b e e x p en se d i n t h e pe r i o d i t i s incurred, exc e p t t h e c o s t s o f s u c c e s s f u l w e l l s , t h e c o s t s o f a c q u i r i n g i n t e r e s t s i n n e w e x p l o r a t i o n a s s e t s a n d p r e- development costs where there is a high degree of probability that the development will go ahead, which are capitalised. Costs directly associated with t he drilling of exploration wells and any associated geophysical and geological costs are initially capitalised pending determination of whether potentially economic reserves of hydrocarbons have been discovered. Business development costs such as the review of farm in opportunities and bid rounds are expensed in the period in which they are incurred. Areas of interest are recognised at the cash -generating unit level, being the smallest grouping of assets generating independent cash flows which usually is represented by an individual oil or gas field. When an oil or gas field has been approved for development, the capitalised exploration phase expenditure is reclassified as oil and gas assets in the statement of financial position. Prior to reclassification, capitalised exploration phase expenditure is assessed for impairment. W h e r e a n o w n e r s h i p i n t e r e s t i n a n e x p l o r a t i o n a n d e v a l u a t i o n a s s e t i s p u r c h a s e d , a n y c a s h c o n s i d e r a t i o n p a i d n e t o f transaction costs is treated as an asset acquisition. Alternatively, where an ownership interest is sold, any cash consideration received net of transaction costs is treated as a recoupment of costs previously capitalised, with any excess accounted for as a gain on disposal of non-current assets. Impairment of capitalised exploration phase expenditure Exploration phase expenditure is reviewed for impairment semi- annually in accordance with the requirements of AASB 6 Exploration for and Evaluation of Mineral Resources . T h e c a r r y i n g v a l u e o f c a p i t a l i s e d e x p l o r a t i o n p h a s e e x p e n d i t u r e i s assessed for impairment at the asset or cash-generating unit level (which usually is represented by an exploration permit or licence) whenever facts and circumstances (as defined in AASB 6) suggest that the carrying amount of the asset may exceed its recoverable amount. If any indication of impairment exists, an estimate of the asset’s recoverable amount is calculated. An impairment loss exists when the carrying amount of an asset or cash-generating unit exceeds its estimated recoverable amount. The asset or cash -generating unit is then written- down to its recoverable amount. Impairment losses are recognised as an expense in profit or loss. C u r r e n t a n d d e f e r r e d t a x i s r e c o g n i s e d i n p r o f i t o r l o s s , e x c e p t t o t h e e x t e n t t h a t i t r e l a t e s t o i t e m s r e c o g n i s e d i n o t h e r comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. [[iiii]] Government royalties Government royalties are treated as taxation arrangements when they are imposed under Government authority and when the calculation of the amount payable is derived from a measure of profit that falls within the definition of ‘taxable profit’ for the purposes of AASB 112 Income Taxes . Current and deferred tax is then provided on the same basis as described in (i) above. Royalty arrangements that do not meet the criteria for treatment as a tax are recognised on an accruals basis. I. Leases The Group leases an office in Sydney, Melbourne and Indonesia and various equipment, with rental contracts typically taken out for fixed periods of 12 months to 3 years. These contracts do not have a reasonably certain extension option and may contain both lease and non-lease components. The Group allocates the consideration in the contract to the lease and non- lease components based on their relative stand-alone prices. Lease terms are negotiated on an individual basis, and do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the n et present value of the following lease payments: – fixed payments (including in-substance fixed payments), less any lease incentives receivable; and – v a r i a b l e l e a s e p a y m e n t t h a t a r e b a s e d o n a n i n d e x o r a r a t e , i n i t i a l l y m e a s u r e d u s i n g t h e i n d e x o r r a t e a s a t t h e commencement date The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right -of-use asset in a similar economic environment with similar terms, security and conditions. The weighted average lessee’s incremental borrowing rate applied to the lease liabilities is 8.9% (FY25: 8.9%). Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Right-of-use assets are measured at cost and are depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. J. Impairment of assets Assets are reviewed for impairment at each reporting date to determine whether there is any indication of impairment. If an impairment indicator exists a formal estimate of the recoverable amount is calculated. Intangible assets with an indefinite useful life are assessed for impairment regardless of whether there are any indicators of impairment. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairm ent, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (‘cash-generating units’). In assessing the recoverable amount, an asset’s estimated future pre-tax cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Exploration phase expenditure is assessed for impairment in accordance with Note1( N). K. Cash and cash equivalents For presentation purposes in the statement of cash flows, cash and cash equivalents includes cash at banks and on hand (including share of joint operation cash balances), restricted cash held in a Debt Service Reserve Account (DSRA), deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the consolidated statement of financial position.
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Horizon Oil Annual Report 2026 61 L. Trade receivables Trade receivables are recognised initially at fair value and subsequently measured at amortised cost, less provision for doubtful debts. Trade receivables are generally due for settlement within 30 days from the date of recognition. They are included in current assets, except for those with maturities greater than one year after the end of the reporting period which are classified as non-current assets. The group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. The expected loss rates are based on the payment profiles of sales over a period of 36 months before 30 June 2026 and the corresponding historical credit losses experienced within this period. The historical rates are adjusted to reflect current and forward-looking information on key factors affecting the ability of the customers to settle the receivables. Management assesses the collectability of these amounts based on the customer relationships and historical payment behaviour. M. Business combinations The acquisition method of accounting is used to account for all business combinations, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair values of th e assets transferred, the liabilities assumed, equity interests issued by the Group, fair value of any asset or liability resulting from a contingent consideration arrangement, and fair value of any pre -existing equity interest in the subsidiary. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. Acquisition related costs are expensed as incurred. The group recognises non-controlling interests in an acquired entity at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable assets. For purchase combinations which do not constitute the acquisition of a business, the Group identifies and recognises the individual identifiable assets acquired and liabilities assumed. The consideration paid is allocated to the individual identifiable assets and liabilities on the basis of their relative fair values at the date of purchase. Acquisition related costs are capitalised. N. Exploration phase expenditure Exploration phase expenditure in respect of each area of interest is accounted for using the successful efforts method of a c c o u n t i n g . T h e s u c c e s sf u l e f f o r ts m e th o d r e q u i r es a l l e x p l o r at i o n p h a s e ex p en d i tu r e t o b e e x p en se d i n t h e pe r i o d i t i s incurred, exc e p t t h e c o s t s o f s u c c e s s f u l w e l l s , t h e c o s t s o f a c q u i r i n g i n t e r e s t s i n n e w e x p l o r a t i o n a s s e t s a n d p r e- development costs where there is a high degree of probability that the development will go ahead, which are capitalised. Costs directly associated with t he drilling of exploration wells and any associated geophysical and geological costs are initially capitalised pending determination of whether potentially economic reserves of hydrocarbons have been discovered. Business development costs such as the review of farm in opportunities and bid rounds are expensed in the period in which they are incurred. Areas of interest are recognised at the cash -generating unit level, being the smallest grouping of assets generating independent cash flows which usually is represented by an individual oil or gas field. When an oil or gas field has been approved for development, the capitalised exploration phase expenditure is reclassified as oil and gas assets in the statement of financial position. Prior to reclassification, capitalised exploration phase expenditure is assessed for impairment. W h e r e a n o w n e r s h i p i n t e r e s t i n a n e x p l o r a t i o n a n d e v a l u a t i o n a s s e t i s p u r c h a s e d , a n y c a s h c o n s i d e r a t i o n p a i d n e t o f transaction costs is treated as an asset acquisition. Alternatively, where an ownership interest is sold, any cash consideration received net of transaction costs is treated as a recoupment of costs previously capitalised, with any excess accounted for as a gain on disposal of non-current assets. Impairment of capitalised exploration phase expenditure Exploration phase expenditure is reviewed for impairment semi- annually in accordance with the requirements of AASB 6 Exploration for and Evaluation of Mineral Resources . T h e c a r r y i n g v a l u e o f c a p i t a l i s e d e x p l o r a t i o n p h a s e e x p e n d i t u r e i s assessed for impairment at the asset or cash-generating unit level (which usually is represented by an exploration permit or licence) whenever facts and circumstances (as defined in AASB 6) suggest that the carrying amount of the asset may exceed its recoverable amount. If any indication of impairment exists, an estimate of the asset’s recoverable amount is calculated. An impairment loss exists when the carrying amount of an asset or cash-generating unit exceeds its estimated recoverable amount. The asset or cash -generating unit is then written- down to its recoverable amount. Impairment losses are recognised as an expense in profit or loss. C u r r e n t a n d d e f e r r e d t a x i s r e c o g n i s e d i n p r o f i t o r l o s s , e x c e p t t o t h e e x t e n t t h a t i t r e l a t e s t o i t e m s r e c o g n i s e d i n o t h e r comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. [[iiii]] Government royalties Government royalties are treated as taxation arrangements when they are imposed under Government authority and when the calculation of the amount payable is derived from a measure of profit that falls within the definition of ‘taxable profit’ for the purposes of AASB 112 Income Taxes . Current and deferred tax is then provided on the same basis as described in (i) above. Royalty arrangements that do not meet the criteria for treatment as a tax are recognised on an accruals basis. I. Leases The Group leases an office in Sydney, Melbourne and Indonesia and various equipment, with rental contracts typically taken out for fixed periods of 12 months to 3 years. These contracts do not have a reasonably certain extension option and may contain both lease and non-lease components. The Group allocates the consideration in the contract to the lease and non- lease components based on their relative stand-alone prices. Lease terms are negotiated on an individual basis, and do not impose any covenants other than the security interests in the leased assets that are held by the lessor. Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the n et present value of the following lease payments: – fixed payments (including in-substance fixed payments), less any lease incentives receivable; and – v a r i a b l e l e a s e p a y m e n t t h a t a r e b a s e d o n a n i n d e x o r a r a t e , i n i t i a l l y m e a s u r e d u s i n g t h e i n d e x o r r a t e a s a t t h e commencement date The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, the lessee’s incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right -of-use asset in a similar economic environment with similar terms, security and conditions. The weighted average lessee’s incremental borrowing rate applied to the lease liabilities is 8.9% (FY25: 8.9%). Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Right-of-use assets are measured at cost and are depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. J. Impairment of assets Assets are reviewed for impairment at each reporting date to determine whether there is any indication of impairment. If an impairment indicator exists a formal estimate of the recoverable amount is calculated. Intangible assets with an indefinite useful life are assessed for impairment regardless of whether there are any indicators of impairment. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairm ent, assets are grouped at the lowest levels for which there are separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (‘cash-generating units’). In assessing the recoverable amount, an asset’s estimated future pre-tax cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Exploration phase expenditure is assessed for impairment in accordance with Note1( N). K. Cash and cash equivalents For presentation purposes in the statement of cash flows, cash and cash equivalents includes cash at banks and on hand (including share of joint operation cash balances), restricted cash held in a Debt Service Reserve Account (DSRA), deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the consolidated statement of financial position.
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Horizon Oil Annual Report 2026 62 Where there is a change in the expected restoration, rehabilitation or decommissioning costs, an adjustment is recorded against the carrying value of the provision and any related restoration asset, and the effects are recognised in profit or lo ss on a prospective basis over the remaining life of the operation. The unwinding of the effect of discounting on the restoration provision is included within finance costs in profit or loss. [[vv]] Reserves The estimated reserves include those determined on an annual basis by Mr Gavin Douglas, Chief Operating Officer of Horizon. Mr Douglas is a full- time employee of Horizon and is a member of the American Association of Petroleum Geologists. Mr Douglas’ qualifications include a Master of Reservoir Evaluation and Management from the Heriot Watt University, UK and more than 30 years of relevant experience. The reserve estimates are determined by Mr Douglas based on assumptions, interpretations, and assessments. These include assumptions regarding commodity prices, foreign exchange rates, operating costs and capital expenditures, and interpretations of geological and geophysical models to make assessments of the quantity of hydrocarbons and anticipated recoveries. P. Investments and other financial assets Subsidiaries are accounted for in the consolidated financial statements as set out in Note 1(C). Loans and receivables are non -derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor with no intention of selling the receivable. They are included in current assets, except for those with maturities greater than 12 months after the end of the reporting period which are classified as non -current assets. Loans and receivables are included in receivables in the statement of financial position. The Group classifies other financial assets in the following measurement categories: – those to be measured subsequently at fair value (either through other comprehensive income or profit or loss), and – those to be measured at amortised cost For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. Equity instruments A t i n i t i a l r e c o g n i t i o n , G r o u p ’ s m a n a g e m e n t h a s e l e c t e d t o m e a s u r e i t s e q u i t y i n s t r u m e n t s a t f a i r v a l u e t h r o u g h o t h e r comprehensive income (FVOCI). The group subsequently measures all equity investments as fair value. Where the group’s m a n a g e m e n t h a s e l e c t e d t o p r e s e n t f a i r v a l u e g a i n s a n d l o s s e s o n e q u i t y i n s t r u m e n t s i n O C I , t h e r e i s n o s u b s e q u e n t reclassification of fair value gains and losses to profit or loss following the derecognition or impairment of the investment. Q. Plant and equipment The cost of improvements to, or on, leasehold property is depreciated over the unexpired period of the lease or the estimated useful life of the improvement to the Group, whichever is shorter. Depreciation on other assets is calculated using the straight -line method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives, as follows: – Computer equipment 3 – 4 years – Furniture, fittings and equipment 3 – 10 years The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of the reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss. Capitalised exploration phase expenditure that suffered impairment is tested for possible reversal of the impairment loss whenever facts or changes in circumstances indicate that the impairment may have reversed. O. Oil and gas assets [[ii]] Development expenditure Development expenditure is stated at cost less any accumulated impairment losses. Development expenditure incurred by or on behalf of the Group is accumulated separately for fields in which proven and probable hydrocarbon reserves have been identified to the satisfaction of directors. Such expenditure comprises direct costs and overhead expenditure incurred which can be directly attributable to the development phase or is acquired through the acquisition of a permit. Once a development decision has been taken on an oil or gas field, the carrying amount of the relevant exploration and evaluation expenditure in respect of the relevant area of interest is aggregated with the relevant development expenditure. Development expenditure is reclassified as ‘production assets’ at the end of the commissioning phase, when the oil or gas field is capable of operating in the manner intended by management (that is, when commercial levels of production are capable of being achieved). Development expenditure is tested for impairment in accordance with the accounting policy set out in Note 1(J). [[iiii]] Production assets When further development costs are incurred in respect of a production asset after the commencement of production, such expenditure is carried forward as part of the production asset when it is probable that additional future economic benefits associated with the expenditure will flow to the Group. Otherwise, such expenditure is classified as production expense in income statements when incurred. Production assets are stated at cost less accumulated amortisation and any accumulated impairment losses. Once commercial levels of production commence, amortisation is charged using the unit -of-production method. The unit- of-production method results in an amortisation expense proportional to the depletion of proven and probable hydrocarbon reserves for the field. Production assets are amortised by area of interest in the proportion of actual production for the financial period to the ‘proven and probable’ hydrocarbon reserves or the ‘proven’ hydrocarbon reserves of the field. The cost element of the unit -of-production calculation is the capitalised costs incurred to date for the field together with the estimated / anticipated future development costs (stated at current financial period -end using unescalated prices) of obtaining access to all the ‘proven and probable’ or all the ‘proven’ hydrocarbon reserves included in the unit-of-production calculation. Production assets are tested for impairment in accordance with the accounting policy set out in Note 1( J). [[iiiiii]] Advances paid for restoration works Advances paid for restoration works represent amounts paid to special purpose funds established with the primary objective of meeting future restoration obligations and are recognised and measured in accordance with AASB Interpretation 5 Rights to Interests Arising from Decommissioning, Restoration and Environmental Rehabilitation Funds (AASBI 5). AASBI 5 require s restoration pro visions and contributions to funds to be separately disclosed in the Group’s consolidated statement of financial position. [[iivv]] Restoration provision The estimated costs of decommissioning and removing an asset and restoring the site are included in the cost of the asset as at the date the obligation first arises and to the extent that it is first recognised as a provision. This asset is subsequently amortised on a unit-of-production basis. The corresponding provision is reviewed at the end of each reporting period. The provision is measured at the best estimate of the present value amount required to settle the present obligation at the end of the reporting period, based on current legal and other requirements and technology, discounted where material using market yields at the balance sheet date on Treasury bonds with terms to maturity and currencies that match, as closely as possible, to the estimated future cash outflows.
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Horizon Oil Annual Report 2026 63 Where there is a change in the expected restoration, rehabilitation or decommissioning costs, an adjustment is recorded against the carrying value of the provision and any related restoration asset, and the effects are recognised in profit or lo ss on a prospective basis over the remaining life of the operation. The unwinding of the effect of discounting on the restoration provision is included within finance costs in profit or loss. [[vv]] Reserves The estimated reserves include those determined on an annual basis by Mr Gavin Douglas, Chief Operating Officer of Horizon. Mr Douglas is a full- time employee of Horizon and is a member of the American Association of Petroleum Geologists. Mr Douglas’ qualifications include a Master of Reservoir Evaluation and Management from the Heriot Watt University, UK and more than 30 years of relevant experience. The reserve estimates are determined by Mr Douglas based on assumptions, interpretations, and assessments. These include assumptions regarding commodity prices, foreign exchange rates, operating costs and capital expenditures, and interpretations of geological and geophysical models to make assessments of the quantity of hydrocarbons and anticipated recoveries. P. Investments and other financial assets Subsidiaries are accounted for in the consolidated financial statements as set out in Note 1(C). Loans and receivables are non -derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to a debtor with no intention of selling the receivable. They are included in current assets, except for those with maturities greater than 12 months after the end of the reporting period which are classified as non -current assets. Loans and receivables are included in receivables in the statement of financial position. The Group classifies other financial assets in the following measurement categories: – those to be measured subsequently at fair value (either through other comprehensive income or profit or loss), and – those to be measured at amortised cost For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. Equity instruments A t i n i t i a l r e c o g n i t i o n , G r o u p ’ s m a n a g e m e n t h a s e l e c t e d t o m e a s u r e i t s e q u i t y i n s t r u m e n t s a t f a i r v a l u e t h r o u g h o t h e r comprehensive income (FVOCI). The group subsequently measures all equity investments as fair value. Where the group’s m a n a g e m e n t h a s e l e c t e d t o p r e s e n t f a i r v a l u e g a i n s a n d l o s s e s o n e q u i t y i n s t r u m e n t s i n O C I , t h e r e i s n o s u b s e q u e n t reclassification of fair value gains and losses to profit or loss following the derecognition or impairment of the investment. Q. Plant and equipment The cost of improvements to, or on, leasehold property is depreciated over the unexpired period of the lease or the estimated useful life of the improvement to the Group, whichever is shorter. Depreciation on other assets is calculated using the straight -line method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives, as follows: – Computer equipment 3 – 4 years – Furniture, fittings and equipment 3 – 10 years The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of the reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in profit or loss. Capitalised exploration phase expenditure that suffered impairment is tested for possible reversal of the impairment loss whenever facts or changes in circumstances indicate that the impairment may have reversed. O. Oil and gas assets [[ii]] Development expenditure Development expenditure is stated at cost less any accumulated impairment losses. Development expenditure incurred by or on behalf of the Group is accumulated separately for fields in which proven and probable hydrocarbon reserves have been identified to the satisfaction of directors. Such expenditure comprises direct costs and overhead expenditure incurred which can be directly attributable to the development phase or is acquired through the acquisition of a permit. Once a development decision has been taken on an oil or gas field, the carrying amount of the relevant exploration and evaluation expenditure in respect of the relevant area of interest is aggregated with the relevant development expenditure. Development expenditure is reclassified as ‘production assets’ at the end of the commissioning phase, when the oil or gas field is capable of operating in the manner intended by management (that is, when commercial levels of production are capable of being achieved). Development expenditure is tested for impairment in accordance with the accounting policy set out in Note 1(J). [[iiii]] Production assets When further development costs are incurred in respect of a production asset after the commencement of production, such expenditure is carried forward as part of the production asset when it is probable that additional future economic benefits associated with the expenditure will flow to the Group. Otherwise, such expenditure is classified as production expense in income statements when incurred. Production assets are stated at cost less accumulated amortisation and any accumulated impairment losses. Once commercial levels of production commence, amortisation is charged using the unit -of-production method. The unit- of-production method results in an amortisation expense proportional to the depletion of proven and probable hydrocarbon reserves for the field. Production assets are amortised by area of interest in the proportion of actual production for the financial period to the ‘proven and probable’ hydrocarbon reserves or the ‘proven’ hydrocarbon reserves of the field. The cost element of the unit -of-production calculation is the capitalised costs incurred to date for the field together with the estimated / anticipated future development costs (stated at current financial period -end using unescalated prices) of obtaining access to all the ‘proven and probable’ or all the ‘proven’ hydrocarbon reserves included in the unit-of-production calculation. Production assets are tested for impairment in accordance with the accounting policy set out in Note 1( J). [[iiiiii]] Advances paid for restoration works Advances paid for restoration works represent amounts paid to special purpose funds established with the primary objective of meeting future restoration obligations and are recognised and measured in accordance with AASB Interpretation 5 Rights to Interests Arising from Decommissioning, Restoration and Environmental Rehabilitation Funds (AASBI 5). AASBI 5 require s restoration pro visions and contributions to funds to be separately disclosed in the Group’s consolidated statement of financial position. [[iivv]] Restoration provision The estimated costs of decommissioning and removing an asset and restoring the site are included in the cost of the asset as at the date the obligation first arises and to the extent that it is first recognised as a provision. This asset is subsequently amortised on a unit-of-production basis. The corresponding provision is reviewed at the end of each reporting period. The provision is measured at the best estimate of the present value amount required to settle the present obligation at the end of the reporting period, based on current legal and other requirements and technology, discounted where material using market yields at the balance sheet date on Treasury bonds with terms to maturity and currencies that match, as closely as possible, to the estimated future cash outflows.
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Horizon Oil Annual Report 2026 64 U. Borrowings Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest rate method. Fees paid on the establishment of loan facilities which are not an incremental cost relating to the actual drawdown of the facility, are recognised as prepayments (netted against the loan balance) and amortised on a straight-line basis over the term of the facility. Borrowings are classified as current liabilities unless the Group has a right to defer settlement of the liability for at lea st 12 months after the end of the reporting period. V. Borrowing costs Borrowing costs which includes the costs of arranging and obtaining financing, incurred for the acquisition or construction of any qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed when incurred. No b orrowing costs (2025: $Nil ) were capitalised during the current financial year and the amount of borrowing costs amortised to the income statement were $585,817 (2025: $654,874). W. Employee benefits [[ii]] Wages and salaries and annual leave Liabilities for wages and salaries, including non-monetary benefits, annual leave and related on-costs expected to be settled within 12 months of the end of the reporting period are recognised in other payables in respect of employees' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are recognised in other payables. [[iiii]] Long service leave The liability for long service leave is recognised as a provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period u s i n g t he p rojected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the end of the reporting period on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. [[iiiiii]] Share-based payments Share-based payment compensation benefits are provided to employees and consultants via the Horizon Long -Term Incentive Plan and deferred STI Plan. Information relating to these schemes is set out in Note 28. The fair value of performance rights granted under the Horizon Long -Term Incentive Plan and deferred STI Plan are recognised as an employee share -based payments expense with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the performance rights granted, which includes any market performance conditions but excludes the impact of any service and non -market performance vesting conditions and the impact of any non-vesting conditions. Non-market performance vesting conditions are included in assumptions about the number of performance rights. The fair value is measured at grant date. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the Group revises it s estimates of the number of performance rights that are expected to vest based on the non -market performance vesting conditions. It recognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity. The fair value at grant date is independently determined using either a Black -Scholes or Monte Carlo simulation option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at effective allocation date and expected price volatility of the underlying share, the expected dividend yield and the risk -free interest rate for the term of the performance right. The Company has elected to retain any amounts originally recognised in the share -based payments reserve, regardless of whether the associated performance rights are cancelled or lapse unexercised. R. Intangible assets [[ii]] New Zealand carbon credits New Zealand carbon credits, also referred to as New Zealand Units (NZUs) are acquired through the Environmental Protection Authority and surrendered to the New Zealand Government for the Group’s proportionate share of the Maari/Manaia fields direct greenhouse gas emissions for the calendar year. The NZUs are valued at cost and do not expire. NZUs are not amortised but are tested for impairment in accordance with the accounting policy set out in Note 1(J). S. Trade and other payables These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid. Due to their short -term nature they are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition. They are included in current liabilities, except for those with maturities greater than one year after the end of the reporting period which are classified as non-current liabilities. T. Derivatives D e r i v a t i v e s a r e i n i t i a l l y r e c o g n i s e d a t f a i r v a l u e o n t h e d a t e a d e r i v a t i v e c o n t r a c t i s e n t e r e d i n t o a n d a r e s u b s e q u e n t l y r e me a s u re d t o t he i r f a i r v a lu e a t e a c h re p o r t in g d a t e . T h e a c c o u n t in g f o r s u b se q ue n t ch a n ge s i n f a i r v a l u e dep e n d s o n whether the der ivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives as either; (1) hedges of the fair value of recognised assets or liabilities or a firm commitme nt (fair value hedge); or (2) hedges of the cash flows of recognised assets and liabilities and highly probable forecast transactions (cash flow hedges). The Group documents at the inception of the hedging transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Group also documents its a ssessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or cash flows of hedged items. The fair values of derivative financial instruments used for hedging purposes are disclosed in Note 10. Movements in the hedging reserve in equity are shown in Note 19(A). [[ii]] Cash flow hedge The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in equity in the hedging reserve. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss within other income or other expenses. The Group currently does not have any derivatives designated as fair value hedges. Amounts accumulated in equity are recycled to profit or loss in the periods when the hedged item will affect profit or loss (for instance when the forecast sale that is hedged takes place). The gain or loss relating to the effective portion of interest rate swaps hedging variable rate borrowings is recognised in profit or loss within “finance costs”. The gain or loss relating to the effective portion of forward foreign exchange contracts and commodity price contracts hedging export sales is recognised in profit or loss within ‘revenue’. However, when the forecast transaction that is hedged results in the recognition of a non-financial asset (for example, inventory) or a non-financial liability, the gains and losses previously deferred in equity are transferred from equity and included in the measurement of the initial cost or carrying amount of the asset or liability. When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the profit or loss. [[iiii]] Derivatives that do not qualify for hedge accounting Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that does not qualify for hedge accounting are recognised immediately in profit or loss and are included in other income or other expenses.
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Horizon Oil Annual Report 2026 65 U. B orrowings Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest rate method. Fees paid on the establishment of loan facilities which are not an incremental cost relating to the actual drawdown of the facility, are recognised as prepayments (netted against the loan balance) and amortised on a straight-line basis over the term of the facility. Borrowings are classified as current liabilities unless the Group has a right to defer settlement of the liability for at lea st 12 months after the end of the reporting period. V. Borrowing costs Borrowing costs which includes the costs of arranging and obtaining financing, incurred for the acquisition or construction of any qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed when incurred. No b orrowing costs (2025: $Nil) were capitalised during the current financial year and the amount of borrowing costs amortised to the income statement were $585,817 (2025: $654,874). W. Employee benefits [ [ii]] W ages and salaries and annual leave Liabilities for wages and salaries, including non-monetary benefits, annual leave and related on-costs expected to be settled within 12 months of the end of the reporting period are recognised in other payables in respect of employees' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are recognised in other payables. [ [iiii]] L ong service leave The liability for long service leave is recognised as a provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period u s i n g t he p rojected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the end of the reporting period on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. [ [iiiiii]] S hare -based payments Share-based payment compensation benefits are provided to employees and consultants via the Horizon Long -Term Incentive Plan and deferred STI Plan. Information relating to these schemes is set out in Note 28. The fair value of performance rights granted under the Horizon Long -Term Incentive Plan and deferred STI Plan are recognised as an employee share -based payments expense with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the performance rights granted, which includes any market performance conditions but excludes the impact of any service and non -market performance vesting conditions and the impact of any non-vesting conditions. Non-market performance vesting conditions are included in assumptions about the number of performance rights. The fair value is measured at grant date. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each reporting period, the Group revises it s estimates of the number of performance rights that are expected to vest based on the non -market performance vesting conditions. It recognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity. The fair value at grant date is independently determined using either a Black -Scholes or Monte Carlo simulation option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at effective allocation date and expected price volatility of the underlying share, the expected dividend yield and the risk -free interest rate for the term of the performance right. The Company has elected to retain any amounts originally recognised in the share -based payments reserve, regardless of whether the associated performance rights are cancelled or lapse unexercised. R . Intangible assets [[ii]] N ew Zealand carbon credits New Zealand carbon credits, also referred to as New Zealand Units (NZUs) are acquired through the Environmental Protection Authority and surrendered to the New Zealand Government for the Group’s proportionate share of the Maari/Manaia fields direct greenhouse gas emissions for the calendar year. The NZUs are valued at cost and do not expire. NZUs are not amortised but are tested for impairment in accordance with the accounting policy set out in Note 1 (J). S. Trade and other payables These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid. Due to their short -term nature they are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition. They are included in current liabilities, except for those with maturities greater than one year after the end of the reporting period which are classified as non -current liabilities. T. Derivatives D e r i v a t i v e s a r e i n i t i a l l y r e c o g n i s e d a t f a i r v a l u e o n t h e d a t e a d e r i v a t i v e c o n t r a c t i s e n t e r e d i n t o a n d a r e s u b s e q u e n t l y r e me a s u re d t o t he i r f a i r v a lu e a t e a c h re p o r t in g d a t e . T h e a c c o u n t in g f o r s u b se q ue n t ch a n ge s i n f a i r v a l u e dep e n d s o n whether the der ivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives as either; (1) hedges of the fair value of recognised assets or liabilities or a firm commitme nt (fair value hedge); or (2) hedges of the cash flows of recognised assets and liabilities and highly probable forecast transactions (cash flow hedges). The Group documents at the inception of the hedging transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Group also documents its a ssessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or cash flows of hedged items. The fair values of derivative financial instruments used for hedging purposes are disclosed in Note 10. Movements in the hedging reserve in equity are shown in Note 19(A). [[ii]] C ash flow hedge The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in equity in the hedging reserve. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss within other income or other expenses. The Group currently does not have any derivatives designated as fair value hedges. Amounts accumulated in equity are recycled to profit or loss in the periods when the hedged item will affect profit or loss (for instance when the forecast sale that is hedged takes place). The gain or loss relating to the effective portion of inte rest rate swaps hedging variable rate borrowings is recognised in profit or loss within “finance costs”. The gain or loss relating to the effective portion of forward foreign exchange contracts and commodity price contracts hedging export sales is recognised in profit or loss within ‘revenue’. However, when the forecast transaction that is hedged results in the recognition of a non-financial asset (for example, inventory) or a non-financial liability, the gains and losses previously deferred in equity are transferred from equity and included in the measurement of the initial cost or carrying amount of the asset or liability. When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately transferred to the profit or loss. [[iiii]] D erivatives that do not qualify for hedge accounting Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that does not qualify for hedge accounting are recognised immediately in profit or loss and are included in other income or other expenses.
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Horizon Oil Annual Report 2026 66 [[iiii]] F inancial guarantees Where the parent entity has provided financial guarantees in relation to loans and payables of subsidiaries for no compensation, the fair values of these guarantees are accounted for as contributions and recognised as part of the cost of the investment. Note 2 Critical accounting estimates and judgements This section considers estimates and judgements which are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Group and that are believed to be reasonable under the circumstances. A. Critical accounting estimates and assumptions The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The most significant estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities relate to: [[ii]] E xploration and evaluation assets The Group’s policy for exploration and evaluation expenditure is discussed in Note 1(N). The application of this policy requires management to make certain estimates and assumptions as to future events and circumstances. These estimates and assumptions include whether commercially viable reserves have been found and whether the capitalised exploration and evaluation expenditure will be recovered through future exploitation or sale. [[iiii]] R eserve estimates The estimated quantities of proven and probable hydrocarbons reported by the Group are integral to the calculation of amortisation expense (depletion), assessments of impairment of assets, provision for restoration and the recognition of deferred tax assets due to changes in expected future cash flows. Reserve estimates require interpretation of complex and judgemental geological and geophysical models in order to assess the size, shape, depth and quality of reservoir, and their anticipated recoveries. The economic, geological and technical factors used to estimate reserves may change from period to period. Reserve estimates are prepared in accordance with guidelines prepared by the Society of Petroleum Engineers. [[iiiiii]] P rovisions for restoration The Group estimates the future removal and restoration costs of petroleum production facilities, wells, pipelines and related assets at the time of installation of the assets and reviews these assessments periodically. In most instances the removal of these assets will occur well into the future. The estimate of future removal costs therefore requires management to make judgements around the timing of the required restoration, rehabilitation and decommissioning activities , as well as the discount rate. The carrying amount of provision s for restoration by each assets/operating segments and other information are disclosed in Note 17. [[iivv]] I mpairment of oil and gas assets The Group assesses whether its oil and gas assets are impaired on a semi -annual basis when an indicator of impairment is present. This includes an estimation of the recoverable amount of the cash generating unit to which each asset belongs. The recoverable amount of an asset is the higher of its fair value less cost to sell and value in use. The fair value less c ost to sell is assessed on the basis of the estimated net cash flows that will be received from the asset’s continued employment a n d s u b s e q u e n t d i s p o s a l . T h e e s t i m a t e d f u t u r e c a s h f l o w s a r e b a s e d o n e s t i m a t e s o f h y d r o c a r b o n r e s e r v e s , f u t u r e production profiles, commodity prices, operati ng costs and future development costs necessary to access the reserves. Current climate change legislation is also factored into the estimated future cashflows and future uncertainty created by climate change risks continue to be monitored. In most cases, the present value of future cashflows is most sensitive to estimates of future oil price, reserves, and production rates. [[vv]] S hare -based payments Share-based payment transactions with directors and employees are measured by reference to the fair value of the share performance rights and employee options at the date they were granted. The fair value is ascertained using an appropriate pricing model, being either the Black-Scholes or Monte Carlo simulation, depending on the terms and conditions upon which the share performance rightsand employee options were granted. The Group also applies assumptions around the likelihood of the share performance rights or options vesting which will have an impact on the expense and equity recorded in the financial year. The number of share performance rights and employee options outstanding are disclosed in Note 31. The Horizon Oil Employee Incentive Trust administer s the Long-Term Incentive Plan and deferred STI Plan. T he Horizon Oil Employee Incentive Trust is consolidated in accordance with the principles in Note 1(C). Where the Horizon Oil Employee Incentive Trust purchases the company’s equity instruments, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity reserves. When an employee exercises performance rights pursuant to the Long -Term Incentive Plan or the deferred STI Plan , and the Board resolves to settle in shares, the Horizon Oil Employee Oil Incentive Trust transfers the appropriate amount of shares to the employee. X. Contributed equity Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options over unissued ordinary shares are shown in share capital as a deduction, net of related income tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration but are expensed. Where the Group purchases the company’s e q u i t y i n s t r u m e n t s , f o r e x a m p l e a s t h e r e s u l t o f a s h a r e b u y-back, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the owners of Horizon as treasury shares until the shares are cancelled or reissued. Where such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the owners of Horizon. Y. Earnings per share [[ii]] B asic earnings per share Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year. [ [iiii]] D iluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. Potential ordinary shares are considered dilutive only when their conversion to ordinary shares would decrease earnings per share, or increase loss per share, from continuing operations. Z. Goods and Services Tax (‘GST’) R e v e n u e s , e x p e n s e s a n d a s s e t s a r e r e c o g n i s e d n e t o f t h e a m o u n t o f a s s o c i a t e d G S T , u n l e s s t h e G S T i n c u r r e d i s n o t recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense. R e c e i v a b l e s a n d p a y a b l e s a r e s t a t e d i n c l u s i v e o f t h e a m o u n t o f G S T r e c e i v a b l e o r p a y a b l e . T h e n e t a m o u n t o f G S T recoverable from, or payable to, the taxation authority is included with other receivables or payables in the statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flow. AA. Parent entity financial information The financial information for the parent entity, Horizon Oil Limited, disclosed in Note 35, has been prepared on the same basis as the consolidated financial statements, except as set out below. [ [ii]] I nvestments in subsidiaries, associates and joint venture entities Investments in subsidiaries, associates and joint venture entities are accounted for at cost less any impairment in the financial statements of Horizon Oil Limited. Dividends received from associates are recognised in the parent entity’s profit or loss, rather than being deducted from the carrying amount of these investments.
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Horizon Oil Annual Report 2026 67 [[iiii]] Financial guarantees Where the parent entity has provided financial g uarantees in relation to loans and payables of subsidiaries for no compensation, the fair values of these guarantees are accounted for as contributions and recognised as part of the cost of the investment. Note 2 Critical accounting e stimates and j udgements This s ection c onsiders estimates and j udgements w hich are c ontinually e valuated and a re b ased on h istorical e xperience and other factors, including expectations of future events that may have a financial impact on the Group and that are believed to be reasonable under the circumstances. A. Critical accounting estimates and assumptions The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The most significant estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities relate to: [[ii] ] Exploration and evaluation assets The Group’s policy for exploration and evaluation expenditure is discussed in N ote 1(N). The application of this policy requires management to make certain estimates and assumptions as to future events and circumstances. These estimates and assumptions include whether commercially viable reserves have been found and whether the capitalised exploration and evaluation expenditure will be recovered through future exploitation or sale. [[iii i]] Reserve estimates The estimated quantities of proven and probable hydrocarbons reported by the Group are integral to the calculation of amortisation expense (depletion), assessments of impairment of assets, provision for restoration and the recognition of deferred tax assets due to changes in expected future cash flows. Reserve estimates require interpretation of complex and judgemental geological and geophysical models in order to a sse ss the size, shape, depth and quality of reservoir, and their anticipated recoveries. The economic, geological and technical factors used to estimate reserves may change from period t o period. Reserve estimates are prepared in accordance with guidelines prepared by the Society of Petroleum Engineers. [[i iiiii]] Provisions for restoration The Group estimates the future removal and restoration costs of petroleum production facilities, wells, pipelines and related a ssets at the time of installation of the assets and reviews these assessments periodically. In most instances the removal of these assets will occur well into the future. T he estimate of future removal costs therefore requires management to make judgements around the timing of the required restoration, r ehabilitation a nd decommissioning a ctivities , as well as the discount rate. The carrying amount of provision s for restoration by each assets/operating segments and other information a re disclosed in Note 17. [[iiv v]] Impairment of oil and gas assets The Group assesses whether its oil and gas assets are impaired on a semi-annual basis when an indicator of impairment is present. T his includes an estimation of the recoverable amount of the cash generating unit to which each asset belongs. The recoverable amount of an asset is the higher of its fair value less cost to sell and value in use. The fair value less c ost to sell is assessed on the basis of the estimated net cash flows that will be received from the asset’s continued employment and s ubsequent d isposal. T h e e stimated f uture c ash f lows a re b ased o n e stimates o f h ydrocarbon r e serves, f uture production profiles, commodity prices, operating costs and future development costs necessary to access the reserves. Current climate change legislation is also factored into the estimated future cashflows and future uncertainty created by climate change risks continue to be monitored. In most cases, the present value of future cashflows is most sensitive to estimates of future oil price, reserves, a nd production rates. [[vv]] Share-based payments Share-based payment transactions with directors and employees are measured by reference to the fair value of the share performance rights and employee options at the date they were granted. The fair value is ascertained using an appropriate p ricing model, being either the Black-Scholes or Monte Carlo simulation, depending on the terms and conditions upon which t he share performance rights and employee options were granted. The Group also applies assumptions around the likelihood of the share performance rights or options v esting which w ill have an impact on the expense a nd equity recorded in the financial year. The number of share performance rights a nd employee options outstanding are disclosed in N ote 28 . The Hor izon Oil Employee Incentive Trust administer s the Long-Term Incentive Plan and deferred STI Plan. T he Horizon Oil Employee Incentive Trust is consolidated in accordance with the principles in Note 1(C). Where the Horizon Oil Employee Incentive Trust purchases the company’s equity instruments, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity reserves. When an employee exercises performance rights pursuant to the Long -Term Incentive Plan or the deferred STI Plan , and the Board resolves to settle in shares, the Horizon Oil Employee Oil Incentive Trust transfers the appropriate amount of shares to the employee. X. Contributed equity Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options over unissued ordinary shares are shown in share capital as a deduction, net of related income tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration but are expensed. Where the Group purchases the company’s e q u i t y i n s t r u m e n t s , f o r e x a m p l e a s t h e r e s u l t o f a s h a r e b u y-back, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the owners of Horizon as treasury shares until the shares are cancelled or reissued. Where such ordinary shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the owners of Horizon. Y. Earnings per share [[ii]] Basic earnings per share B asic earnings per share is calculated by dividing the profit attributable to equity holders of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year. [[iiii]] Diluted earnings per share D iluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares. Potential ordinary shares are considered dilutive only when their conversion to ordinary shares would decrease earnings per share, or increase loss per share, from continuing operations. Z. Goods and Services Tax (‘GST’) R e v e n u e s , e x p e n s e s a n d a s s e t s a r e r e c o g n i s e d n e t o f t h e a m o u n t o f a s s o c i a t e d G S T , u n l e s s t h e G S T i n c u r r e d i s n o t recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense. R e c e i v a b l e s a n d p a y a b l e s a r e s t a t e d i n c l u s i v e o f t h e a m o u n t o f G S T r e c e i v a b l e o r p a y a b l e . T h e n e t a m o u n t o f G S T recoverable from, or payable to, the taxation authority is included with other receivables or payables in the statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flow. AA. Parent entity financial information The financial information for the parent entity, Horizon Oil Limited, disclosed in Note 35, has been prepared on the same basis as the consolidated financial statements, except as set out below. [[ii]] Investments in subsidiaries, associates and joint venture entities In vestments in subsidiaries, associates and joint venture entities are accounted for at cost less any impairment in the financial statements of Horizon Oil Limited. Dividends received from associates are recognised in the parent entity’s profit or loss, rather than being deducted from the carrying amount of these investments.
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Horizon Oil Annual Report 2026 68 B . Segment information provided to the chief operating decision maker 30 JUNE 2026 CHINA DEVELOPMENT US$’000 NEW ZEALAND DEVELOPMENT US$’000 AUSTRALIA DEVELOPMENT US$’000 THAILAND EXPLORATION & DEVELOPMENT US$’000 CUE ENERGY RESOURCES US$’000 UNALLOCATED US$’000 TOTAL US$’000 SEGMENT INFORMATION Revenue from customers 38,073 26,033 17,590 23,018 2,466 - 107,180 Depreciation & amortisation (10,733) (16,366) (4,777) (6,899) (286) (137) (39,148) Profit / (loss) before tax 4,866 (5,180) 2,183 3,672 1,608 (1,274) 5,875 Total segment assets 30,342 51,329 47,505 43,807 111,102 21,177 305,262 Additions to non-current assets other than financial assets and deferred tax during the financial year ended: Development & Production phase expenditure (including purchase price) 1,200 2,606 2,347 - 79,628 - 85,781 Total segment liabilities 30,372 65,588 41,673 23,401 47,714 3,235 211,983 30 JUNE 2025 CHINA DEVELOPMENT US$’000 NEW ZEALAND DEVELOPMENT US$’000 AUSTRALIA DEVELOPMENT US$’000 UNALLOCATED US$’000 TOTAL US$’000 SEGMENT INFORMATION: Revenue from customers 47,592 42,894 14,821 - 105,307 Depreciation & amortisation (10,662) (19,124) (3,180) (175) (33,141) Profit/(loss) before tax 15,756 268 1,356 (727) 16,653 Total segment assets 41,302 63,182 50,124 25,547 180,155 Additions to non-current assets other than financial assets and deferred tax during the financial year ended: P roduction expenditure 4,079 1,947 4,114 - 10,140 Plant and equipment - - - 437 437 Total segment liabilities 8,973 66,247 37,426 2,211 114,857 C. O ther segment information [[ii]] S egment revenue The Group’s revenue is derived from the sale of crude oil produced in China, New Zealand, Australia , Thailand and Indonesia and the sale of gas produced in Australia , Thailand and Indonesia. The Group sells to customers through sales agreements with the respective joint venture operators (CNOOC and OMV) who market and on -sell crude oil to customers, for which the Group is charged a marketing fee stipulated by the sales agreements. In Australia and Indonesia, the Group sells to domestic customers through individual sales contracts. In Thailand, the Group sells to the domestic market. Reportable segment revenues reconcile to consolidated revenue per statement of comprehensive income as below: 30 JUNE 2026 US$’000 30 JUNE 2025 US$’000 Total segment revenue 107,180 105,307 Less: G roup’s share of revenue from joint venture (23,018) - Total revenue per consolidated statement of comprehensive income 84,162 105,307 [[vvii]] R ecoverability of deferred tax assets The recoverability of deferred tax assets is based on the probability that future taxable amounts will be available to utilis e those temporary differences and losses. During the financial year, the Group recognised previously unrecognised deferred t a x a s s e t s r e l a t i n g t o t a x l o s s e s a n d t e m p o r a r y d i f f e r e n c e s w i t h i n t h e A u s t r a l i a n t a x c o n s o l i d a t e d g r o u p . T h e c o n t i n u e d strong performance of the Mereenie field has supported the utilisation of Australian tax losses. Based on forecast future taxable cash flows and the expected utilisation of the remaining tax losses, management considers it probable that the deferred tax assets will be recovered. Refer to Note 6 for further details. Assessing the future utilisation of tax losses and temporary tax differences requires the Group to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws. To the extent that future utilisation of these tax losses and temporary tax differences becomes probable, this could result in significant changes to deferred tax assets recognised, which would in turn impact future financial results. B. Critical judgements in applying the Group’s accounting policies No critical judgements considered to have a significant risk of causing a material adjustment to the carrying amounts of the assets and liabilities within the next financial year were made during the preparation of this report . Note 3 Segment information A. Description of segments Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker has been identified as the Board of Directors. The operating segments identified are broadly based on the Group’s working interest in each individual oil and gas permit, arranged by developmental phase. Discrete pre -tax financial information (including pre -tax operating profit and capital expenditure on exploration and evaluation assets and oil and gas assets) for each oil and gas permit is prepared and provided to the chief operating decision maker on a regular basis. In certain circumstances, individual oil and gas permits are aggregated into a single operating segment where the economic characteristics and long -term planning and operational considerations of the individual oil and gas permits are such that they are considered interdependent, such as the Thailand oil and gas fields. The recently acquired equity interest in Cue Energy Resources Limited has been identified as its own operating segment as the internal reporting is based on Cue’s aggregate results and operations and not on its i ndividual licenses/assets. The Group has identified five operating segments: – China development – the Group is currently involved in developing and producing crude oil from the Block 22/12 – WZ6-12 , W Z12-8W and WZ12-8E oil field developments within Block 22/12; – N ew Zealand development – the Group is currently involved in developing and producing crude oil from the Maari/Manaia oil field development; – A ustralia development – the Group is currently involved in developing and producing oil and gas from the Mereenie OL4 and OL5 oil and gas fields; – T hailand exploration and development – the Group is currently involved in developing and producing oil and gas from the Sinphuhorm and Nam Phong oil and gas fields; and – C ue Energy Resources Limited – the Group acquired a controlling equity interest in Cue Energy Resources Limited during the financial year. This company is currently involved in developing and producing oil and gas from licenses outlined in Note 24.
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Horizon Oil Annual Report 2026 69 B . Segment information provided to the chief operating decision maker 30 JUNE 2026 CHINA DEVELOPMENT US$’000 NEW ZEALAND DEVELOPMENT US$’000 AUSTRALIA DEVELOPMENT US$’000 THAILAND EXPLORATION & DEVELOPMENT US$’000 CUE ENERGY RESOURCES US$’000 UNALLOCATED US$’000 TOTAL US$’000 SEGMENT INFORMATION Revenue from customers 38,073 26,033 17,590 23,018 2,466 - 107,180 Depreciation & amortisation (10,733) (16,366) (4,777) (6,899) (286) (137) (39,148) Profit / (loss) before tax 4,866 (5,180) 2,183 3,672 1,608 (1,274) 5,875 Total segment assets 30,342 51,329 47,505 43,807 111,102 21,177 305,262 Additions to non-current assets other than financial assets and deferred tax during the financial year ended: Development & Production phase expenditure (including purchase price) 1,200 2,606 2,347 - 79,628 - 85,781 Total segment liabilities 30,372 65,588 41,673 23,401 47,714 3,235 211,983 30 JUNE 2025 CHINA DEVELOPMENT US$’000 NEW ZEALAND DEVELOPMENT US$’000 AUSTRALIA DEVELOPMENT US$’000 UNALLOCATED US$’000 TOTAL US$’000 SEGMENT INFORMATION: Revenue from customers 47,592 42,894 14,821 - 105,307 Depreciation & amortisation (10,662) (19,124) (3,180) (175) (33,141) Profit/(loss) before tax 15,756 268 1,356 (727) 16,653 Total segment assets 41,302 63,182 50,124 25,547 180,155 Additions to non-current assets other than financial assets and deferred tax during the financial year ended: Production expenditure 4,079 1,947 4,114 - 10,140 Plant and equipment - - - 437 437 Total segment liabilities 8,973 66,247 37,426 2,211 114,857 C. O ther segment information [[ii]] S egment revenue The Group’s revenue is derived from the sale of crude oil produced in China, New Zealand, Australia , Thailand and Indonesia and the sale of gas produced in Australia , Thailand and Indonesia. The Group sells to customers through sales agreements with the respective joint venture operators (CNOOC and OMV) who market and on -sell crude oil to customers, for which the Group is charged a marketing fee stipulated by the sales agreements. In Australia and Indonesia, the Group sells to domestic customers through individual sales contracts. In Thailand, the Group sells to the domestic market. Reportable segment revenues reconcile to consolidated revenue per statement of comprehensive income as below: 30 JUNE 2026 US$’000 30 JUNE 2025 US$’000 Total segment revenue 107,180 105,307 Less: Group’s share of revenue from joint venture (23,018) - Total revenue per consolidated statement of comprehensive income 84,162 105,307 [[vvii]] R ecoverability of deferred tax assets The recoverability of deferred tax assets is based on the probability that future taxable amounts will be available to utilis e those temporary differences and losses. During the financial year, the Group recognised previously unrecognised deferred t a x a s s e t s r e l a t i n g t o t a x l o s s e s a n d t e m p o r a r y d i f f e r e n c e s w i t h i n t h e A u s t r a l i a n t a x c o n s o l i d a t e d g r o u p . T h e c o n t i n u e d strong performance of the Mereenie field has supported the utilisation of Australian tax losses. Based on forecast future taxable cash flows and the expected utilisation of the remaining tax losses, management considers it probable that the deferred tax assets will be recovered. Refer to Note 6 for further details. Assessing the future utilisation of tax losses and temporary tax differences requires the Group to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws. To the extent that future utilisation of these tax losses and temporary tax differences becomes probable, this could result in significant changes to deferred tax assets recognised, which would in turn impact future financial results. B. Critical judgements in applying the Group’s accounting policies No critical judgements considered to have a significant risk of causing a material adjustment to the carrying amounts of the assets and liabilities within the next financial year were made during the preparation of this report . Note 3 Segment information A. Description of segments Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker has been identified as the Board of Directors. The operating segments identified are broadly based on the Group’s working interest in each individual oil and gas permit, arranged by developmental phase. Discrete pre -tax financial information (including pre -tax operating profit and capital expenditure on exploration and evaluation assets and oil and gas assets) for each oil and gas permit is prepared and provided to the chief operating decision maker on a regular basis. In certain circumstances, individual oil and gas permits are aggregated into a single operating segment where the economic characteristics and long -term planning and operational considerations of the individual oil and gas permits are such that they are considered interdependent, such as the Thailand oil and gas fields. The recently acquired equity interest in Cue Energy Resources Limited has been identified as its own operating segment as the internal reporting is based on Cue’s aggregate results and operations and not on its i ndividual licenses/assets. The Group has identified five operating segments: – China development – the Group is currently involved in developing and producing crude oil from the Block 22/12 – WZ6-12, WZ12-8W and WZ12-8E oil field developments within Block 22/12; – New Zealand development – the Group is currently involved in developing and producing crude oil from the Maari/Manaia oil field development; – Australia development – the Group is currently involved in developing and producing oil and gas from the Mereenie OL4 and OL5 oil and gas fields; – Thailand exploration and development – the Group is currently involved in developing and producing oil and gas from the Sinphuhorm and Nam Phong oil and gas fields; and – Cue Energy Resources Limited – the Group acquired a controlling equity interest in Cue Energy Resources Limited during the financial year. This company is currently involved in developing and producing oil and gas from licenses outlined in Note 24.
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Horizon Oil Annual Report 2026 70 T he Group’s revenue disaggregated by pattern of revenue recognition is as follows: CONSOLIDATED 2026 US$’000 2025 US$’000 CRUDE OIL AND GAS SALES Goods transferred at a point in time 67,022 92,692 Goods transferred over a period of time 17,140 12,615 Total crude oil and gas sales 84,162 105,307 Note 5 Expenses C ONSOLIDATED 2026 US$’000 2025 US$’000 COST OF SALES Direct production costs 38,148 36,531 Inventory adjustments1 ( 5,141) 5,022 Amortisation expense 32,156 32,967 Royalties and other levies 3,597 2,233 Total 68,760 76,753 1 A djustment for the cost of inventory produced which is on hand as at the end of the financial period. GENERAL AND ADMINISTRATIVE EXPENSES Employee benefits expense 509 734 Employee share options expense 1,500 1,597 Corporate office expense 1,346 1,360 Depreciation expense 143 175 Rental expense relating to operating leases 6 6 Total 3,504 3,872 INSURANCE EXPENSE Insurance expense (including Loss of Production Income Insurance) 1,980 1,945 Total 1,980 1,945 IMPAIRMENT EXPENSE Impairment of carbon credits 2 2 46 - Total 246 - 2 D uring FY26 the Company assessed the recoverability of the New Zealand carbon unitsand recorded an impairment expense as the spot price at the 31 December 2025 balance sheet date was less than the historical cost of the units. As at 30 June 2026, the revised carrying value of the NZU prices are in line with current market price. F INANCING COSTS Interest and finance charges 5,186 3,227 Discount unwinding on provision for restoration 2,768 2,659 Amortisation of prepaid financing costs 512 114 Total 8,466 6,000 [[iiii]] S egment profit before tax The chief operating decision maker assesses the performance of operating segments based on a measure of profit before tax. Segment profit before tax is equal to consolidated profit before tax. [[iiiiii]] S egment assets and segment liabilities The amounts provided to the chief operating decision maker with respect to total assets and total liabilities are measured in a manner consistent with that of the financial statements. Reportable segment assets and segment liabilities reconcile to consolidated assets and liabilities as below: 30 JUNE 2026 US$’000 30 JUNE 2025 US$’000 Total segment asset 305,262 180,155 Less: Group’s share of joint venture liabilities (Note 13) (23,401) - Total assets per consolidated statement of financial position 281,861 180,155 Total segment liability 211,983 114,857 Less: Group’s share of joint venture liabilities (Note 13) (23,401) - Total liabilities per consolidated statement of financial position 188,582 114,857 Note 4 Revenue and Other Income CONSOLIDATED 2026 US$’000 2025 US$’000 FROM CONTINUING OPERATIONS Crude oil sales 77,197 91,511 Gas sales 17,140 12,615 Net realised gain/(loss) on oil hedging derivatives (Note 10) (10,175) 1,181 Total revenue 84,162 105,307 OTHER INCOME Interest received from unrelated entities 1,793 1,517 Total other income 1,793 1,517 Revenue for the financial year ended 30 June 20 26 relates to contracts executed for the sale of crude oil and gas, and all performance obligations have been met within the period. There is no variable consideration requiring estimation for the year ended 30 June 2026. The Group did not have contracts that were executed in a prior period, whereby the performance obligations were partially m e t a t t h e b e g i n n i n g o f t h e p e r i o d . T h e r e a r e n o e x i s t i n g c o n t r a c t s t h a t a r e u n s a t i s f i e d o r p a r t i a l l y u n s a t i s f i e d a s a t 30 June 2026. The Group’s revenue disaggregated by primary geographical markets is reported in Note 3 – Segment information. The Group’s top two customers account for ~80% of revenue.
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Horizon Oil Annual Report 2026 71 T he Group’s revenue disaggregated by pattern of revenue recognition is as follows: CONSOLIDATED 2026 US$’000 2025 US$’000 CRUDE OIL AND GAS SALES Goods transferred at a point in time 67,022 92,692 Goods transferred over a period of time 17,140 12,615 Total crude oil and gas sales 84,162 105,307 Note 5 Expenses CONSOLIDATED 2026 US$’000 2025 US$’000 COST OF SALES Direct production costs 38,148 36,531 Inventory adjustments1 (5,141) 5,022 Amortisation expense 32,156 32,967 Royalties and other levies 3,597 2,233 Total 68,760 76,753 1 Adjustment for the cost of inventory produced which is on hand as at the end of the financial period. GENERAL AND ADMINISTRATIVE EXPENSES Employee benefits expense 509 734 Employee share options expense 1,500 1,597 Corporate office expense 1,346 1,360 Depreciation expense 143 175 Rental expense relating to operating leases 6 6 Total 3,504 3,872 INSURANCE EXPENSE Insurance expense (including Loss of Production Income Insurance) 1,980 1,945 Total 1,980 1,945 IMPAIRMENT EXPENSE Impairment of carbon credits2 246 - Total 246 - 2 D uring FY26 the Company assessed the recoverability of the New Zealand carbon units and recorded an impairment expense as the spot price at the 31 December 2025 balance sheet date was less than the historical cost of the units. As at 30 June 2026, the revised carrying value of the NZU prices are in line with current market price. FINANCING COSTS Interest and finance charges 5,186 3,227 Discount unwinding on provision for restoration 2,768 2,659 Amortisation of prepaid financing costs 512 114 Total 8,466 6,000 [[iiii]] S egment profit before tax The chief operating decision maker assesses the performance of operating segments based on a measure of profit before tax. Segment profit before tax is equal to consolidated profit before tax. [[iiiiii]] S egment assets and segment liabilities The amounts provided to the chief operating decision maker with respect to total assets and total liabilities are measured in a manner consistent with that of the financial statements. Reportable segment assets and segment liabilities reconcile to consolidated assets and liabilities as below: 30 JUNE 2026 US$’000 30 JUNE 2025 US$’000 Total segment asset 305,262 180,155 Less: G roup’s share of joint venture liabilities (Note 13) (23,401) - Total assets per consolidated statement of financial position 281,861 180,155 Total segment liability 211,983 114,857 Less: G roup’s share of joint venture liabilities (Note 13) (23,401) - Total liabilities per consolidated statement of financial position 188,582 114,857 Note 4 Revenue and Other Income C ONSOLIDATED 2026 US$’000 2025 US$’000 FROM CONTINUING OPERATIONS Crude oil sales 77,197 91,511 Gas sales 17,140 12,615 Net realised gain/(loss) on oil hedging derivatives (Note 10) (10,175) 1,181 Total revenue 84,162 105,307 OTHER INCOME Interest received from unrelated entities 1,793 1,517 Total other income 1,793 1,517 Revenue for the financial year ended 30 June 20 26 r elates to contracts executed for the sale of crude oil and gas, and all performance obligations have been met within the period. There is no variable consideration requiring estimation for the year ended 30 June 20 26. The Group did not have contracts that were executed in a prior period, whereby the performance obligations were partially m e t a t t h e b e g i n n i n g o f t h e p e r i o d . T h e r e a r e n o e x i s t i n g c o n t r a c t s t h a t a r e u n s a t i s f i e d o r p a r t i a l l y u n s a t i s f i e d a s a t 30 June 2026. The Group’s revenue disaggregated by primary geographical markets is reported in Note 3 – Segment information. The Group’s top two customers account for ~80% of revenue.
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Horizon Oil Annual Report 2026 72 ( d) Amounts recognised in other comprehensive income Aggregate deferred tax arising in the reporting period and not recognised in net profit or loss but directly debited to other comprehensive income. CONSOLIDATED 2026 US$’000 2025 US$’000 Deferred tax: changes in fair value of cash flow hedges 9 77 Total tax expense recognised in other comprehensive income 9 77 (e) Tax losses CONSOLIDATED 2026 US$’000 2025 US$’000 Unused tax losses (and applicable tax rate) for which a deferred tax asset has been recognised: Horizon Oil Limited – 30% (2025: 30%) 3,132 - Cue Energy Resources Limited – 30% 3,540 Tax benefit at applicable tax rates 6,672 - Unused tax losses (and applicable tax rate) for which no deferred tax asset has been recognised : Horizon Oil Limited – 30% (2025: 30%) - 4,984 Cue Energy Resources Limited – 30% 14,811 - Potential tax benefit at applicable tax rates 14,811 4,984 The Company ha d formed an Australian Tax Consolidated Group with its Australian subsidiaries, Horizon Australia Investments Pty Limited, Horizon Australia Energy Pty Limited and Horizon Thailand Investments Pty Limited and are subject to the Australian tax consolidation regime. Cue Energy Resources Limited and its wholly-owned Australian controlled entities have formed an income tax consolidated group and are subject to the Australian tax consolidation regime. As the Company does not own 100% of the issued equity of Cue Energy Resources Limited, these two tax consolidated groups remain as separate tax entities under the Australian tax consolidation regime. (f) Deferred tax assets CONSOLIDATED 2026 US$’000 2025 US$’000 Recognised deferred tax assets are attributable to: Tax losses 6,672 - Development and production expenditure 39,061 21,032 Cash flow hedges - - Provisions and other 3,489 576 Total deferred tax assets 49,222 21,608 Set off of deferred tax liabilities pursuant to set off provisions (13,079) (2,136) Net deferred tax assets 36,143 19,472 Note 6 Taxes CONSOLIDATED 2026 US$’000 2025 US$’000 (a) Royalty tax expense / (benefit) Royalty paid / payable in New Zealand – current tax expense 2,883 4,909 Tax benefit related to movements in deferred tax balances (2,353) (4,523) Total royalty tax expense 530 386 (b) Income tax expense / (benefit) Current tax expense 3,714 7,162 Tax benefit related to movements in deferred tax balances (9,476) (2,759) Adjustments for current tax of prior periods (11) (383) Total income tax expense / (benefit) (5,773) 4,020 Deferred income tax benefit included in income tax expense comprises: (Increase) in deferred tax assets (10,846) (2,918) Increase in deferred tax liabilities 1,370 159 Total deferred income tax (benefit) (9,476) (2,759) The deferred income tax balances , associated with the purchase price allocation of the Cue Transaction , did not impact income tax expense for the 2026 Financial year. CONSOLIDATED 2026 US$’000 2025 US$’000 (c) Numerical reconciliation between profit before tax and tax expense / (benefit) Profit from continuing operations before tax 5,875 16,653 Less: Royalty paid / payable (2,883) (4,909) Total 2,992 11,744 Tax at the Australian tax rate of 30% (2025: 30%) 898 3,523 Tax effect of amounts which are not deductible / (taxable) in calculating taxable income: Expenditure not allowed for income tax purposes 1,425 806 Other assessable items 378 301 Share of profit of equity accounted investment (1,101) - Total 1,600 4,630 Effect of overseas tax rates (205) (746) Deferred tax asset not brought to account - (72) Deferred tax assets previously unrecognised – utilised to reduce current tax expense (749) - Deferred tax asset brought to account (6,408) - Adjustments for current tax of prior periods (11) 208 Income tax (benefit)/expense (5,773) 4,020 Royalty tax expense 530 386 Total tax (benefit)/expense recognised in statement of profit or loss (5,243) 4,406
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Horizon Oil Annual Report 2026 73 (d) Amounts recognised in other comprehensive income Aggregate deferred tax arising in the reporting period and not recognised in net profit or loss but directly debited to other comprehensive income. CONSOLIDATED 2026 US$’000 2025 US$’000 Deferred tax: changes in fair value of cash flow hedges 9 77 Total tax expense recognised in other comprehensive income 9 77 (e) Tax losses CONSOLIDATED 2026 US$’000 2025 US$’000 Unused tax losses (and applicable tax rate) for which a deferred tax asset has been recognised: Horizon Oil Limited – 30% (2025: 30%) 3,132 - Cue Energy Resources Limited – 30% 3,540 Tax benefit at applicable tax rates 6,672 - Unused tax losses (and applicable tax rate) for which no deferred tax asset has been recognised : Horizon Oil Limited – 30% (2025: 30%) - 4,984 Cue Energy Resources Limited – 30% 14,811 - Potential tax benefit at applicable tax rates 14,811 4,984 The Company ha d formed an Australian Tax Consolidated Group with its Australian subsidiaries, Horizon Australia Investments Pty Limited, Horizon Australia Energy Pty Limited and Horizon Thailand Investments Pty Limited and are subject to the Australian tax consolidation regime. Cue Energy Resources Limited and its wholly-owned Australian controlled entities have formed an income tax consolidated group and are subject to the Australian tax consolidation regime. As the Company does not own 100% of the issued equity of Cue Energy Resources Limited, these two tax consolidated groups remain as separate tax entities under the Australian tax consolidation regime. (f) Deferred tax assets CONSOLIDATED 2026 US$’000 2025 US$’000 Recognised deferred tax assets are attributable to: Tax losses 6,672 - Development and production expenditure 39,061 21,032 Cash flow hedges - - Provisions and other 3,489 576 Total deferred tax assets 49,222 21,608 Set off of deferred tax liabilities pursuant to set off provisions (13,079) (2,136) Net deferred tax assets 36,143 19,472 Note 6 Taxes CONSOLIDATED 2026 US$’000 2025 US$’000 (a) Royalty tax expense / (benefit) Royalty paid / payable in New Zealand – current tax expense 2,883 4,909 Tax benefit related to movements in deferred tax balances (2,353) (4,523) Total royalty tax expense 530 386 (b) Income tax expense / (benefit) Current tax expense 3,714 7,162 Tax benefit related to movements in deferred tax balances (9,476) (2,759) Adjustments for current tax of prior periods (11) (383) Total income tax expense / (benefit) (5,773) 4,020 Deferred income tax benefit included in income tax expense comprises: (Increase) in deferred tax assets (10,846) (2,918) Increase in deferred tax liabilities 1,370 159 Total deferred income tax (benefit) (9,476) (2,759) The deferred income tax balances , associated with the purchase price allocation of the Cue Transaction , did not impact income tax expense for the 2026 Financial year. CONSOLIDATED 2026 US$’000 2025 US$’000 (c) Numerical reconciliation between profit before tax and tax expense / (benefit) Profit from continuing operations before tax 5,875 16,653 Less: Royalty paid / payable (2,883) (4,909) Total 2,992 11,744 Tax at the Australian tax rate of 30% (2025: 30%) 898 3,523 Tax effect of amounts which are not deductible / (taxable) in calculating taxable income: Expenditure not allowed for income tax purposes 1,425 806 Other assessable items 378 301 Share of profit of equity accounted investment (1,101) - Total 1,600 4,630 Effect of overseas tax rates (205) (746) Deferred tax asset not brought to account - (72) Deferred tax assets previously unrecognised – utilised to reduce current tax expense (749) - Deferred tax asset brought to account (6,408) - Adjustments for current tax of prior periods (11) 208 Income tax (benefit)/expense (5,773) 4,020 Royalty tax expense 530 386 Total tax (benefit)/expense recognised in statement of profit or loss (5,243) 4,406
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Horizon Oil Annual Report 2026 74 (h) Deferred tax liabilities CONSOLIDATED 2026 US$’000 2025 US$’000 Recognised deferred tax liabilities are attributable to: Development and production expenditure 18,040 3,476 Accounting profits royalty 2,317 364 Cash flow hedges 193 105 Recognition of deferred tax liability on purchase price allocation on acquisition of Cue Energy Resources Limited 10,357 - Other 1,248 1,659 Total deferred tax liabilities 32,155 5,604 Set off of deferred tax assets pursuant to set off provisions (13,079) (2,136) Net deferred tax liabilities 19,076 3,468 2026 DEVELOPMENT AND PRODUCTION EXPENDITURE US$’000 ACCOUNTING PROFIT ROYALTY US$’000 CASH FLOW HEDGES US$’000 OTHER US$’000 TOTAL US$’000 AT 1 JULY 2025 3,476 364 105 1,659 5,604 (Charged) / credited: Acquisition of Cue Energy Resources 14,056 - - 10,357 24,413 To profit or loss 508 1,953 - (411) 2,050 To other comprehensive income - - 88 - 88 At 30 June 2026 18,040 2,317 193 11,605 32,155 2025 DEVELOPMENT AND PRODUCTION EXPENDITURE US$’000 ACCOUNTING PROFIT ROYALTY US$’000 CASH FLOW HEDGES US$’000 OTHER US$’000 TOTAL US$’000 AT 1 JULY 2024 4,584 391 - 1,381 6,356 (Charged) / credited: To profit or loss (1,108) (27) - 278 (857) To other comprehensive income - - 105 - 105 At 30 June 2025 3,476 364 105 1,659 5,604 2026 MOVEMENTS TAX LOSSES DEVELOPMENT & PRODUCTION EXPENDITURE US$’000 CASH FLOW HEDGES US$’000 PROVISIONS & OTHER US$’000 TOTAL US$’000 AT JULY 2025 - 21,032 - 576 21,608 (Charged) / credited: Acquisition of Cue Energy Resources 3,540 9,029 - 461 13,030 to profit or loss 3,132 9,000 - 2,452 14,584 At 30 June 2026 6,672 39,061 - 3,489 49,222 2025 MOVEMENTS TAX LOSSES DEVELOPMENT & PRODUCTION EXPENDITURE US$’000 CASH FLOW HEDGES US$’000 PROVISIONS & OTHER US$’000 TOTAL US$’000 AT JULY 2024 - 14,853 29 328 15,210 (Charged) / credited: to profit or loss - 6,179 - 248 6,427 to other comprehensive income - - (29) - (29) At 30 June 2025 - 21,032 - 576 21,608 (g) Current tax payable CONSOLIDATED 2026 US$’000 2025 US$’000 Current tax payable – China 1,374 149 Current tax payable – Australia 15 - Current tax payable – Cue Energy Resources Limited 2,674 - Current tax payable – New Zealand 656 1,996 Current royalty tax payable – New Zealand 829 1,775 Total current tax payable 5,548 3,920
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Horizon Oil Annual Report 2026 75 (h) Deferred tax liabilities CONSOLIDATED 2026 US$’000 2025 US$’000 Recognised deferred tax liabilities are attributable to: Development and production expenditure 18,040 3,476 Accounting profits royalty 2,317 364 Cash flow hedges 193 105 Recognition of deferred tax liability on purchase price allocation on acquisition of Cue Energy Resources Limited 10,357 - Other 1,248 1,659 Total deferred tax liabilities 32,155 5,604 Set off of deferred tax assets pursuant to set off provisions (13,079) (2,136) Net deferred tax liabilities 19,076 3,468 2026 DEVELOPMENT AND PRODUCTION EXPENDITURE US$’000 ACCOUNTING PROFIT ROYALTY US$’000 CASH FLOW HEDGES US$’000 OTHER US$’000 TOTAL US$’000 AT 1 JULY 2025 3,476 364 105 1,659 5,604 (Charged) / credited: Acquisition of Cue Energy Resources 14,056 - - 10,357 24,413 To profit or loss 508 1,953 - (411) 2,050 To other comprehensive income - - 88 - 88 At 30 June 2026 18,040 2,317 193 11,605 32,155 2025 DEVELOPMENT AND PRODUCTION EXPENDITURE US$’000 ACCOUNTING PROFIT ROYALTY US$’000 CASH FLOW HEDGES US$’000 OTHER US$’000 TOTAL US$’000 AT 1 JULY 2024 4,584 391 - 1,381 6,356 (Charged) / credited: To profit or loss (1,108) (27) - 278 (857) To other comprehensive income - - 105 - 105 At 30 June 2025 3,476 364 105 1,659 5,604 2026 MOVEMENTS TAX LOSSES DEVELOPMENT & PRODUCTION EXPENDITURE US$’000 CASH FLOW HEDGES US$’000 PROVISIONS & OTHER US$’000 TOTAL US$’000 AT JULY 2025 - 21,032 - 576 21,608 (Charged) / credited: Acquisition of Cue Energy Resources 3,540 9,029 - 461 13,030 to profit or loss 3,132 9,000 - 2,452 14,584 At 30 June 2026 6,672 39,061 - 3,489 49,222 2025 MOVEMENTS TAX LOSSES DEVELOPMENT & PRODUCTION EXPENDITURE US$’000 CASH FLOW HEDGES US$’000 PROVISIONS & OTHER US$’000 TOTAL US$’000 AT JULY 2024 - 14,853 29 328 15,210 (Charged) / credited: to profit or loss - 6,179 - 248 6,427 to other comprehensive income - - (29) - (29) At 30 June 2025 - 21,032 - 576 21,608 (g) Current tax payable CONSOLIDATED 2026 US$’000 2025 US$’000 Current tax payable – China 1,374 149 Current tax payable – Australia 15 - Current tax payable – Cue Energy Resources Limited 2,674 - Current tax payable – New Zealand 656 1,996 Current royalty tax payable – New Zealand 829 1,775 Total current tax payable 5,548 3,920
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Horizon Oil Annual Report 2026 76 The Group is party to derivative financial instruments in the normal course of business in order to hedge exposure to oil price, interest rate and foreign exchange fluctuations in accordance with the Group’s financial risk management policies (refer to Note 20a). Oil price swap contracts (cash flow hedges) During the financial year, oil price hedging was undertaken as a risk mitigation measure to mitigate the concentration of oil price exposure on Maari and Block 22/12 liftings whereby oil is produced over approximately two-to-three-month periods but sold subject to the average oil price in the month which it is lifted. At 30 June 2026, the Group had 180,000 bbls of crude oil hedged through Brent oil price swaps at a weighted average price of US$77.48/bbl covering the period to December 2026. The gain or loss arising from re -measurement of the hedg e-accounted instruments at fair value is deferred in equity in the hedging reserve, to the extent that the hedge is effective, and re- classified into profit or loss when the hedged transaction is recognised. The ineffective portion is recognised in profit or loss im mediately. During the financial year, a net loss of US$10,175,005 (2025: net gain of US$1,181,245) was transferred to profit or loss and included in revenue. Note 11 Other assets CONSOLIDATED 2026 US$’000 2025 US$’000 CURRENT Prepayments 637 557 Loan advanced to associate (a) 2,377 - Acquisition related deposits - 1,849 Total current other assets 3,014 2,406 NON-CURRENT Loan advanced to associate (a) 951 - Environmental and security bonds 881 - Total non-current other assets 1,832 - (a) During the financial year, the Group advanced a $5 million loan (acquisition credit facility) to Matahio Energy, an associate in the MH Energy Thailand joint venture. The loan has a maturity date of 31 December 2027 and is subject to a market interest rate of SOFR plus 6.0%. As noted in Note 27, the terms of the loan are made on normal commercial terms no more favourable than those available to external parties. Note 7 Cash and cash equivalents CONSOLIDATED 2026 US$’000 2025 US$’000 Cash at bank and on hand1 33,841 18,852 Restricted cash2 3,435 3,275 Deposits3 124 17,655 Total cash and cash equivalents 37,400 39,782 1 Cash at bank is held in interest bearing operating accounts. 2 Under the terms of Horizon’s Debt Facility, a minimum of A$ 5 million is required to be maintained in a D ebt Service Reserves Account with Macquarie Bank. 3 Includes on-call and short-term cash deposits with maturities less than 3-months. Note 8 Receivables CONSOLIDATED 2026 US$’000 2025 US$’000 Trade and other receivables1 14,731 14,507 Total receivables 14,731 14,507 1 Of this balance US$Nil (2025: US$Nil) related to amounts receivable from related parties. Refer to Note 27 for further details. Information about the Company’s exposure to credit and market risks, and collectability of overdue amounts, is included in Note 20(B). Note 9 Inventories CONSOLIDATED 2026 US$’000 2025 US$’000 Crude oil, at costs 8,783 2,058 Drilling and workover spares inventory 2,192 1,675 Total inventories 10,975 3,733 Note 10 Derivative financial instruments CONSOLIDATED 2026 US$’000 2025 US$’000 CURRENT: Derivative asset – foreign exchange contracts – cash flow hedges - 16 Derivative asset – oil price swaps – cash flow hedges 713 390 Total derivative asset 713 406 Derivative liability – foreign exchange contracts – cash flow hedges - (2) Total derivative liability - (2)
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Horizon Oil Annual Report 2026 77 The Group is party to derivative financial instruments in the normal course of business in order to hedge exposure to oil price, interest rate and foreign exchange fluctuations in accordance with the Group’s financial risk management policies (refer to Note 20a). Oil price swap contracts (cash flow hedges) During the financial year, oil price hedging was undertaken as a risk mitigation measure to mitigate the concentration of oil price exposure on Maari and Block 22/12 liftings whereby oil is produced over approximately two-to-three-month periods but sold subject to the average oil price in the month which it is lifted. At 30 June 2026, the Group had 180,000 bbls of crude oil hedged through Brent oil price swaps at a weighted average price of US$77.48/bbl covering the period to December 2026. The gain or loss arising from re -measurement of the hedg e-accounted instruments at fair value is deferred in equity in the hedging reserve, to the extent that the hedge is effective, and re- classified into profit or loss when the hedged transaction is recognised. The ineffective portion is recognised in profit or loss im mediately. During the financial year, a net loss of US$10,175,005 (2025: net gain of US$1,181,245) was transferred to profit or loss and included in revenue. Note 11 Other assets CONSOLIDATED 2026 US$’000 2025 US$’000 CURRENT Prepayments 637 557 Loan advanced to associate (a) 2,377 - Acquisition related deposits - 1,849 Total current other assets 3,014 2,406 NON-CURRENT Loan advanced to associate (a) 951 - Environmental and security bonds 881 - Total non-current other assets 1,832 - (a) During the financial year, the Group advanced a $5 million loan (acquisition credit facility) to Matahio Energy, an associate in the MH Energy Thailand joint venture. The loan has a maturity date of 31 December 2027 and is subject to a market interest rate of SOFR plus 6.0%. As noted in Note 27, the terms of the loan are made on normal commercial terms no more favourable than those available to external parties. Note 7 Cash and cash equivalents CONSOLIDATED 2026 US$’000 2025 US$’000 Cash at bank and on hand1 33,841 18,852 Restricted cash2 3,435 3,275 Deposits3 124 17,655 Total cash and cash equivalents 37,400 39,782 1 Cash at bank is held in interest bearing operating accounts. 2 Under the terms of Horizon’s Debt Facility, a minimum of A$ 5 million is required to be maintained in a D ebt Service Reserves Account with Macquarie Bank. 3 Includes on-call and short-term cash deposits with maturities less than 3-months. Note 8 Receivables CONSOLIDATED 2026 US$’000 2025 US$’000 Trade and other receivables1 14,731 14,507 Total receivables 14,731 14,507 1 Of this balance US$Nil (2025: US$Nil) related to amounts receivable from related parties. Refer to Note 27 for further details. Information about the Company’s exposure to credit and market risks, and collectability of overdue amounts, is included in Note 20(B). Note 9 Inventories CONSOLIDATED 2026 US$’000 2025 US$’000 Crude oil, at costs 8,783 2,058 Drilling and workover spares inventory 2,192 1,675 Total inventories 10,975 3,733 Note 10 Derivative financial instruments CONSOLIDATED 2026 US$’000 2025 US$’000 CURRENT: Derivative asset – foreign exchange contracts – cash flow hedges - 16 Derivative asset – oil price swaps – cash flow hedges 713 390 Total derivative asset 713 406 Derivative liability – foreign exchange contracts – cash flow hedges - (2) Total derivative liability - (2)
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Horizon Oil Annual Report 2026 78 Thailand LLC’s post -acquisition profit or loss and any distributions received. Horizon’s share of MH Energy Thailand LLC’s profit after tax is recognised in the consolidated statement of comprehensive income as ‘Share of net profit from joint venture’. Further information regarding the financial position and financial performance of MH Energy Thailand LLC for the year ended 30 June 2026 is disclosed below 30 JUNE 2026 US$’000 30 JUNE 2025 US$’000 Summarised net asset position Current assets 6,634 - Non-current assets 51,775 - Current liabilities (7,817) - Non-current liabilities (23,384) - Closing net assets (gross) 27,208 - Group’s share of net assets in joint venture (75%) 20,406 - Summarised income statement Gross profit 20,984 - Other expenses (1,726) - Depreciation and amortisation (9,132) - Profit before tax 10,126 - Income tax expense (5,230) - Net profit after tax for the period (gross) 4,896 - Group’s share of net profit of joint venture (75%) 3,672 - We note that the entity is in a net current liability position as at 30 June 2026. However, forecast cash flows from producin g assets are expected to be sufficient to meet all obligations as they fall due. The largest current liability relates to the annual income tax liability, which is payable in March 2027. 30 JUNE 2026 US$’000 30 JUNE 2025 US$’000 Reconciliation to carrying amount Cost at completion date 23,046 - Less: Dividends received/receivable in cash (6,312) - Add: Group’s share of net profit 3,672 - Closing balance 20,406 - Note 12 Intangible assets CONSOLIDATED CURRENT ASSETS NEW ZEALAND CARBON CREDITS1 US$’000 TOTAL US$’000 FINANCIAL YEAR ENDED 30 JUNE 2025 Cost – 1 July 2024 843 843 Additions 256 256 Disposals – settlements2 (514) (514) CLOSING VALUE 585 585 FINANCIAL YEAR ENDED 30 JUNE 2026 Cost – 1 July 2025 585 585 Additions 262 262 Disposals – settlements2 (494) (494) Impairment of carbon units3 (246) (246) CLOSING VALUE 107 107 1 The Group acquires New Zealand Units ((NZUs) also referred to as carbon credits) to surrender to the New Zealand Government through the Environmental Protection Authority, for its proportionate share of the Maari/Manaia fields direct greenhouse gas emissio ns for the calendar year. NZUs are tradable instruments with transactions taking place on the New Zealand Emissions Trading Register, which is operated by the Environmental Protection Authority. The NZUs are recorded at cost and are not amortised and are tested for impairment at each balance sheet date. 2 The Company’s obligation for the 2025 calendar year was settled in May 2026 whereby NZU’s on hand were surrendered to the Environmental Protection Authority. As at 30 June 2026, the Group had 4,620 NZU’s on hand (30 June 2025: 15,836 NZU’s). 3 During 2026 financial year the Company assessed the recoverability of the New Zealand carbon units and recorded an impairment expense as the spot price at the 31 December 2025 balance sheet date was less than the historical cost of the units. As at 30 June 2026, the revised carrying value of the NZU prices are in line with current market price. Note 13 Investments CONSOLIDATED NON-CURRENT ASSETS 2026 US$’000 2025 US$’000 Fair value of investment in unlisted shares – Wundowie Carbon Pty Ltd (a) - 947 Investment in joint venture – MH Energy Thailand LLC (b) 20,406 - Total investments 20,406 947 (a) Wundowie Carbon Pty Ltd During the financial year, Horizon’s revalued its equity interest in Wundowie Carbon (formerly Re -Vi) to a $nil carrying value. Horizon was notified shortly after year end that Wundowie management have set out to wind -down the company and there is no expected distribution to equity holders. The revaluation adjustment is recognised in other comprehensive income. (b) MH Energy Thailand LLC (MHET) During the financial year, the Group completed the acquisition of Exxon Mobil Exploration and Production Khorat LLC, which w a s s u b s e q u e n t l y r e n a m e d M H E n e r g y T h a i l a n d L L C . T h e H o r i z o n G r o u p o w n s a 7 5 % s h a r e o f M H E n e r g y T h a i l a n d L L C , resulting in an effective 7.5% interest in the Sinphuhorm producing gas field and an effective 60% interest in the Nam Phong producing gas field. The effective date of the transaction was 1 January 2025 with revenues earned and costs incurred from the effective date to the completion date, 1 August 2025, adjusted against the initial purchase consideration. MH Energy Thailand LLC is governed by a Shareholder Agreement that require unanimous consent for all relevant activities of the business, which give rise to a joint control regardless of the equity holding by Horizon. As such, Horizon’s investment in MH Energy Thailand LLC is classified as a joint venture and is accounted for using the equity method of accounting. Under the equity method, the investment is initially recognised at cost and subsequently adjusted for Horizon’s share of MH Energy
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Horizon Oil Annual Report 2026 79 Thailand LLC’s post -acquisition profit or loss and any distributions received. Horizon’s share of MH Energy Thailand LLC’s profit after tax is recognised in the consolidated statement of comprehensive income as ‘Share of net profit from joint venture’. Further information regarding the financial position and financial performance of MH Energy Thailand LLC for the year ended 30 June 2026 is disclosed below 30 JUNE 2026 US$’000 30 JUNE 2025 US$’000 Summarised net asset position Current assets 6,634 - Non-current assets 51,775 - Current liabilities (7,817) - Non-current liabilities (23,384) - Closing net assets (gross) 27,208 - Group’s share of net assets in joint venture (75%) 20,406 - Summarised income statement Gross profit 20,984 - Other expenses (1,726) - Depreciation and amortisation (9,132) - Profit before tax 10,126 - Income tax expense (5,230) - Net profit after tax for the period (gross) 4,896 - Group’s share of net profit of joint venture (75%) 3,672 - We note that the entity is in a net current liability position as at 30 June 2026. However, forecast cash flows from producin g assets are expected to be sufficient to meet all obligations as they fall due. The largest current liability relates to the annual income tax liability, which is payable in March 2027. 30 JUNE 2026 US$’000 30 JUNE 2025 US$’000 Reconciliation to carrying amount Cost at completion date 23,046 - Less: Dividends received/receivable in cash (6,312) - Add: Group’s share of net profit 3,672 - Closing balance 20,406 - Note 12 Intangible assets CONSOLIDATED CURRENT ASSETS NEW ZEALAND CARBON CREDITS1 US$’000 TOTAL US$’000 FINANCIAL YEAR ENDED 30 JUNE 2025 Cost – 1 July 2024 843 843 Additions 256 256 Disposals – settlements2 (514) (514) CLOSING VALUE 585 585 FINANCIAL YEAR ENDED 30 JUNE 2026 Cost – 1 July 2025 585 585 Additions 262 262 Disposals – settlements2 (494) (494) Impairment of carbon units3 (246) (246) CLOSING VALUE 107 107 1 The Group acquires New Zealand Units ((NZUs) also referred to as carbon credits) to surrender to the New Zealand Government through the Environmental Protection Authority, for its proportionate share of the Maari/Manaia fields direct greenhouse gas emissio ns for the calendar year. NZUs are tradable instruments with transactions taking place on the New Zealand Emissions Trading Register, which is operated by the Environmental Protection Authority. The NZUs are recorded at cost and are not amortised and are tested for impairment at each balance sheet date. 2 The Company’s obligation for the 2025 calendar year was settled in May 2026 whereby NZU’s on hand were surrendered to the Environmental Protection Authority. As at 30 June 2026, the Group had 4,620 NZU’s on hand (30 June 2025: 15,836 NZU’s). 3 During 2026 financial year the Company assessed the recoverability of the New Zealand carbon units and recorded an impairment expense as the spot price at the 31 December 2025 balance sheet date was less than the historical cost of the units. As at 30 June 2026, the revised carrying value of the NZU prices are in line with current market price. Note 13 Investments CONSOLIDATED NON-CURRENT ASSETS 2026 US$’000 2025 US$’000 Fair value of investment in unlisted shares – Wundowie Carbon Pty Ltd (a) - 947 Investment in joint venture – MH Energy Thailand LLC (b) 20,406 - Total investments 20,406 947 (a) Wundowie Carbon Pty Ltd During the financial year, Horizon’s revalued its equity interest in Wundowie Carbon (formerly Re -Vi) to a $nil carrying value. Horizon was notified shortly after year end that Wundowie management have set out to wind -down the company and there is no expected distribution to equity holders. The revaluation adjustment is recognised in other comprehensive income. (b) MH Energy Thailand LLC (MHET) During the financial year, the Group completed the acquisition of Exxon Mobil Exploration and Production Khorat LLC, which w a s s u b s e q u e n t l y r e n a m e d M H E n e r g y T h a i l a n d L L C . T h e H o r i z o n G r o u p o w n s a 7 5 % s h a r e o f M H E n e r g y T h a i l a n d L L C , resulting in an effective 7.5% interest in the Sinphuhorm producing gas field and an effective 60% interest in the Nam Phong producing gas field. The effective date of the transaction was 1 January 2025 with revenues earned and costs incurred from the effective date to the completion date, 1 August 2025, adjusted against the initial purchase consideration. MH Energy Thailand LLC is governed by a Shareholder Agreement that require unanimous consent for all relevant activities of the business, which give rise to a joint control regardless of the equity holding by Horizon. As such, Horizon’s investment in MH Energy Thailand LLC is classified as a joint venture and is accounted for using the equity method of accounting. Under the equity method, the investment is initially recognised at cost and subsequently adjusted for Horizon’s share of MH Energy
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Horizon Oil Annual Report 2026 80 Note 15 Payables CONSOLIDATED 2026 US$’000 2025 US$’000 CURRENT LIABILITIES Trade creditors 6,652 893 Share of joint operation creditors and accruals 9,234 10,695 ETS obligation1 243 346 Lease liabilities 180 113 Other creditors 6,042 2,436 Total current liabilities 22,351 14,483 NON-CURRENT LIABILITIES Mereenie acquisition – contingent payment2 2,629 2,460 Lease liabilities 299 318 Other creditors 140 116 Total non-current liabilities 3,068 2,894 1 The ETS liability represents the Group’s obligation to the New Zealand Government for the company’s proportionate share of the Maari/Manaia fields greenhouse gas emissions. The ETS obligation is recorded at the cost of the units acquired to settle the obligation. When the number of units required to settle the obligation exceeds the units on hand, the excess will be accounted for at the cost of obtaining the incremental units required to settle the obligation. 2 A future payment of A$4 million is payable to Macquarie Bank as purchase consideration for the acquisition of the Mereenie oil and gas fields subject to certain conditions being met. Note 16 Borrowings CONSOLIDATED 2026 US$’000 2025 US$’000 CURRENT: Debt Facility1 (A) 21,180 8,236 NON-CURRENT: Debt Facility1 (A) 26,311 17,419 Total borrowings 47,491 25,655 1 Borrowings are shown net of associated transaction costs. A. Debt Facility Horizon has a senior debt facility agreement with Macquarie Bank which is structured as a reserve -based lending facility with semi-annual repayments. Lender security is over Horizon Group’s production assets, including security over the shares or membership interests of the subsidiaries holding the producing assets. The security package includes security over the shares in Horizon Australia Energy Limited, Horizon Oil (Beibu) Limited, Horizon Oil International Limited and Horizon’s 75% shareholding in MH Energy Thailand LLC (the subsidiary that holds the Sinphuhorm and Nam Phong gas fields). The facility is subject to a minimum facility life coverage ratio of the net present value of estimated future cash flows fro m the Mereenie oil and gas field, Block 22/12 oil field and Sinphuhorm gas field as against the aggregate principal amount outstandi n g un d e r t he f a c i l it y . E s t im a t e d f u t ur e c a sh f lo w s a r e d e pe n de nt o n , am o n g s t ot he r th i n g s , o i l an d ga s p r i c e s , reserve estimates, operating and capital cost estimates. Horizon has guaranteed the performance of the subsidiaries which are obligors in relation to the loan facility from Macquarie Bank. The senior debt facility is subject to a minimum liquidity requirement that the Horizon Group maintains a minimum cash balance of US$10 million. Note 14 Oil and gas assets CONSOLIDATED 2026 US$’000 2025 US$’000 DEVELOPMENT AND PRODUCTION PHASE EXPENDITURE Producing oil and gas property acquisition, deferred geological, seismic and drilling, production and distribution facilities and other development expenditure 569,585 562,483 Acquisition – Cue Energy Resources Limited 79,628 - Reassessment of restoration obligation 201 949 Carried forward accumulated impairment losses (37,581) (37,581) Less accumulated amortisation (460,138) (427,982) Total oil and gas assets 151,695 97,869 The reconciliation of development and production phase expenditure carried forward above is as follows: CONSOLIDATED DEVELOPMENT PHASE EXPENDITURE US$’000 PRODUCTION PHASE EXPENDITURE US$’000 TOTAL US$’000 BALANCE AT 1 JULY 2024 - 119,747 119,747 Amortisation incurred - (32,967) (32,967) Change in restoration obligation - 949 949 Production costs incurred during financial year - 10,140 10,140 Balance at 30 June 2025 - 97,869 97,869 Amortisation incurred - (32,156) (32,156) Change in restoration obligation - 201 201 Acquisition – Cue Energy Resources Limited 1,230 78,398 79,628 Production costs incurred during financial year - 6,153 6,153 Balance at 30 June 2026 1,230 150,465 151,695
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Horizon Oil Annual Report 2026 81 Note 15 Payables CONSOLIDATED 2026 US$’000 2025 US$’000 CURRENT LIABILITIES Trade creditors 6,652 893 Share of joint operation creditors and accruals 9,234 10,695 ETS obligation1 243 346 Lease liabilities 180 113 Other creditors 6,042 2,436 Total current liabilities 22,351 14,483 NON-CURRENT LIABILITIES Mereenie acquisition – contingent payment2 2,629 2,460 Lease liabilities 299 318 Other creditors 140 116 Total non-current liabilities 3,068 2,894 1 The ETS liability represents the Group’s obligation to the New Zealand Government for the company’s proportionate share of the Maari/Manaia fields greenhouse gas emissions. The ETS obligation is recorded at the cost of the units acquired to settle the obligation. When the number of units required to settle the obligation exceeds the units on hand, the excess will be accounted for at the cost of obtaining the incremental units required to settle the obligation. 2 A future payment of A$4 million is payable to Macquarie Bank as purchase consideration for the acquisition of the Mereenie oil and gas fields subject to certain conditions being met. Note 16 Borrowings CONSOLIDATED 2026 US$’000 2025 US$’000 CURRENT: Debt Facility1 (A) 21,180 8,236 NON-CURRENT: Debt Facility1 (A) 26,311 17,419 Total borrowings 47,491 25,655 1 Borrowings are shown net of associated transaction costs. A. Debt Facility Horizon has a senior debt facility agreement with Macquarie Bank which is structured as a reserve -based lending facility with semi-annual repayments. Lender security is over Horizon Group’s production assets, including security over the shares or membership interests of the subsidiaries holding the producing assets. The security package includes security over the shares in Horizon Australia Energy Limited, Horizon Oil (Beibu) Limited, Horizon Oil International Limited and Horizon’s 75% shareholding in MH Energy Thailand LLC (the subsidiary that holds the Sinphuhorm and Nam Phong gas fields). The facility is subject to a minimum facility life coverage ratio of the net present value of estimated future cash flows fro m the Mereenie oil and gas field, Block 22/12 oil field and Sinphuhorm gas field as against the aggregate principal amount outstandi n g un d e r t he f a c i l it y . E s t im a t e d f u t ur e c a sh f lo w s a r e d e pe n de nt o n , am o n g s t ot he r th i n g s , o i l an d ga s p r i c e s , reserve estimates, operating and capital cost estimates. Horizon has guaranteed the performance of the subsidiaries which are obligors in relation to the loan facility from Macquarie Bank. The senior debt facility is subject to a minimum liquidity requirement that the Horizon Group maintains a minimum cash balance of US$10 million. Note 14 Oil and gas assets CONSOLIDATED 2026 US$’000 2025 US$’000 DEVELOPMENT AND PRODUCTION PHASE EXPENDITURE Producing oil and gas property acquisition, deferred geological, seismic and drilling, production and distribution facilities and other development expenditure 569,585 562,483 Acquisition – Cue Energy Resources Limited 79,628 - Reassessment of restoration obligation 201 949 Carried forward accumulated impairment losses (37,581) (37,581) Less accumulated amortisation (460,138) (427,982) Total oil and gas assets 151,695 97,869 The reconciliation of development and production phase expenditure carried forward above is as follows: CONSOLIDATED DEVELOPMENT PHASE EXPENDITURE US$’000 PRODUCTION PHASE EXPENDITURE US$’000 TOTAL US$’000 BALANCE AT 1 JULY 2024 - 119,747 119,747 Amortisation incurred - (32,967) (32,967) Change in restoration obligation - 949 949 Production costs incurred during financial year - 10,140 10,140 Balance at 30 June 2025 - 97,869 97,869 Amortisation incurred - (32,156) (32,156) Change in restoration obligation - 201 201 Acquisition – Cue Energy Resources Limited 1,230 78,398 79,628 Production costs incurred during financial year - 6,153 6,153 Balance at 30 June 2026 1,230 150,465 151,695
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Horizon Oil Annual Report 2026 82 Note 17 Non-current Provisions CONSOLIDATED 2026 US$’000 2025 US$’000 Make up gas provision 2,264 - Restoration provisions (a) 88,784 64,435 Total non-current provisions 91,048 64,435 (a) The reconciliation of the movement in the total of the restoration provisions is as follows: CONSOLIDATED 2026 US$’000 2025 US$’000 Balance at beginning of financial year 64,435 61,459 Acquisition – Cue Energy Resources Limited 21,356 - Additional provision during financial year 68 - Unwinding of discount 2,768 2,643 Release of restoration provision - (994) Effect of change in inflation, discount and FX rates 157 1,327 Balance at end of financial year 88,784 64,435 The Group holds provisions for the future decommission of oil and natural gas production facilities and pipelines at the end of their economic lives. The provisions predominantly relate to cost estimates for the plugging and abandonment of wells and the removal and disposal of platforms and pipelines, with added complexity around offshore facilities and wells. In most instances the removal of these assets will occur well into the future and the precise legal requirements that will require to be met are often uncertain. Decommissioning technologies and related costs are also constantly changing, as are political, environmental, safety and public expectations further adding to the uncertai nty. The estimate of future removal costs therefore requires management to make judgements around the timing of the required restoration, rehabilitation and decommissioning activities, as well as the discount rate, inflation and foreign exchanges rates where applicable. The group performs periodic and regular (at least every 6 months) assessment of its restoration liabilities, and the carrying amount is updated accordingly. The weighted average discount rates used to measure the Group’s provision balances at 30 June 2026 were determined with reference to long-dated government bonds in the United States (US), New Zealand (NZ), European Union (EU) and Australia (AU), reflecting the expected timing of future cash outflows. Nominal discount rates applied ranged from 4.2% to 4.4% for US dollar-denominated costs, 3.8% to 4.3% for New Zealand dollar-denominated costs, 2.8% to 3.3% for euro-denominated costs, and 5.4% for Australian dollar-denominated costs. Future cost estimates were predominantly escalated using an inflation rate of 2.0%, consistent with the long -term inflation targets of the respective central banks. Costs denominated in foreign currencies (AUD, NZD and EUR) were translated into US dollars using the spot exchange rates prevailing at 30 June 2026. New Zealand, Maari Restoration The Maari restoration provision was reassessed during FY26 in accordance with AASB 137 Provisions, Contingent Liabilities and Contingent Assets. The underlying decommissioning cost estimate, which was comprehensively revised during FY23 as part of the Joint Venture's submission of a decommissioning plan and cost estimate to the New Zealand regulator, remained unchanged at 30 June 2026. Those esti mates continue to be based on detailed third -party engineering studies and cost assessments. During the financial year, New Zealand Petroleum & Minerals Department (NZPAM) granted a ten-year extension of the Maari permit (PMP 38160), extending its term from 1 December 2027 to 1 December 2037. The extension provides the JV with sufficient time to plan for the orderly decommissioning of the Maari fields, including maturing its underlying cost estimates and providing financial assurance to the regulator. Below is a summary of the various tranches contained within the debt facility: − Tranche A – During the financial year, the Group reached financial close on an increase in the Tranche A facility limit of A$10 million. The additional funding was utilised to partially fund the acquisition of a 75% equity interest in MH Energy Thailand LLC. As at 30 June 2026, drawings under Tranche A totalled A$43.2 million. The tranche amortises through to maturity on 30 June 2029 and bears interest at BBSW plus 5.0% per annum. − Tranche B1 – During the financial year, the Group reached financial close on Tranche B1 and fully drew the US$15 million t r a n c h e t o p a r t i a l l y f u n d t h e a c q u i s i t i o n o f a 7 5 % e q u i t y i n t e r e s t i n M H E n e r g y T h a i l a n d L L C . A s a t 3 0 J u n e 2 0 2 6 , outstanding borrowing s u n d e r t h i s t r a n c h e w e r e U S $ 9 . 0 m i l l i o n . T h e t r a n c h e a m o r t i s e s t h r o u g h t o m a t u r i t y o n 3 1 December 2027 and bears interest at SOFR plus 5.0% per annum. − Tranche B2 – During the financial year, the Group reached financial close on Tranche B2 and fully drew the US$10 million facility to partially fund the acquisition of an initial 19.99% equity interest in Cue Energy Resources Limited pursuant to the pre-bid agreement with Echelon Resources. As at 30 June 2026, outstanding borrowings under this tranche were US$10.0 million. The tranche amortises through to maturity on 31 December 2027 and bears interest at SOFR plus 6.0% per annum. At 30 June 2026, all available tranches under the Macquarie Bank debt facility were fully drawn, totalling US$48.7 million. The Group remained in compliance with all financial covenants associated with the facility at 30 June 2026. B. Net debt reconciliation This section sets out an analysis of net debt and the movements in net debt for each of the periods presented. CONSOLIDATED 2026 US$’000 2025 US$’000 Cash and cash equivalents 37,400 39,782 Borrowings2 – repayments within one year (including overdraft) (21,799) (8,351) Borrowings2 – repayments after one year and in five years (including overdraft) (26,884) (17,758) Lease liabilities (479) (431) Net (debt)/cash (11,762) 13,242 Cash and liquid investments 37,400 39,782 Gross debt2 – variable interest rates (48,683) (26,109) Lease liabilities (479) (431) Net (debt)/cash (11,762) 13,242 2 Borrowings and gross debt represent the nominal value of the Debt Facility drawn down. CASHFLOWS NON-CASH CHANGES OPENING 1 JULY 2025 DRAWDOWN REPAYMENTS FOREIGN EXCHANGE MOVEMENTS AMORTISATION OF TRANSACTION COSTS CLOSING 30 JUNE 2026 Debt facility3 25,655 30,253 (10,567) 1,638 512 47,491 Total liabilities from financing activities 25,655 30,253 (10,567) 1,638 512 47,491 3 Borrowings are shown net of associated transaction costs.
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Horizon Oil Annual Report 2026 83 Note 17 Non-current Provisions CONSOLIDATED 2026 US$’000 2025 US$’000 Make up gas provision 2,264 - Restoration provisions (a) 88,784 64,435 Total non-current provisions 91,048 64,435 (a) The reconciliation of the movement in the total of the restoration provisions is as follows: CONSOLIDATED 2026 US$’000 2025 US$’000 Balance at beginning of financial year 64,435 61,459 Acquisition – Cue Energy Resources Limited 21,356 - Additional provision during financial year 68 - Unwinding of discount 2,768 2,643 Release of restoration provision - (994) Effect of change in inflation, discount and FX rates 157 1,327 Balance at end of financial year 88,784 64,435 The Group holds provisions for the future decommission of oil and natural gas production facilities and pipelines at the end of their economic lives. The provisions predominantly relate to cost estimates for the plugging and abandonment of wells and the removal and disposal of platforms and pipelines, with added complexity around offshore facilities and wells. In most instances the removal of these assets will occur well into the future and the precise legal requirements that will require to be met are often uncertain. Decommissioning technologies and related costs are also constantly changing, as are political, environmental, safety and public expectations further adding to the uncertai nty. The estimate of future removal costs therefore requires management to make judgements around the timing of the required restoration, rehabilitation and decommissioning activities, as well as the discount rate, inflation and foreign exchanges rates where applicable. The group performs periodic and regular (at least every 6 months) assessment of its restoration liabilities, and the carrying amount is updated accordingly. The weighted average discount rates used to measure the Group’s provision balances at 30 June 2026 were determined with reference to long-dated government bonds in the United States (US), New Zealand (NZ), European Union (EU) and Australia (AU), reflecting the expected timing of future cash outflows. Nominal discount rates applied ranged from 4.2% to 4.4% for US dollar-denominated costs, 3.8% to 4.3% for New Zealand dollar-denominated costs, 2.8% to 3.3% for euro-denominated costs, and 5.4% for Australian dollar-denominated costs. Future cost estimates were predominantly escalated using an inflation rate of 2.0%, consistent with the long -term inflation targets of the respective central banks. Costs denominated in foreign currencies (AUD, NZD and EUR) were translated into US dollars using the spot exchange rates prevailing at 30 June 2026. New Zealand, Maari Restoration The Maari restoration provision was reassessed during FY26 in accordance with AASB 137 Provisions, Contingent Liabilities and Contingent Assets. The underlying decommissioning cost estimate, which was comprehensively revised during FY23 as part of the Joint Venture's submission of a decommissioning plan and cost estimate to the New Zealand regulator, remained unchanged at 30 June 2026. Those esti mates continue to be based on detailed third -party engineering studies and cost assessments. During the financial year, New Zealand Petroleum & Minerals Department (NZPAM) granted a ten-year extension of the Maari permit (PMP 38160), extending its term from 1 December 2027 to 1 December 2037. The extension provides the JV with sufficient time to plan for the orderly decommissioning of the Maari fields, including maturing its underlying cost estimates and providing financial assurance to the regulator. Below is a summary of the various tranches contained within the debt facility: − Tranche A – During the financial year, the Group reached financial close on an increase in the Tranche A facility limit of A$10 million. The additional funding was utilised to partially fund the acquisition of a 75% equity interest in MH Energy Thailand LLC. As at 30 June 2026, drawings under Tranche A totalled A$43.2 million. The tranche amortises through to maturity on 30 June 2029 and bears interest at BBSW plus 5.0% per annum. − Tranche B1 – During the financial year, the Group reached financial close on Tranche B1 and fully drew the US$15 million t r a n c h e t o p a r t i a l l y f u n d t h e a c q u i s i t i o n o f a 7 5 % e q u i t y i n t e r e s t i n M H E n e r g y T h a i l a n d L L C . A s a t 3 0 J u n e 2 0 2 6 , outstanding borrowing s u n d e r t h i s t r a n c h e w e r e U S $ 9 . 0 m i l l i o n . T h e t r a n c h e a m o r t i s e s t h r o u g h t o m a t u r i t y o n 3 1 December 2027 and bears interest at SOFR plus 5.0% per annum. − Tranche B2 – During the financial year, the Group reached financial close on Tranche B2 and fully drew the US$10 million facility to partially fund the acquisition of an initial 19.99% equity interest in Cue Energy Resources Limited pursuant to the pre-bid agreement with Echelon Resources. As at 30 June 2026, outstanding borrowings under this tranche were US$10.0 million. The tranche amortises through to maturity on 31 December 2027 and bears interest at SOFR plus 6.0% per annum. At 30 June 2026, all available tranches under the Macquarie Bank debt facility were fully drawn, totalling US$48.7 million. The Group remained in compliance with all financial covenants associated with the facility at 30 June 2026. B. Net debt reconciliation This section sets out an analysis of net debt and the movements in net debt for each of the periods presented. CONSOLIDATED 2026 US$’000 2025 US$’000 Cash and cash equivalents 37,400 39,782 Borrowings2 – repayments within one year (including overdraft) (21,799) (8,351) Borrowings2 – repayments after one year and in five years (including overdraft) (26,884) (17,758) Lease liabilities (479) (431) Net (debt)/cash (11,762) 13,242 Cash and liquid investments 37,400 39,782 Gross debt2 – variable interest rates (48,683) (26,109) Lease liabilities (479) (431) Net (debt)/cash (11,762) 13,242 2 Borrowings and gross debt represent the nominal value of the Debt Facility drawn down. CASHFLOWS NON-CASH CHANGES OPENING 1 JULY 2025 DRAWDOWN REPAYMENTS FOREIGN EXCHANGE MOVEMENTS AMORTISATION OF TRANSACTION COSTS CLOSING 30 JUNE 2026 Debt facility3 25,655 30,253 (10,567) 1,638 512 47,491 Total liabilities from financing activities 25,655 30,253 (10,567) 1,638 512 47,491 3 Borrowings are shown net of associated transaction costs.
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Horizon Oil Annual Report 2026 84 Note 18 Contributed equity CONSOLIDATED NUMBER OF SHARES CONSOLIDATED 2026 ‘000 2025 ‘000 2026 US$’000 2025 US$’000 A. Issued share capital Ordinary shares Fully paid 1,627,589 1,625,302 150,246 149,940 Partly paid to A$0.01 1,500 1,500 459 459 Total 1,629,089 1,626,802 150,705 150,399 B. Movements in ordinary share capital [[ii]] Ordinary shares (fully paid) DATE DETAILS NUMBER OF SHARES US$’000 30 June 2025 Balance as at 30 June 2025 1,625,301,966 149,940 28 August 2025 Issuance of new shares – settlement of Performance Rights 2,286,537 306 30 June 2026 Balance as at 30 June 2026 1,627,588,503 150,246 [[iiii]] Ordinary shares (partly paid to A$0.01) DATE DETAILS NUMBER OF SHARES US$’000 30 June 2026 Balance as at 30 June 2026 1,500,000 459 30 June 2025 Balance as at 30 June 2025 1,500,000 459 C. Ordinary shares Fully paid Fully paid ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of shares held. Voting rights are governed by the Company’s Constitution. In summary, on a show of hands every holder of ordinary shares present at a meeting in person or by proxy is entitled to one vote and upon a poll each fully paid ordinary share is entitled to one vote. Partly paid Partly paid ordinary shares are issued on exercise of employee options. The partly paid shares currently on issue are held by the Company following forfeiture by their original holder. The outstanding obligation in relation to the partly paid ordinary shares is payable either when called or by the date not exceeding 5 years from the grant date of the option which gave rise to the partly paid ordinary share. Partly paid ordinary shares entitle the holder to participate in dividends and the procee ds on winding up of the Company in proportion to the number of shares held. Voting rights are governed by the Company’s Constitution. In summary, on a show of hands every holder of partly paid ordinary shares present at a meeting in person or by proxy is entitled to one vote and upon a poll, is entitled to one vote to the proportion of the total issue price then paid up. D. Unlisted performance rights over unissued ordinary shares Information related to the Horizon Long Term Incentive Plan and Deferred STI Plan, including details of options issued, exercised and lapsed during the financial year and options outstanding at the end of the financial year is set out in Note 28. Australia, Mereenie Restoration During FY26, the Mereenie Joint Venture operator, Central Petroleum, commissioned an independent consulting firm to prepare an updated decommissioning cost estimate as at 30 June 2026. The estimated expiry date for the Mereenie permits (OL4 and OL5) is in 2044 (pending any future life extension), providing the JV the opportunity to continue to mature its underlying cost estimates and a Decommissioning Plan. China, Block 22/12 Restoration The Production Sharing Contract (PSC) granted in relation to the Block 22/12 fields in offshore Beibu Gulf required the joint venture partners to settle their decommissioning obligations in full. As at 30 June 2026, all obligations by the Group ha d been settled with $nil provision required. Cue Energy Resources (Cue) As part of the acquisition of a controlling interest in Cue, the Group has recognised the identifiable liabilities/restoration provisions assumed at the acquisition date. A summary of the Group’s restoration provision by asset/operating segments are detailed below: MAARI US$’000 MEREENIE US$’000 BLOCK 22/12 US$’000 CUE ENERGY US$’000 TOTAL Balance on 30 June 2025 57,386 7,049 - - 64,435 Acquisition – Cue Energy Resources Limited - - - 21,356 21,356 Additional provision - 68 - - 68 Unwinding of discount 2,313 443 - 12 2,768 Change in inflation, discount and FX rates 132 25 - - 157 Balance on 30 June 2026 59,831 7,585 - 21,368 88,784 Advances paid for restoration works - - - (4,377) (4,377) Unfunded restoration provision 59,831 7,585 - 16,991 84,407
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Horizon Oil Annual Report 2026 85 Note 18 Contributed equity CONSOLIDATED NUMBER OF SHARES CONSOLIDATED 2026 ‘000 2025 ‘000 2026 US$’000 2025 US$’000 A. Issued share capital Ordinary shares Fully paid 1,627,589 1,625,302 150,246 149,940 Partly paid to A$0.01 1,500 1,500 459 459 Total 1,629,089 1,626,802 150,705 150,399 B. Movements in ordinary share capital [[ii]] Ordinary shares (fully paid) DATE DETAILS NUMBER OF SHARES US$’000 30 June 2025 Balance as at 30 June 2025 1,625,301,966 149,940 28 August 2025 Issuance of new shares – settlement of Performance Rights 2,286,537 306 30 June 2026 Balance as at 30 June 2026 1,627,588,503 150,246 [[iiii]] Ordinary shares (partly paid to A$0.01) DATE DETAILS NUMBER OF SHARES US$’000 30 June 2026 Balance as at 30 June 2026 1,500,000 459 30 June 2025 Balance as at 30 June 2025 1,500,000 459 C. Ordinary shares Fully paid Fully paid ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of shares held. Voting rights are governed by the Company’s Constitution. In summary, on a show of hands every holder of ordinary shares present at a meeting in person or by proxy is entitled to one vote and upon a poll each fully paid ordinary share is entitled to one vote. Partly paid Partly paid ordinary shares are issued on exercise of employee options. The partly paid shares currently on issue are held by the Company following forfeiture by their original holder. The outstanding obligation in relation to the partly paid ordinary shares is payable either when called or by the date not exceeding 5 years from the grant date of the option which gave rise to the partly paid ordinary share. Partly paid ordinary shares entitle the holder to participate in dividends and the procee ds on winding up of the Company in proportion to the number of shares held. Voting rights are governed by the Company’s Constitution. In summary, on a show of hands every holder of partly paid ordinary shares present at a meeting in person or by proxy is entitled to one vote and upon a poll, is entitled to one vote to the proportion of the total issue price then paid up. D. Unlisted performance rights over unissued ordinary shares Information related to the Horizon Long Term Incentive Plan and Deferred STI Plan, including details of options issued, exercised and lapsed during the financial year and options outstanding at the end of the financial year is set out in Note 28. Australia, Mereenie Restoration During FY26, the Mereenie Joint Venture operator, Central Petroleum, commissioned an independent consulting firm to prepare an updated decommissioning cost estimate as at 30 June 2026. The estimated expiry date for the Mereenie permits (OL4 and OL5) is in 2044 (pending any future life extension), providing the JV the opportunity to continue to mature its underlying cost estimates and a Decommissioning Plan. China, Block 22/12 Restoration The Production Sharing Contract (PSC) granted in relation to the Block 22/12 fields in offshore Beibu Gulf required the joint venture partners to settle their decommissioning obligations in full. As at 30 June 2026, all obligations by the Group ha d been settled with $nil provision required. Cue Energy Resources (Cue) As part of the acquisition of a controlling interest in Cue, the Group has recognised the identifiable liabilities/restoration provisions assumed at the acquisition date. A summary of the Group’s restoration provision by asset/operating segments are detailed below: MAARI US$’000 MEREENIE US$’000 BLOCK 22/12 US$’000 CUE ENERGY US$’000 TOTAL Balance on 30 June 2025 57,386 7,049 - - 64,435 Acquisition – Cue Energy Resources Limited - - - 21,356 21,356 Additional provision - 68 - - 68 Unwinding of discount 2,313 443 - 12 2,768 Change in inflation, discount and FX rates 132 25 - - 157 Balance on 30 June 2026 59,831 7,585 - 21,368 88,784 Advances paid for restoration works - - - (4,377) (4,377) Unfunded restoration provision 59,831 7,585 - 16,991 84,407
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Horizon Oil Annual Report 2026 86 B. Accumulated losses CONSOLIDATED 2026 US$’000 2025 US$’000 Accumulated losses at beginning of financial year (158,640) (146,859) Net loss for financial year (18,928) (11,781) Accumulated losses at end of financial year (177,568) (158,640) C. Profit reserve CONSOLIDATED 2026 US$’000 2025 US$’000 Profit reserve at the beginning of the financial year 64,914 72,766 Parent company profit for financial year 29,577 24,028 Dividends paid (33,244) (31,880) Profit reserve at the end of the financial year 61,247 64,914 D. Nature and purpose of reserves Share-based payment reserve: The fair value of performance rights and deferred STI rights granted to employees results in an increase in equity upon recognition of the corresponding employee benefits expense, as described in the accounting policy set out in Note 1(W)([iii]). The Company has elected to retain any amounts originally recognised in the share -based payments reserve, regardless of whether the associated options or share appreciation rights are cancelled or lapse unexercised. Hedge reserve: Changes in the market value of the effective portion of derivatives is reflected directly in equity until such time as the hedge is ineffective or expires, as described in the accounting policy set out in Note 1(T). Treasury shares: Treasury shares are shares in Horizon that are held by the Horizon Employee Share Trust for the purpose of issuing shares under the Horizon Employee Option Scheme and the Horizon Long Term Incentive (LTI) Plan. Refer to Note 28 for further information. Shares issued to employees are recognised on a weighted average basis. Currency translation reserve: Exchange differences arising on translation of Horizon Australia Energy Pty Ltd and Cue Energy Resources Limited , from its functional currency of Australian dollars into the Group’s presentation currency of United States dollars, are recognised in other comprehensive income as described in the accounting policy set out in Note 1(F) and accumulated in a separate reserve within equity. Financial assets at FVOCI reserve: Financial assets at FVOCI refer to: 1. The Group’s investment in the unlisted equity securities of Wundowie Carbon Pty Ltd (formerly Re -Vi). During the year, a fair value loss of US$0.9 million (2025: nil) was recognised in other comprehensive income in accordance with the accounting policy set out in Note 1(P). The cumulative fair value movement has been recognised in the FVOCI reserve within equity. 2. The Group’s initial 19.99% equity interest in Cue Energy Resources Limited, acquired under the pre -bid agreement on 2 March 2026. Prior to 17 June 2026 (date of control), the investment was classified as a financial asset measured at fair value through other comprehensive income (FVOCI). Upon obtaining control, the previously held interest was remeasured to its Note 19 Reserves and retained profits CONSOLIDATED 2026 US$’000 2025 US$’000 A. RESERVES SHARE-BASED PAYMENTS RESERVE Movements: Balance at beginning of financial year 8,636 7,310 Employee share-based payments expense 1,500 1,597 Settlement of Performance Rights (588) (271) Balance at end of financial year 9,548 8,636 HEDGE RESERVE Movements: Balance at beginning of financial year 299 (76) Movement in net market value of hedge contracts 323 479 Deferred tax (102) (104) Balance at end of financial year 520 299 TREASURY SHARES Movements: Balance at beginning of financial year - - Acquisition of shares by the Employee Share Trust 306 304 Settlement of Performance Rights (306) (304) Balance at end of financial year - - CURRENCY TRANSLATION RESERVE Movements: Balance at beginning of financial year 94 7 Movement in currency translation (41) 87 Balance at end of financial year 53 94 FINANCIAL ASSETS AT FVOCI RESERVE Movements: Balance at beginning of financial year (404) - Revaluation of equity investment – Wundowie (947) (404) Revaluation of equity investment – 19.99% Cue pre-bid shares 1,179 - Balance at end of financial year (172) (404) EQUITY SETTLED CONSIDERATION RESERVE Movements: Balance at beginning of financial year - - Shares to be issued to Cue shareholders per Bidders Statement 21,768 - Impact of new share issue by Cue (60) Balance at end of financial year 21,708 - Total reserves 31,657 8,625
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Horizon Oil Annual Report 2026 87 B. Accumulated losses CONSOLIDATED 2026 US$’000 2025 US$’000 Accumulated losses at beginning of financial year (158,640) (146,859) Net loss for financial year (18,928) (11,781) Accumulated losses at end of financial year (177,568) (158,640) C. Profit reserve CONSOLIDATED 2026 US$’000 2025 US$’000 Profit reserve at the beginning of the financial year 64,914 72,766 Parent company profit for financial year 29,577 24,028 Dividends paid (33,244) (31,880) Profit reserve at the end of the financial year 61,247 64,914 D. Nature and purpose of reserves Share-based payment reserve: The fair value of performance rights and deferred STI rights granted to employees results in an increase in equity upon recognition of the corresponding employee benefits expense, as described in the accounting policy set out in Note 1(W)([iii]). The Company has elected to retain any amounts originally recognised in the share -based payments reserve, regardless of whether the associated options or share appreciation rights are cancelled or lapse unexercised. Hedge reserve: Changes in the market value of the effective portion of derivatives is reflected directly in equity until such time as the hedge is ineffective or expires, as described in the accounting policy set out in Note 1(T). Treasury shares: Treasury shares are shares in Horizon that are held by the Horizon Employee Share Trust for the purpose of issuing shares under the Horizon Employee Option Scheme and the Horizon Long Term Incentive (LTI) Plan. Refer to Note 28 for further information. Shares issued to employees are recognised on a weighted average basis. Currency translation reserve: Exchange differences arising on translation of Horizon Australia Energy Pty Ltd and Cue Energy Resources Limited , from its functional currency of Australian dollars into the Group’s presentation currency of United States dollars, are recognised in other comprehensive income as described in the accounting policy set out in Note 1(F) and accumulated in a separate reserve within equity. Financial assets at FVOCI reserve: Financial assets at FVOCI refer to: 1. The Group’s investment in the unlisted equity securities of Wundowie Carbon Pty Ltd (formerly Re -Vi). During the year, a fair value loss of US$0.9 million (2025: nil) was recognised in other comprehensive income in accordance with the accounting policy set out in Note 1(P). The cumulative fair value movement has been recognised in the FVOCI reserve within equity. 2. The Group’s initial 19.99% equity interest in Cue Energy Resources Limited, acquired under the pre -bid agreement on 2 March 2026. Prior to 17 June 2026 (date of control), the investment was classified as a financial asset measured at fair value through other comprehensive income (FVOCI). Upon obtaining control, the previously held interest was remeasured to its
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Horizon Oil Annual Report 2026 88 Foreign exchange risk arises when future commercial transactions and recognised financial assets and financial liabilities are denominated in a currency that is not the Group’s functional currency. The Group operates internationally and is exposed to foreign exchange risk arising predominately from Australian and New Zealand dollars, Chinese Renminbi and Indonesian Rupiah. The Group manages foreign exchange risk by monitoring forecast cash flows in currencies other than US dollars and ensuring that adequate Australian dollar and New Zealand dollar cash balances are maintained. The objective of the Group’s foreign exchange risk management policy is to ensure its financial viability despite potential p e r i o d s o f u n f a v o u r a b l e e x c h a n g e r a t e s . R e g u l a r s e n s i t i v i t y a n a l y s i s i s c o n d u c t e d t o e v a l u a t e t h e p o t e n t i a l i m p a c t o f unfavourable exchange rates on the Group’s future financial position. The results of this evaluation are used to determine the most appropriate risk mitigation tool to be used. The Group will hedge when it is deemed the most appropriate risk mitigation tool to be used. As at 30 June 2026, the Group had no foreign exchange contracts (30 June 2025: AUD 1.8 million and NZD 1.0 million). Exposure to foreign exchange risk The Group’s exposure to foreign exchange risk at the end of each reporting period was as follows: GROUP 30 JUNE 2026 30 JUNE 2025 AUD US$’000 NZD US$’000 RMB US$’000 IDR US’000 AUD US$’000 NZD US$’000 RMB US$’000 Cash and cash equivalents 15,165 1,381 - 28 13,074 1,086 - Receivables 3,826 135 - 3 2,108 179 - Current tax payable 15 1,484 1,374 - - 3,771 736 Current payables 6,553 937 2,827 1 1,887 - 57 Non-current payables 2,629 - - - 2,459 - - F o r t h e f i n a n c i a l y e a r e n d e d a n d a s a t 3 0 J u n e 2 026, if the currencies set out in the table below had strengthened or weakened against the US dollar by the percentage shown, with all other variables held constant, the net result for the financial year would increase / (decrease) and net assets would increase / (decrease) by: GROUP NET RESULT NET ASSETS NET RESULT NET ASSETS 2026 US$’000 2025 US$’000 2026 US$’000 2025 US$’000 2026 US$’000 2025 US$’000 2026 US$’000 2025 US$’000 Change in currency1 +10% +10% +10% +10% -10% -10% -10% -10% Australian dollar impact 383 482 686 759 (383) (482) (686) (759) New Zealand dollar impact 609 596 (65) (180) (609) (596) 65 180 Chinese Renminbi impact - - (315 (59) - - 315 59 Indonesian Rupiah impact - - (22) - - - 22 - 1 T h i s h a s b e e n b a s e d o n t h e c h a n g e i n t h e e x c h a n g e r a t e a g a i n s t t h e U S d o l l a r i n t h e f i n a n c i a l y e a r s e n d e d 3 0 J u n e 2 026 and 30 June 20 25. T h e s e n s i t i v i t y a n a l y s i s h a s b e e n b a s e d o n t h e s e n s i t i v i t y r a t e s w h e n r e p o r t i n g f o r e i g n e x c h a n g e r i s k i n t e r n a l l y t o k e y m a n a g e m e nt personnel and represents management’s assessment of the possible change in foreign exchange rates based on historic volatility. In management’s opinion, the sensitivity analysis is not fully representative of the inherent foreign exchange risk as the end of the reporting period exposure does not necessarily reflect the exposure during the course of the financial year. [ii] Commodity price risk Commodity price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of change in market commodity prices for crude oil and natural gas. The objective of the Group’s commodity price risk management policy is to ensure its financial viability despite potential periods of unfavourable prices. Regular sensitivity analysis is conducted to evaluate the potential impact of unfavourable prices on the Group’s future financial position. The results of this evaluation are used to determine the most appropriate risk acquisition-date fair value . Consistent with the Group’s FVOCI election, the resultant fair value gain of US$1.2 million was recognised in other comprehensive income. Equity settled consideration reserve: The equity settled consideration reserve holds the Group’s shares not yet issued under the off -market takeover offer for the shareholders of Cue Energy Resources Limited. Under the offer terms, Cue shareholders were entitled to receive 0.5625 Horizon shares for each Cue share held. Subsequent to the year end, these shares were issued and the balance transferred to contributed equity. Note 20 Financial risk management T h e G r o u p ' s a c t i v i t i e s e x p o s e i t t o a v a r i e t y o f f i n a n c i a l r i s k s : m a r k e t r i s k ( i n c l u d i n g c u r r e n c y r i s k , i n t e r e s t r a t e r i s k a nd commodity price risk); credit risk; liquidity risk; capital risk; and climate related and other emerging risks. The Group's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group. The Group uses derivative financial instruments such as oil price swaps, interest rate swaps and foreign exchange forward contracts, to hedge certain risk exposures. Derivatives are exclusively u s e d f o r h e d g i n g p u r p o s e s , i . e . n o t a s t r a d i n g o r o t h e r s p e c u l a t i v e i n s t r u m e n t s . T h e G r o u p u s e s d i f f e r e n t m e t h o d s t o measure the different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and commodity price risks, and aging analysis for credit risk. R i s k m an a g em en t i s c a r r ie d o u t b y th e f in a n ce f un c t i o n u n d e r p o l i c i es a p p r o v e d b y t h e B o a r d o f D i re c t o rs . T he f i n an c e function identifies, evaluates and if necessary hedges financial risks in close co -operation with Group management. The board provides w ritten principles for overall risk management, as well as written policies covering specific areas, such as mitigating foreign exchange, interest rate and credit risks and the use of derivative financial instruments. The Group has no off-balance sheet financial assets or liabilities as at the end of the reporting period. The Group held the following financial instruments at 30 June 2026 and 30 June 2025. CONSOLIDATED 2026 US$’000 2025 US$’000 FINANCIAL ASSETS Cash and cash equivalents 37,400 39,782 Receivables 14,731 14,507 Loan advanced to associate 3,328 - Derivative financial instruments 713 406 Total financial assets 56,172 54,695 FINANCIAL LIABILITIES Payables (current) 22,351 14,483 Current tax payable 5,548 3,920 Derivative financial instruments - 2 Payables (non-current) 3,068 2,894 Borrowings (net of borrowing costs capitalised) 47,491 25,655 Total financial liabilities 78,458 46,954 A. Market risk [i] Foreign exchange risk Foreign exchange risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because o f changes in foreign exchange rates.
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Horizon Oil Annual Report 2026 89 Foreign exchange risk arises when future commercial transactions and recognised financial assets and financial liabilities are denominated in a currency that is not the Group’s functional currency. The Group operates internationally and is exposed to foreign exchange risk arising predominately from Australian and New Zealand dollars, Chinese Renminbi and Indonesian Rupiah. The Group manages foreign exchange risk by monitoring forecast cash flows in currencies other than US dollars and ensuring that adequate Australian dollar and New Zealand dollar cash balances are maintained. The objective of the Group’s foreign exchange risk management policy is to ensure its financial viability despite potential p e r i o d s o f u n f a v o u r a b l e e x c h a n g e r a t e s . R e g u l a r s e n s i t i v i t y a n a l y s i s i s c o n d u c t e d t o e v a l u a t e t h e p o t e n t i a l i m p a c t o f unfavourable exchange rates on the Group’s future financial position. The results of this evaluation are used to determine the most appropriate risk mitigation tool to be used. The Group will hedge when it is deemed the most appropriate risk mitigation tool to be used. As at 30 June 2026, the Group had no foreign exchange contracts (30 June 2025: AUD 1.8 million and NZD 1.0 million). Exposure to foreign exchange risk The Group’s exposure to foreign exchange risk at the end of each reporting period was as follows: GROUP 30 JUNE 2026 30 JUNE 2025 AUD US$’000 NZD US$’000 RMB US$’000 IDR US’000 AUD US$’000 NZD US$’000 RMB US$’000 Cash and cash equivalents 15,165 1,381 - 28 13,074 1,086 - Receivables 3,826 135 - 3 2,108 179 - Current tax payable 15 1,484 1,374 - - 3,771 736 Current payables 6,553 937 2,827 1 1,887 - 57 Non-current payables 2,629 - - - 2,459 - - F o r t h e f i n a n c i a l y e a r e n d e d a n d a s a t 3 0 J u n e 2 026, if the currencies set out in the table below had strengthened or weakened against the US dollar by the percentage shown, with all other variables held constant, the net result for the financial year would increase / (decrease) and net assets would increase / (decrease) by: GROUP NET RESULT NET ASSETS NET RESULT NET ASSETS 2026 US$’000 2025 US$’000 2026 US$’000 2025 US$’000 2026 US$’000 2025 US$’000 2026 US$’000 2025 US$’000 Change in currency1 +10% +10% +10% +10% -10% -10% -10% -10% Australian dollar impact 383 482 686 759 (383) (482) (686) (759) New Zealand dollar impact 609 596 (65) (180) (609) (596) 65 180 Chinese Renminbi impact - - (315 (59) - - 315 59 Indonesian Rupiah impact - - (22) - - - 22 - 1 T h i s h a s b e e n b a s e d o n t h e c h a n g e i n t h e e x c h a n g e r a t e a g a i n s t t h e U S d o l l a r i n t h e f i n a n c i a l y e a r s e n d e d 3 0 J u n e 2 026 and 30 June 20 25. T h e s e n s i t i v i t y a n a l y s i s h a s b e e n b a s e d o n t h e s e n s i t i v i t y r a t e s w h e n r e p o r t i n g f o r e i g n e x c h a n g e r i s k i n t e r n a l l y t o k e y m a n a g e m e nt personnel and represents management’s assessment of the possible change in foreign exchange rates based on historic volatility. In management’s opinion, the sensitivity analysis is not fully representative of the inherent foreign exchange risk as the end of the reporting period exposure does not necessarily reflect the exposure during the course of the financial year. [ii] Commodity price risk Commodity price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of change in market commodity prices for crude oil and natural gas. The objective of the Group’s commodity price risk management policy is to ensure its financial viability despite potential periods of unfavourable prices. Regular sensitivity analysis is conducted to evaluate the potential impact of unfavourable prices on the Group’s future financial position. The results of this evaluation are used to determine the most appropriate risk acquisition-date fair value . Consistent with the Group’s FVOCI election, the resultant fair value gain of US$1.2 million was recognised in other comprehensive income. Equity settled consideration reserve: The equity settled consideration reserve holds the Group’s shares not yet issued under the off -market takeover offer for the shareholders of Cue Energy Resources Limited. Under the offer terms, Cue shareholders were entitled to receive 0.5625 Horizon shares for each Cue share held. Subsequent to the year end, these shares were issued and the balance transferred to contributed equity. Note 20 Financial risk management T h e G r o u p ' s a c t i v i t i e s e x p o s e i t t o a v a r i e t y o f f i n a n c i a l r i s k s : m a r k e t r i s k ( i n c l u d i n g c u r r e n c y r i s k , i n t e r e s t r a t e r i s k a nd commodity price risk); credit risk; liquidity risk; capital risk; and climate related and other emerging risks. The Group's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group. The Group uses derivative financial instruments such as oil price swaps, interest rate swaps and foreign exchange forward contracts, to hedge certain risk exposures. Derivatives are exclusively u s e d f o r h e d g i n g p u r p o s e s , i . e . n o t a s t r a d i n g o r o t h e r s p e c u l a t i v e i n s t r u m e n t s . T h e G r o u p u s e s d i f f e r e n t m e t h o d s t o measure the different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and commodity price risks, and aging analysis for credit risk. R i s k m an a g em en t i s c a r r ie d o u t b y th e f in a n ce f un c t i o n u n d e r p o l i c i es a p p r o v e d b y t h e B o a r d o f D i re c t o rs . T he f i n an c e function identifies, evaluates and if necessary hedges financial risks in close co -operation with Group management. The board provides w ritten principles for overall risk management, as well as written policies covering specific areas, such as mitigating foreign exchange, interest rate and credit risks and the use of derivative financial instruments. The Group has no off-balance sheet financial assets or liabilities as at the end of the reporting period. The Group held the following financial instruments at 30 June 2026 and 30 June 2025. CONSOLIDATED 2026 US$’000 2025 US$’000 FINANCIAL ASSETS Cash and cash equivalents 37,400 39,782 Receivables 14,731 14,507 Loan advanced to associate 3,328 - Derivative financial instruments 713 406 Total financial assets 56,172 54,695 FINANCIAL LIABILITIES Payables (current) 22,351 14,483 Current tax payable 5,548 3,920 Derivative financial instruments - 2 Payables (non-current) 3,068 2,894 Borrowings (net of borrowing costs capitalised) 47,491 25,655 Total financial liabilities 78,458 46,954 A. Market risk [i] Foreign exchange risk Foreign exchange risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because o f changes in foreign exchange rates.
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Horizon Oil Annual Report 2026 90 The Group’s exposure to interest rate risk for financial instruments is set out below: AS AT 30 JUNE 2026 FLOATING INTEREST RATE FIXED INTEREST RATE MATURING IN: NON-INTEREST BEARING CARRYING AMOUNT US$’000 1 YEAR OR LESS US$’000 OVER 1 TO 2 YEARS US$’000 OVER 2 TO 5 YEARS US$’000 US$’000 US$’000 FINANCIAL ASSETS Cash and cash equivalents 36,172 124 - - 1,104 37,400 Receivables - - - - 14,731 14,731 Loan advanced to associate 3,328 - - - - 3,328 Derivative financial instruments - - - - 713 713 Total 39,500 124 - - 16,548 56,172 Weighted average interest rate p.a. 4.32% FINANCIAL LIABILITIES Trade and other payables - - - - 22,351 22,351 Current tax payable - - - - 5,548 5,548 Non-current payables - - - - 3,068 3,068 Borrowings (nominal) 48,684 - - - - 48,684 Total 48,684 - - - 30,967 79,651 Weighted average interest rate p.a. 11.35% Net financial liabilities (9,184) 124 - - (14,419) (23,479) AS AT 30 JUNE 2025 FLOATING INTEREST RATE FIXED INTEREST RATE MATURING IN: NON-INTEREST BEARING CARRYING AMOUNT US$’000 1 YEAR OR LESS US$’000 OVER 1 TO 2 YEARS US$’000 OVER 2 TO 5 YEARS US$’000 US$’000 US$’000 FINANCIAL ASSETS Cash and cash equivalents 20,838 17,656 - - 1,288 39,782 Receivables - - - - 14,507 14,507 Derivative financial instruments - - - - 406 406 Total 20,838 17,656 - - 16,201 54,695 Weighted average interest rate p.a. 3.94% FINANCIAL LIABILITIES Trade and other payables - - - - 14,483 14,483 Current tax payable - - - - 3,920 3,920 Non-current payables - - - - 2,576 2,576 Derivative financial instruments - - - - 2 2 Borrowings (nominal) 26,109 - - - - 26,109 Total 26,109 - - - 20,981 47,090 Weighted average interest rate p.a. 9.46% Net financial assets/(liabilities) (5,271) 17,656 - - (4,780) 7,605 mitigation tool to be used. The Group will hedge when it is deemed the most appropriate risk mitigation tool to be used or where required by its financing arrangements. During the current financial year, oil price hedging was undertaken as a risk mitigation measure to ensure the Group’s financial position remains sound and that the Group is able to meet its financial obligations in the event of low oil prices. In relation to the Group’s exposure to the natural gas prices, majority of the gas are sold under fixed price contracts, providing a natural hedge against the commodity market volatility. At 30 June 2026, the Group had 180,000 bbls of crude oil hedged through Brent oil price swaps at a weighted average price of US$77.48/bbl. Effects of crude oil hedging The effects of the oil price swaps on the group’s financial position and performance are as follows: CONSOLIDATED 30 JUNE 2026 US$’000 30 JUNE 2025 US$’000 OIL PRICE SWAPS Carrying amount – asset 713 390 Notional amount 13,876 12,314 Maturity date 31 July 2026 – 31 December 2026 31 July 2025 – 31 December 2025 Hedge ratio1 1:1 1:1 Change in fair value of outstanding hedging instruments 323 495 Weighted average hedged rate for the year US$77.09/bbl US$68.41/bbl 1 The oil price swaps were executed in the same oil price benchmark as the highly probable future oil sales, therefore the hedge ratio is 1:1. For the financial year ended and as at 30 June 2026, if the crude oil price rose or fell by the percentage shown, with all other variables held constant, the result for the financial year would increase / (decrease) and net assets would increase / (decrease) by: GROUP NET RESULT NET ASSETS NET RESULT NET ASSETS 2026 US$’000 2025 US$’000 2026 US$’000 2025 US$’000 2026 US$’000 2025 US$’000 2026 US$’000 2025 US$’000 Change in crude oil price +10% +10% +10% +10% -10% -10% -10% -10% Impact 3,582 4,467 3,582 4,467 (3,973) (4,957) (3,973) (4,957) [iii] Interest rate risk Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group has no interest-bearing assets considered to materially expose the Group’s core income and/or operating cash flows to changes in market interest rates. As at 30 June 2026 and 30 June 2025, the Group’s interest rate risk arises from borrowings, issued at variable rates, exposing t h e Gr o u p t o c a s h f l o w i n te re s t r at e r i s k . G r o u p p o l i c y i s t o m a n a g e m a te r i a l i n te r es t r a te e x p o s ur e . Re g u l a r se n s i t i v i ty analysis is conducted to evaluate the po t e n t i a l i m p a c t o f u n f a v o u r a b l e i n t e r e s t r a t e m o v e m e n t s o n t h e G r o u p ’ s f u t u r e financial position. The results of this evaluation are used to determine the most appropriate risk mitigation tool to be use d. During the current and prior financial year, the Group did not enter into any interest rate swap contracts.
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Horizon Oil Annual Report 2026 91 The Group’s exposure to interest rate risk for financial instruments is set out below: AS AT 30 JUNE 2026 FLOATING INTEREST RATE FIXED INTEREST RATE MATURING IN: NON-INTEREST BEARING CARRYING AMOUNT US$’000 1 YEAR OR LESS US$’000 OVER 1 TO 2 YEARS US$’000 OVER 2 TO 5 YEARS US$’000 US$’000 US$’000 FINANCIAL ASSETS Cash and cash equivalents 36,172 124 - - 1,104 37,400 Receivables - - - - 14,731 14,731 Loan advanced to associate 3,328 - - - - 3,328 Derivative financial instruments - - - - 713 713 Total 39,500 124 - - 16,548 56,172 Weighted average interest rate p.a. 4.32% FINANCIAL LIABILITIES Trade and other payables - - - - 22,351 22,351 Current tax payable - - - - 5,548 5,548 Non-current payables - - - - 3,068 3,068 Borrowings (nominal) 48,684 - - - - 48,684 Total 48,684 - - - 30,967 79,651 Weighted average interest rate p.a. 11.35% Net financial liabilities (9,184) 124 - - (14,419) (23,479) AS AT 30 JUNE 2025 FLOATING INTEREST RATE FIXED INTEREST RATE MATURING IN: NON-INTEREST BEARING CARRYING AMOUNT US$’000 1 YEAR OR LESS US$’000 OVER 1 TO 2 YEARS US$’000 OVER 2 TO 5 YEARS US$’000 US$’000 US$’000 FINANCIAL ASSETS Cash and cash equivalents 20,838 17,656 - - 1,288 39,782 Receivables - - - - 14,507 14,507 Derivative financial instruments - - - - 406 406 Total 20,838 17,656 - - 16,201 54,695 Weighted average interest rate p.a. 3.94% FINANCIAL LIABILITIES Trade and other payables - - - - 14,483 14,483 Current tax payable - - - - 3,920 3,920 Non-current payables - - - - 2,576 2,576 Derivative financial instruments - - - - 2 2 Borrowings (nominal) 26,109 - - - - 26,109 Total 26,109 - - - 20,981 47,090 Weighted average interest rate p.a. 9.46% Net financial assets/(liabilities) (5,271) 17,656 - - (4,780) 7,605 mitigation tool to be used. The Group will hedge when it is deemed the most appropriate risk mitigation tool to be used or where required by its financing arrangements. During the current financial year, oil price hedging was undertaken as a risk mitigation measure to ensure the Group’s financial position remains sound and that the Group is able to meet its financial obligations in the event of low oil prices. In relation to the Group’s exposure to the natural gas prices, majority of the gas are sold under fixed price contracts, providing a natural hedge against the commodity market volatility. At 30 June 2026, the Group had 180,000 bbls of crude oil hedged through Brent oil price swaps at a weighted average price of US$77.48/bbl. Effects of crude oil hedging The effects of the oil price swaps on the group’s financial position and performance are as follows: CONSOLIDATED 30 JUNE 2026 US$’000 30 JUNE 2025 US$’000 OIL PRICE SWAPS Carrying amount – asset 713 390 Notional amount 13,876 12,314 Maturity date 31 July 2026 – 31 December 2026 31 July 2025 – 31 December 2025 Hedge ratio1 1:1 1:1 Change in fair value of outstanding hedging instruments 323 495 Weighted average hedged rate for the year US$77.09/bbl US$68.41/bbl 1 The oil price swaps were executed in the same oil price benchmark as the highly probable future oil sales, therefore the hedge ratio is 1:1. For the financial year ended and as at 30 June 2026, if the crude oil price rose or fell by the percentage shown, with all other variables held constant, the result for the financial year would increase / (decrease) and net assets would increase / (decrease) by: GROUP NET RESULT NET ASSETS NET RESULT NET ASSETS 2026 US$’000 2025 US$’000 2026 US$’000 2025 US$’000 2026 US$’000 2025 US$’000 2026 US$’000 2025 US$’000 Change in crude oil price +10% +10% +10% +10% -10% -10% -10% -10% Impact 3,582 4,467 3,582 4,467 (3,973) (4,957) (3,973) (4,957) [iii] Interest rate risk Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group has no interest-bearing assets considered to materially expose the Group’s core income and/or operating cash flows to changes in market interest rates. As at 30 June 2026 and 30 June 2025, the Group’s interest rate risk arises from borrowings, issued at variable rates, exposing t h e Gr o u p t o c a s h f l o w i n te re s t r at e r i s k . G r o u p p o l i c y i s t o m a n a g e m a te r i a l i n te r es t r a te e x p o s ur e . Re g u l a r se n s i t i v i ty analysis is conducted to evaluate the po t e n t i a l i m p a c t o f u n f a v o u r a b l e i n t e r e s t r a t e m o v e m e n t s o n t h e G r o u p ’ s f u t u r e financial position. The results of this evaluation are used to determine the most appropriate risk mitigation tool to be use d. During the current and prior financial year, the Group did not enter into any interest rate swap contracts.
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Horizon Oil Annual Report 2026 92 As at 30 June 20 26, there were no financial assets that are past due (30 June 20 25: US$Nil). At the date of this report, the full balance of the receivables has been received in cash. C. Liquidity risk Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations associated with financial liabilit ies. The Group has policies in place to manage liquidity risk by maintaining adequate reserves and by continuously monitoring forecast and actual cash flows and matching profiles of financial assets and liabilities. Financing arrangements As at 30 June 2026 and 30 June 2025, the Group had no undrawn borrowing facilities. Maturities of financial liabilities An analysis of the Group’s financial liability maturities for the current and prior financial year is set out below: AS AT JUNE 2026 NON-INTEREST BEARING US$’000 VARIABLE RATE1 US$’000 FIXED RATE US$’000 Less than 6 months 27,898 240 - 6 – 12 months - 25,030 - Between 1 and 2 years 3,068 17,462 - Between 2 – 5 years - 12,269 - Total contractual cash flows 30,966 55,000 - 1 Includes principal repayments and future interest payments. AS AT JUNE 2025 NON-INTEREST BEARING US$’000 VARIABLE RATE1 US$’000 FIXED RATE US$’000 Less than 6 months 18,992 6,729 - 6 – 12 months - 3,572 - Between 1 and 2 years 2,777 13,052 - Between 2 – 5 years - 6,794 - Total contractual cash flows 21,769 30,147 - 1 Includes principal repayments and future interest payments. D. Fair value estimation The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. AASB 7 ‘Financial Instruments: Disclosures’ requires disclosure of fair value measurements by level of the following fair value measurement hierarchy: (a) quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1); (b) inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (level 2); and (c) inputs for the asset or liability that are not based on observable market data (unobservable inp uts) (level 3). As at 30 June 2026 and 30 June 2025, the Group had the following variable rate borrowings outstanding: 30 JUNE 2026 30 JUNE 2025 WEIGHTED AVERAGE INTEREST RATE % P.A. BALANCE US$’000 WEIGHTED AVERAGE INTEREST RATE % P.A. BALANCE US$’000 External loans 11.35% 48,684 9.46% 26,109 Net exposure to cashflow interest rate risk 48,684 26,109 At 3 0 J u n e 2 026 a n d 3 0 J u n e 2 0 25, i f t h e i n t e r e s t r a t e s h a d b e e n 1 . 0 % p . a . h i g h e r o r l o w e r a n d a l l o t h e r v a r i a b l e s h e l d constant, the net result for the financial year would increase/(decrease) and net assets as at 30 June 2026 and 30 June 2025 would increase/(decrease) by: GROUP NET RESULT NET ASSETS NET RESULT NET ASSETS 2026 US$’000 2025 US$’000 2026 US$’000 2025 US$’000 2026 US$’000 2025 US$’000 2026 US$’000 2025 US$’000 CHANGE IN INTEREST RATE P.A. +1% +1% +1% +1% -1% -1% -1% -1% Impact of assets 92 135 92 135 (399) (531) (399) (531) Impact of liabilities 338 183 338 183 (3,835) (1,729) (3,835) (1,729) Impact of net assets (245) (48) (245) (48) 3,436 1,198 3,436 1,198 B. Credit risk C r e d i t r i s k i s m a n a g e d o n a G r o u p b a s i s . C r e d i t r i s k r e f e r s t o t h e r i s k t h a t a c o u n t e r p a r t y w i l l d e f a u l t o n i t s c o n t r a c t u a l obligations resulting in financial loss to the Group. Credit risk arises from cash and cash equivalents, derivative financia l instruments, as well as credit exposures to customers, including outstanding receivables. It is acknowledged that the Group’s sales of crude oil are concentrated with three counterparties, and sales of natural gas are predominantly to the domestic gas market (often government counterparties) with fixed contracts of up to 12 months in advance. However, the Group has policies in place to ensure that sales of products and services are made to customers with an appropriate credit history, and that the Group has the ability to sell crude to other parties if desired. Derivative counterparties and cash transactions are limited to high credit quality financial institutions. Where commercially practical the Group seeks to limit the amount of credit exposure to any one financial institution. The maximum exposure to credit risk at the end of each reporting period is the carrying amount of the financial assets as summarised in this note. The c r e d i t q u a l i t y o f f i n a n c i a l a s s e t s t h a t a r e n e i t h e r p a s t d u e n o r i m p a i r e d c a n b e a s s e s s e d b y r e f e r e n c e t o e x t e r n a l c r e d i t ratings (if available) or to historical information about counterparty default rates. Management continues to assess any changes to credit ratings of various counterparties as well and default rates ($nil as at the date of this report). The Group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. The expected loss rates are based on the payment profiles of sales over a period of 36 months before 30 June 2026 and the corresponding historical credit losses experienced within this period. The historical rates are adjusted to reflect current and forward-looking information on key factors affecting the ability of the customers to settle the receivables. Management has assessed the collectability of these amounts based on the customer relationships and historical payment behaviour and believe that the amounts are still collectable in full. On that basis, the loss allowance as at 30 June 2026 was determined as follows for trade receivables: AS AT 30 JUNE 2026 CURRENT MORE THAN 30 DAYS DUE PAST MORE THAN 60 DAYS DUE PAST TOTAL Expected loss rate 0% 0% 0% Gross carrying amount 14,731 - - 14,731 Loss allowance - - - -
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Horizon Oil Annual Report 2026 93 As at 30 June 20 26, there were no financial assets that are past due (30 June 20 25: US$Nil). At the date of this report, the full balance of the receivables has been received in cash. C. Liquidity risk Liquidity risk is the risk that the Group will encounter difficulty in meeting obligations associated with financial liabilit ies. The Group has policies in place to manage liquidity risk by maintaining adequate reserves and by continuously monitoring forecast and actual cash flows and matching profiles of financial assets and liabilities. Financing arrangements As at 30 June 2026 and 30 June 2025, the Group had no undrawn borrowing facilities. Maturities of financial liabilities An analysis of the Group’s financial liability maturities for the current and prior financial year is set out below: AS AT JUNE 2026 NON-INTEREST BEARING US$’000 VARIABLE RATE1 US$’000 FIXED RATE US$’000 Less than 6 months 27,898 240 - 6 – 12 months - 25,030 - Between 1 and 2 years 3,068 17,462 - Between 2 – 5 years - 12,269 - Total contractual cash flows 30,966 55,000 - 1 Includes principal repayments and future interest payments. AS AT JUNE 2025 NON-INTEREST BEARING US$’000 VARIABLE RATE1 US$’000 FIXED RATE US$’000 Less than 6 months 18,992 6,729 - 6 – 12 months - 3,572 - Between 1 and 2 years 2,777 13,052 - Between 2 – 5 years - 6,794 - Total contractual cash flows 21,769 30,147 - 1 Includes principal repayments and future interest payments. D. Fair value estimation The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. AASB 7 ‘Financial Instruments: Disclosures’ requires disclosure of fair value measurements by level of the following fair value measurement hierarchy: (a) quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1); (b) inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (level 2); and (c) inputs for the asset or liability that are not based on observable market data (unobservable inp uts) (level 3).
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Horizon Oil Annual Report 2026 94 All resulting fair value estimates for unlisted equities are included in level 3. The fair value of the Mereenie contingent payment reflect the Group’s expectation of the outcome of the specific events and the timing of the potential payment and is included in level 3. [[iiiiii]] Other fair value measurements The carrying value of receivables, current portion of loan advanced to associate, and payables are assumed to approximate their fair values due to their short-term nature. The fair value of other financial liabilities (being financial guarantees), after factoring in the likelihood that the parent entity would be required to perform under the guarantees, was not considered material. The fair value of borrowings for disclosure purposes is not materially different to their carrying value given the likely anticipated repayment profile. Refer to Note 16 for further details. The fair value of other classes of financial instruments not yet covered above was determined to approximate their carrying value. E. Capital risk The consolidated entity manages its capital to ensure that entities in the consolidated group will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balances. F. Climate-related and other emerging risks Climate-related and other emerging risks encompass the impact of climate change, any associated climate change regulations, funding restrictions and any other emerging factors (e.g. technological disruption to the oil and gas industry) that could have a material impact on the Group. The Group will continue to monitor the impact of these risks. At the date of this report, the Group is impacted by emissions trading regulations in New Zealand. Currently there are no equivalent emissions trading regulations in the other jurisdictions in which the Group operates. The Group manages the impact of the emissions trading regulations in New Zealand by acquiring New Zealand carbon credits (NZUs) throughout the financial period to offset its annual obligation, such that it is not wholly exposed to the NZU price at the date of settlement. A t 3 0 J u n e 2 026, i f t h e N e w Z e a l a n d c a r b o n c r e d i t p r i c e h a d b e e n 1 0 % p . a . h i g h e r o r l o w e r a n d a l l o t h e r v a r i a b l e s h e l d constant, the net result for the financial year would increase/(decrease) and net assets as at 30 June 20 26 would increase/(decrease) by: GROUP NET RESULT NET ASSETS NET RESULT NET ASSETS 2026 US$’000 2025 US$’000 2026 US$’000 2025 US$’000 2026 US$’000 2025 US$’000 2026 US$’000 2025 US$’000 Change in NZU price +10% +10% +10% +10% -10% -10% -10% -10% Impact 28 43 (14) 24 (28) (43) 14 (24) Note 21 New Zealand Imputation Credits CONSOLIDATED 30 JUNE 2026 US$’000 30 JUNE 2025 US$’000 Imputation credits available for subsequent financial years 1 2,720 2,923 1 The franking credits available for subsequent financial years are only available to New Zealand resident shareholders under the Trans-Tasman imputation legislation. [[ii]] Fair value measurements The following table presents the Group’s assets and liabilities measured and recognised at fair value as at 30 June 2026 and 30 June 2025: AS AT 30 JUNE 2026 LEVEL 1 US$’000 LEVEL 2 US$’000 LEVEL 3 US$’000 TOTAL US$’000 ASSETS Derivatives used for hedging - 713 - 713 Financial assets at fair value through OCI: Equity investment in unlisted shares - - - - Total assets - 713 - 713 LIABILITIES Mereenie acquisition – contingent payment - - 2,629 2,629 Total liabilities - - 2,629 2,629 AS AT 30 JUNE 2025 LEVEL 1 US$’000 LEVEL 2 US$’000 LEVEL 3 US$’000 TOTAL US$’000 ASSETS Derivatives used for hedging - 406 - 406 Financial assets at fair value through OCI: Equity investment in unlisted shares - 947 - 947 Total assets - 1,353 - 1,353 LIABILITIES Derivatives used for hedging - 2 - 2 Mereenie acquisition – contingent payment - - 2,460 2,460 Total liabilities - 2 2,460 2,462 There were no transfers between levels 1, 2 or 3 for recurring fair value measurements during the year. The Group’s policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the repor ting period. T h e G r o u p d i d n o t m e a s u r e a n y f i n a n c i a l a s s e t s o r f i n a n c i a l l i a b i l i t i e s a t f a i r v a l u e o n a n o n-recurring basis as at 30 June 2026. [[iiii]] Valuation techniques used to derive fair values The fair value of financial instruments traded in active markets (such as publicly traded derivatives) was based on quoted market prices at the end of each reporting period. The quoted market price used for hedging derivatives held by the Group was the current bid price. These instruments are included in level 1. The fair value of financial instruments that are not traded in an active market (for example, over -the-counter derivatives) is determined using valuation techniques. These valuation techniques maximise the use of observable market data where it is availab l e a n d r e l y a s l i t t l e a s p o s s i b l e o n e n t i t y s p e c i f i c e s t i m a t e . I f a l l s i g n i f i c a n t i n p u t s r e q u i r e d t o f a i r v a l u e a n instrument are observable, the instrument is included in level 2. Specific valuation techniques used to value financial instruments include: – Discounted cash flow projections based on reliable estimates of future cash flows.
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Horizon Oil Annual Report 2026 95 All resulting fair value estimates for unlisted equities are included in level 3. The fair value of the Mereenie contingent payment reflect the Group’s expectation of the outcome of the specific events and the timing of the potential payment and is included in level 3. [[iiiiii]] Other fair value measurements The carrying value of receivables, current portion of loan advanced to associate, and payables are assumed to approximate their fair values due to their short-term nature. The fair value of other financial liabilities (being financial guarantees), after factoring in the likelihood that the parent entity would be required to perform under the guarantees, was not considered material. The fair value of borrowings for disclosure purposes is not materially different to their carrying value given the likely anticipated repayment profile. Refer to Note 16 for further details. The fair value of other classes of financial instruments not yet covered above was determined to approximate their carrying value. E. Capital risk The consolidated entity manages its capital to ensure that entities in the consolidated group will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balances. F. Climate-related and other emerging risks Climate-related and other emerging risks encompass the impact of climate change, any associated climate change regulations, funding restrictions and any other emerging factors (e.g. technological disruption to the oil and gas industry) that could have a material impact on the Group. The Group will continue to monitor the impact of these risks. At the date of this report, the Group is impacted by emissions trading regulations in New Zealand. Currently there are no equivalent emissions trading regulations in the other jurisdictions in which the Group operates. The Group manages the impact of the emissions trading regulations in New Zealand by acquiring New Zealand carbon credits (NZUs) throughout the financial period to offset its annual obligation, such that it is not wholly exposed to the NZU price at the date of settlement. A t 3 0 J u n e 2 026, i f t h e N e w Z e a l a n d c a r b o n c r e d i t p r i c e h a d b e e n 1 0 % p . a . h i g h e r o r l o w e r a n d a l l o t h e r v a r i a b l e s h e l d constant, the net result for the financial year would increase/(decrease) and net assets as at 30 June 20 26 would increase/(decrease) by: GROUP NET RESULT NET ASSETS NET RESULT NET ASSETS 2026 US$’000 2025 US$’000 2026 US$’000 2025 US$’000 2026 US$’000 2025 US$’000 2026 US$’000 2025 US$’000 Change in NZU price +10% +10% +10% +10% -10% -10% -10% -10% Impact 28 43 (14) 24 (28) (43) 14 (24) Note 21 New Zealand Imputation Credits CONSOLIDATED 30 JUNE 2026 US$’000 30 JUNE 2025 US$’000 Imputation credits available for subsequent financial years 1 2,720 2,923 1 The franking credits available for subsequent financial years are only available to New Zealand resident shareholders under the Trans-Tasman imputation legislation. [[ii]] Fair value measurements The following table presents the Group’s assets and liabilities measured and recognised at fair value as at 30 June 2026 and 30 June 2025: AS AT 30 JUNE 2026 LEVEL 1 US$’000 LEVEL 2 US$’000 LEVEL 3 US$’000 TOTAL US$’000 ASSETS Derivatives used for hedging - 713 - 713 Financial assets at fair value through OCI: Equity investment in unlisted shares - - - - Total assets - 713 - 713 LIABILITIES Mereenie acquisition – contingent payment - - 2,629 2,629 Total liabilities - - 2,629 2,629 AS AT 30 JUNE 2025 LEVEL 1 US$’000 LEVEL 2 US$’000 LEVEL 3 US$’000 TOTAL US$’000 ASSETS Derivatives used for hedging - 406 - 406 Financial assets at fair value through OCI: Equity investment in unlisted shares - 947 - 947 Total assets - 1,353 - 1,353 LIABILITIES Derivatives used for hedging - 2 - 2 Mereenie acquisition – contingent payment - - 2,460 2,460 Total liabilities - 2 2,460 2,462 There were no transfers between levels 1, 2 or 3 for recurring fair value measurements during the year. The Group’s policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the repor ting period. T h e G r o u p d i d n o t m e a s u r e a n y f i n a n c i a l a s s e t s o r f i n a n c i a l l i a b i l i t i e s a t f a i r v a l u e o n a n o n-recurring basis as at 30 June 2026. [[iiii]] Valuation techniques used to derive fair values The fair value of financial instruments traded in active markets (such as publicly traded derivatives) was based on quoted market prices at the end of each reporting period. The quoted market price used for hedging derivatives held by the Group was the current bid price. These instruments are included in level 1. The fair value of financial instruments that are not traded in an active market (for example, over -the-counter derivatives) is determined using valuation techniques. These valuation techniques maximise the use of observable market data where it is availab l e a n d r e l y a s l i t t l e a s p o s s i b l e o n e n t i t y s p e c i f i c e s t i m a t e . I f a l l s i g n i f i c a n t i n p u t s r e q u i r e d t o f a i r v a l u e a n instrument are observable, the instrument is included in level 2. Specific valuation techniques used to value financial instruments include: – Discounted cash flow projections based on reliable estimates of future cash flows.
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Horizon Oil Annual Report 2026 96 Fair value of identifiable assets acquired, and liabilities assumed at acquisition date (provisional): The provisional acquisition-date fair values assets and liabilities recognised as a result of the acquisition at the completion date are as follows: FAIR VALUE US$’000 Cash and cash equivalents 10,564 Receivable 6,134 Inventories 1,728 Plant & equipment and other assets 595 Oil and gas assets 80,172 Deferred tax assets 5,441 Advances paid for restoration works 4,377 Total assets acquired 109,011 Payables 3,914 Current tax payable 2,158 Deferred tax liabilities 16,824 Provisions 23,819 Total liabilities acquired 46,715 Net identifiable assets acquired1 62,296 Less: Non-controlling interest (44.82% at date of control) (27,921) Net identifiable assets acquired by Group 34,375 1In addition to the aforementioned identifiable assets and liabilities, the Group assumed oil and gas expenditure commitments associated with the acquired license. Refer to Note 32 for further detail in relation to the Group’s capital commitments. Acquisition costs Acquisition-related costs of US$0.9 million were incurred in relation to the transaction. These costs principally comprise legal and other professional fees and have been recognised within administrative expenses in the statement of profit or loss during the period classified as one off. Costs directly attributable to the issue of Horizon shares have been recognised as a deduction from equity. Revenue and profit Contribution From the acquisition date of 17 June 2026 to 30 June 2026, Cue contributed revenue of US$2.5 million and profit after tax of US$1.1 million to the Group. PRO-FORMA INFORMATION1 US$’000 Pro forma revenue had the acquisition occurred on 1 July 2025 34,092 Pro forma profit after tax had the acquisition occurred on 1 July 2025 2,863 1The pro forma information has been prepared for illustrative purposes only and does not necessarily reflect the results that would have occurred had the acquisition taken place on 1 July 2025, nor is it indicative of future operating results. Measurement Period At 30 June 2026, the accounting for the acquisition remains provisional due to the proximity of the acquisition date to the reporting date. In particular, the valuation of oil and gas assets, exploration and evaluation assets, restoration obligation s, deferred tax balances and resulting goodwill remain subject to finalisation. The Group will finalise the purchase price allocation during the measurement period, which extends for up to twelve months from the acquisition date. Note 22 Acquisition of a 57.03% interest in Cue Energy Resources Limited Summary of acquisition O n 2 M a r c h 2 0 2 6 , t h e G r o u p e n t e r e d i n t o a p r e-bid agreement with Echelon Offshore Limited (“Echelon”) in respect of Echelon’s 139,885,879 fully paid ordinary shares in Cue Energy Resources Limited (“Cue”, ASX: CUE) and launched an off - market takeover offer for Cue pursuant to the replacement bidder’s statement dated 19 March 2026. The offer was declared unconditional on 17 June 2026, with the company acquiring a 57.03% controlling interest in Cue. Management has completed its assessment of the accounting treatment and disclosure requirements arising from the acquisition the controlling interest in Cue. The transaction has been accounted for in accordance with AASB 3 Business Combinations, AASB 9 Financial Instruments and AASB 10 Consolidated Financial Statements . This assessment concluded that the acquisition represents a business combination achieved in stages, with Horizon initially acquiring a 19.99% equity interest on 2 March 2026 before obtaining control on 17 June 2026, when the takeover offer became unconditional. Provisional Purchase Price Allocation T h e a c c o u n t i n g f o r t h e a c q u i s i t i o n h a s b e e n d e t e r m i n e d p r o v i s i o n a l l y a s a t 3 0 J u n e 2 0 2 6 . D u e t o t h e p r o x i m i t y o f t h e acquisition date to the reporting date, the Group has not yet completed a detailed assessment of the fair values of all identifiable assets and liabilities acquired. Management has completed a preliminary assessment of the fair value of acquired assets and liabilities. The provisional fair values assigned to Cue's identifiable net assets have been determined such that the residual difference between the purchase consideration and the fair value of identifiable net assets (excluding oil and gas assets) has been allocated to the acquired oil and gas assets. Accordingly, no goodwill or gain on bargain purchase has been recognised at 30 June 2026. The Group expects to finalise the purchase price allocation during the measurement period permitted under AASB 3. Any amendments identified within the measurement period will be recognised retrospectively as if the acquisition accounting had been completed at the acquisition date. Management will continue to review and refine the provisional fair value assessments during the measurement period, with any adjustments recognised in accordance with the requirements of AASB 3. Consideration transferred: The consideration transferred for the acquisition comprised cash consideration and Horizon shares issued under the takeover offer. Under the offer terms, Cue shareholders were entitled to receive A$0.008 cash and 0.5625 Horizon shares for each Cue share he ld. Horizon also acquired a 19.99% interest in Cue pursuant to a pre -bid agreement entered into with Echelon Offshore Limited. 2026 US$’000 Purchase consideration Cash consideration 1,397 Fair value of Horizon shares issued1 20,635 Fair value of previously held 19.99% interest 12,343 Total consideration transferred 34,375 1 The fair value of Horizon shares issued as consideration was determined using Horizon’s quoted share price on 17 June 2026, being the acquisition date.
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Horizon Oil Annual Report 2026 97 Fair value of identifiable assets acquired, and liabilities assumed at acquisition date (provisional): The provisional acquisition-date fair values assets and liabilities recognised as a result of the acquisition at the completion date are as follows: FAIR VALUE US$’000 Cash and cash equivalents 10,564 Receivable 6,134 Inventories 1,728 Plant & equipment and other assets 595 Oil and gas assets 80,172 Deferred tax assets 5,441 Advances paid for restoration works 4,377 Total assets acquired 109,011 Payables 3,914 Current tax payable 2,158 Deferred tax liabilities 16,824 Provisions 23,819 Total liabilities acquired 46,715 Net identifiable assets acquired1 62,296 Less: Non-controlling interest (44.82% at date of control) (27,921) Net identifiable assets acquired by Group 34,375 1In addition to the aforementioned identifiable assets and liabilities, the Group assumed oil and gas expenditure commitments associated with the acquired license. Refer to Note 32 for further detail in relation to the Group’s capital commitments. Acquisition costs Acquisition-related costs of US$0.9 million were incurred in relation to the transaction. These costs principally comprise legal and other professional fees and have been recognised within administrative expenses in the statement of profit or loss during the period classified as one off. Costs directly attributable to the issue of Horizon shares have been recognised as a deduction from equity. Revenue and profit Contribution From the acquisition date of 17 June 2026 to 30 June 2026, Cue contributed revenue of US$2.5 million and profit after tax of US$1.1 million to the Group. PRO-FORMA INFORMATION1 US$’000 Pro forma revenue had the acquisition occurred on 1 July 2025 34,092 Pro forma profit after tax had the acquisition occurred on 1 July 2025 2,863 1The pro forma information has been prepared for illustrative purposes only and does not necessarily reflect the results that would have occurred had the acquisition taken place on 1 July 2025, nor is it indicative of future operating results. Measurement Period At 30 June 2026, the accounting for the acquisition remains provisional due to the proximity of the acquisition date to the reporting date. In particular, the valuation of oil and gas assets, exploration and evaluation assets, restoration obligation s, deferred tax balances and resulting goodwill remain subject to finalisation. The Group will finalise the purchase price allocation during the measurement period, which extends for up to twelve months from the acquisition date. Note 22 Acquisition of a 57.03% interest in Cue Energy Resources Limited Summary of acquisition O n 2 M a r c h 2 0 2 6 , t h e G r o u p e n t e r e d i n t o a p r e-bid agreement with Echelon Offshore Limited (“Echelon”) in respect of Echelon’s 139,885,879 fully paid ordinary shares in Cue Energy Resources Limited (“Cue”, ASX: CUE) and launched an off - market takeover offer for Cue pursuant to the replacement bidder’s statement dated 19 March 2026. The offer was declared unconditional on 17 June 2026, with the company acquiring a 57.03% controlling interest in Cue. Management has completed its assessment of the accounting treatment and disclosure requirements arising from the acquisition the controlling interest in Cue. The transaction has been accounted for in accordance with AASB 3 Business Combinations, AASB 9 Financial Instruments and AASB 10 Consolidated Financial Statements . This assessment concluded that the acquisition represents a business combination achieved in stages, with Horizon initially acquiring a 19.99% equity interest on 2 March 2026 before obtaining control on 17 June 2026, when the takeover offer became unconditional. Provisional Purchase Price Allocation T h e a c c o u n t i n g f o r t h e a c q u i s i t i o n h a s b e e n d e t e r m i n e d p r o v i s i o n a l l y a s a t 3 0 J u n e 2 0 2 6 . D u e t o t h e p r o x i m i t y o f t h e acquisition date to the reporting date, the Group has not yet completed a detailed assessment of the fair values of all identifiable assets and liabilities acquired. Management has completed a preliminary assessment of the fair value of acquired assets and liabilities. The provisional fair values assigned to Cue's identifiable net assets have been determined such that the residual difference between the purchase consideration and the fair value of identifiable net assets (excluding oil and gas assets) has been allocated to the acquired oil and gas assets. Accordingly, no goodwill or gain on bargain purchase has been recognised at 30 June 2026. The Group expects to finalise the purchase price allocation during the measurement period permitted under AASB 3. Any amendments identified within the measurement period will be recognised retrospectively as if the acquisition accounting had been completed at the acquisition date. Management will continue to review and refine the provisional fair value assessments during the measurement period, with any adjustments recognised in accordance with the requirements of AASB 3. Consideration transferred: The consideration transferred for the acquisition comprised cash consideration and Horizon shares issued under the takeover offer. Under the offer terms, Cue shareholders were entitled to receive A$0.008 cash and 0.5625 Horizon shares for each Cue share he ld. Horizon also acquired a 19.99% interest in Cue pursuant to a pre -bid agreement entered into with Echelon Offshore Limited. 2026 US$’000 Purchase consideration Cash consideration 1,397 Fair value of Horizon shares issued1 20,635 Fair value of previously held 19.99% interest 12,343 Total consideration transferred 34,375 1 The fair value of Horizon shares issued as consideration was determined using Horizon’s quoted share price on 17 June 2026, being the acquisition date.
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Horizon Oil Annual Report 2026 98 Note 24 Interest in joint operations Companies in the Group were p a r t i c i p a n t s i n a n u m b e r o f j o i n t o p e r a t i o n s . T h e G r o u p h a s a n i n t e r e s t i n t h e a s s e t s a n d liabilities of these joint operations. The Group’s share of current assets and liabilities of the joint operations is included in the consolidated statement of fin ancial position in accordance with the accounting policy described in Note 1(C), and the carrying values of Group’s share of exploration, development and production phase expenditure is recorded in accordance with the accounting policies set out in Note 1(P) and (N), under the following classifications: CONSOLIDATED 30 JUNE 2026 US$’000 30 JUNE 2025 US$’000 CURRENT ASSETS Cash and cash equivalents 1,221 1,288 Receivables 179 142 Inventories 10,975 3,733 Prepaid expenses 111 22 Total current assets 12,486 5,185 NON-CURRENT ASSETS Oil and gas assets 151,695 97,869 Total non-current assets 151,695 97,869 Total assets 164,181 103,054 CURRENT LIABILITIES Payables 13,359 10,695 Total current liabilities 13,359 10,695 NON-CURRENT LIABILITIES Restoration provision 88,784 64,435 Total non-current liabilities 88,784 64,435 Total liabilities 102,143 75,130 Share of net assets employed in joint operations 62,038 27,924 Contingent liabilities in respect of joint operations are detailed in Note 31. Exploration and development expenditure commitments in respect of joint operations are detailed in Note 32. The Group had an interest in the following joint operations: PERMIT OR LICENCE PRINCIPAL ACTIVITIES INTEREST (%) 30 JUNE 2026 INTEREST (%) 30 JUNE 2025 Horizon Oil Limited NEW ZEALAND PMP 38160 (Maari / Manaia) Oil and gas production, exploration and development 26.00% 26.00% CHINA Block 22/12 Oil and gas production, exploration and development 26.95% 26.95% AUSTRALIA Mereenie OL4 & OL5 Oil and gas production, exploration and development 25.00% 25.00% Cue Energy Resources1 INDONESIA Mahato PSC Oil and gas production, exploration and development 11.25% - INDONESIA Sampang PSC Oil and gas production, exploration and development 15.00% - Note 23 Subsidiaries The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy set out in Note 1(C): NAME OF SUBSIDIARY COUNTRY OF INCORPORATION PERCENTAGE OF EQUITY HOLDING & VOTING INTEREST (ALL SHARES ISSUED ARE ORDINARY SHARES) BUSINESS ACTIVITIES CARRIED ON IN: 2026 % 2025 % Horizon Oil Limited: Horizon Oil International Limited New Zealand 100 100 New Zealand Horizon Oil International Holdings Limited BVI 100 100 BVI Horizon Oil (Beibu) Limited BVI 100 100 China Horizon Oil (China Holdings) Limited BVI 100 100 BVI Horizon Oil Employee Incentive Trust Australia 100 100 Australia Horizon Australia Investments Pty Limited Australia 100 100 Australia Horizon Australia Energy Pty Limited Australia 100 100 Australia Horizon Thailand Investments Pty Limited Australia 100 100 Australia Cue Energy Resources Limited1: Cue Energy Resources Limited Australia 57.03 - Australia Cue Mahakam Hilir Pty Ltd2 Australia 57.03 - Australia Cue (Ashmore Cartier) Pty Ltd Australia 57.03 - Australia Cue Sampang Pty Ltd Australia 57.03 - Australia Cue Taranaki Pty Ltd Australia 57.03 - Australia Cue Kalimantan Pte Ltd Singapore 57.03 - Singapore Cue Mahato Pty Ltd Australia 57.03 - Australia Cue Exploration Pty Ltd Australia 57.03 - Australia Cue Palm Valley Pty Ltd Australia 57.03 - Australia Cue Mereenie Pty Ltd Australia 57.03 - Australia Cue Dingo Pty Ltd Australia 57.03 - Australia 1 Represents the % interest held by Cue Energy Resources Limited. The Group interest is 57.03% of the Cue Energy Resources Limited interest. 2 Mahakam Hilir Profit Sharing Contract (PSC) exploration permit has expired and regulatory processes for surrender are ongoing as at 30 June 2026.
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Horizon Oil Annual Report 2026 99 Note 24 Interest in joint operations Companies in the Group were p a r t i c i p a n t s i n a n u m b e r o f j o i n t o p e r a t i o n s . T h e G r o u p h a s a n i n t e r e s t i n t h e a s s e t s a n d liabilities of these joint operations. The Group’s share of current assets and liabilities of the joint operations is included in the consolidated statement of fin ancial position in accordance with the accounting policy described in Note 1(C), and the carrying values of Group’s share of exploration, development and production phase expenditure is recorded in accordance with the accounting policies set out in Note 1(P) and (N), under the following classifications: CONSOLIDATED 30 JUNE 2026 US$’000 30 JUNE 2025 US$’000 CURRENT ASSETS Cash and cash equivalents 1,221 1,288 Receivables 179 142 Inventories 10,975 3,733 Prepaid expenses 111 22 Total current assets 12,486 5,185 NON-CURRENT ASSETS Oil and gas assets 151,695 97,869 Total non-current assets 151,695 97,869 Total assets 164,181 103,054 CURRENT LIABILITIES Payables 13,359 10,695 Total current liabilities 13,359 10,695 NON-CURRENT LIABILITIES Restoration provision 88,784 64,435 Total non-current liabilities 88,784 64,435 Total liabilities 102,143 75,130 Share of net assets employed in joint operations 62,038 27,924 Contingent liabilities in respect of joint operations are detailed in Note 31. Exploration and development expenditure commitments in respect of joint operations are detailed in Note 32. The Group had an interest in the following joint operations: PERMIT OR LICENCE PRINCIPAL ACTIVITIES INTEREST (%) 30 JUNE 2026 INTEREST (%) 30 JUNE 2025 Horizon Oil Limited NEW ZEALAND PMP 38160 (Maari / Manaia) Oil and gas production, exploration and development 26.00% 26.00% CHINA Block 22/12 Oil and gas production, exploration and development 26.95% 26.95% AUSTRALIA Mereenie OL4 & OL5 Oil and gas production, exploration and development 25.00% 25.00% Cue Energy Resources1 INDONESIA Mahato PSC Oil and gas production, exploration and development 11.25% - INDONESIA Sampang PSC Oil and gas production, exploration and development 15.00% -
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Horizon Oil Annual Report 2026 100 Note 26 Remuneration of key management personnel S e e t h e R e m u n e r a t i o n R e p o r t w i t h i n t h e D i r e c t o r s ’ R e p o r t f o r d e t a i l s o f d i r e c t o r s a n d o t h e r k e y m a n a g e m e n t a n d t h e i r detailed remuneration. KEY MANAGEMENT PERSONNEL COMPENSATION 2026 US$’000 2025 US$’000 Short-term employee benefits 1,322,721 1,299,275 Post-employment benefits 60,769 58,190 Long-term benefits (6,586) (9,598) Share-based payments (non-cash) 1,010,814 1,164,419 Total key management personnel remuneration 2,387,718 2,512,286 Detailed remuneration disclosures are provided in sections 1 - 6 of the audited Remuneration Report. Loans to key management personnel There were no loans to directors or other key management personnel during the current or prior financial year. Other transactions with key management personnel There were no other transactions with key management personnel during the current or prior financial year, other than as disclosed in sections 1 - 6 of the remuneration report. Note 27 Related parties Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties, unless otherwise stated. Directors and other key management personnel There were no related party transactions with directors and other key management personnel during the current or prior year other than as disclosed in sections 1 - 6 of the Remuneration report and Note 28. Subsidiaries Interests in subsidiaries are set out in Note 23. D e t a i l s i n r e s p e c t o f g u a r a n t e e s p r o v i d e d t o s u b s i d i a r i e s a r e s e t o u t i n Note 35([ii]). Associate – Matahio Energy Loan advanced to Matahio (25% equity holder in the MHET joint venture) is set out in Note 11. The loan is subject to interest and made on normal commercial terms and at a market rate of SOFR plus 6.0%. Transactions with related parties Transactions between Horizon Oil Limited and related parties in the wholly -owned Group during the financial years ended 30 June 2026 and 30 June 2025 consisted of: (a) Contributions to share capital by Horizon Oil Limited; (b) Loans advanced by Horizon Oil Limited; (c) Loans repaid to Horizon Oil Limited; (d) Payments to Horizon Oil Limited under financial guarantee contract arrangements; (e) Interest payments to Horizon Oil Limited on loans advanced to subsidiaries; (f) Dividends paid to Horizon Oil Limited; and (g) Reimbursement of expenses to Horizon Oil Limited. The reimbursement of expenses to Horizon Oil Limited by subsidiaries is based on costs recharged on a relevant time allocation of consultants and employees and associated office charges. Terms and conditions Transactions relating to dividends, calls on partly paid shares and subscriptions for new ordinary shares were on the same terms and conditions that applied to other shareholders. PERMIT OR LICENCE PRINCIPAL ACTIVITIES INTEREST (%) 30 JUNE 2026 INTEREST (%) 30 JUNE 2025 NEW ZEALAND PMP 38160 (Maari / Manaia) Oil and gas production, exploration and development 5.00% - AUSTRALIA Mereenie OL4 & OL5 Oil and gas production, exploration and development 7.50% - AUSTRALIA Palm Valley Oil and gas production, exploration and development 15.00% - AUSTRALIA Dingo Oil and gas production, exploration and development 15.00% - 1 Represents the % interest held by Cue Energy Resources Limited. The Horizon Group interest is 57.03% of the Cue Energy Resources Limited interest. Note 25 Remuneration of external auditors CONSOLIDATED 2026 US$ 2025 US$ During the financial year, the following fees were paid or payable for services provided by the external auditor of the parent entity and its related practices: PWC AUSTRALIA – HORIZON OIL LIMITED Audit and other assurance services Audit and review of financial reports 295,337 231,365 Other assurance services 15,988 13,788 TOTAL PWC AUSTRALIA 311,325 245,153 KPMG AUSTRALIA – CUE ENERGY RESOURCES LIMITED Audit and other assurance services Audit and review of financial reports 226,261 - Other assurance services 5,569 - Other services Advisory services 20,609 - Tax compliance 12,385 - TOTAL KPMG AUSTRALIA 264,824 - Total auditors’ remuneration 576,149 245,153 It is the Group’s policy to employ PricewaterhouseCoopers on assignments additional to its statutory external audit duties where PricewaterhouseCoopers’ expertise and experience with the Group are important. It is the Group’s policy to seek competitive tenders for all major consulting projects.
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Horizon Oil Annual Report 2026 101 Note 26 Remuneration of key management personnel S e e t h e R e m u n e r a t i o n R e p o r t w i t h i n t h e D i r e c t o r s ’ R e p o r t f o r d e t a i l s o f d i r e c t o r s a n d o t h e r k e y m a n a g e m e n t a n d t h e i r detailed remuneration. KEY MANAGEMENT PERSONNEL COMPENSATION 2026 US$’000 2025 US$’000 Short-term employee benefits 1,322,721 1,299,275 Post-employment benefits 60,769 58,190 Long-term benefits (6,586) (9,598) Share-based payments (non-cash) 1,010,814 1,164,419 Total key management personnel remuneration 2,387,718 2,512,286 Detailed remuneration disclosures are provided in sections 1 - 6 of the audited Remuneration Report. Loans to key management personnel There were no loans to directors or other key management personnel during the current or prior financial year. Other transactions with key management personnel There were no other transactions with key management personnel during the current or prior financial year, other than as disclosed in sections 1 - 6 of the remuneration report. Note 27 Related parties Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties, unless otherwise stated. Directors and other key management personnel There were no related party transactions with directors and other key management personnel during the current or prior year other than as disclosed in sections 1 - 6 of the Remuneration report and Note 28. Subsidiaries Interests in subsidiaries are set out in Note 23. D e t a i l s i n r e s p e c t o f g u a r a n t e e s p r o v i d e d t o s u b s i d i a r i e s a r e s e t o u t i n Note 35([ii]). Associate – Matahio Energy Loan advanced to Matahio (25% equity holder in the MHET joint venture) is set out in Note 11. The loan is subject to interest and made on normal commercial terms and at a market rate of SOFR plus 6.0%. Transactions with related parties Transactions between Horizon Oil Limited and related parties in the wholly -owned Group during the financial years ended 30 June 2026 and 30 June 2025 consisted of: (a) Contributions to share capital by Horizon Oil Limited; (b) Loans advanced by Horizon Oil Limited; (c) Loans repaid to Horizon Oil Limited; (d) Payments to Horizon Oil Limited under financial guarantee contract arrangements; (e) Interest payments to Horizon Oil Limited on loans advanced to subsidiaries; (f) Dividends paid to Horizon Oil Limited; and (g) Reimbursement of expenses to Horizon Oil Limited. The reimbursement of expenses to Horizon Oil Limited by subsidiaries is based on costs recharged on a relevant time allocation of consultants and employees and associated office charges. Terms and conditions Transactions relating to dividends, calls on partly paid shares and subscriptions for new ordinary shares were on the same terms and conditions that applied to other shareholders. PERMIT OR LICENCE PRINCIPAL ACTIVITIES INTEREST (%) 30 JUNE 2026 INTEREST (%) 30 JUNE 2025 NEW ZEALAND PMP 38160 (Maari / Manaia) Oil and gas production, exploration and development 5.00% - AUSTRALIA Mereenie OL4 & OL5 Oil and gas production, exploration and development 7.50% - AUSTRALIA Palm Valley Oil and gas production, exploration and development 15.00% - AUSTRALIA Dingo Oil and gas production, exploration and development 15.00% - 1 Represents the % interest held by Cue Energy Resources Limited. The Horizon Group interest is 57.03% of the Cue Energy Resources Limited interest. Note 25 Remuneration of external auditors CONSOLIDATED 2026 US$ 2025 US$ During the financial year, the following fees were paid or payable for services provided by the external auditor of the parent entity and its related practices: PWC AUSTRALIA – HORIZON OIL LIMITED Audit and other assurance services Audit and review of financial reports 295,337 231,365 Other assurance services 15,988 13,788 TOTAL PWC AUSTRALIA 311,325 245,153 KPMG AUSTRALIA – CUE ENERGY RESOURCES LIMITED Audit and other assurance services Audit and review of financial reports 226,261 - Other assurance services 5,569 - Other services Advisory services 20,609 - Tax compliance 12,385 - TOTAL KPMG AUSTRALIA 264,824 - Total auditors’ remuneration 576,149 245,153 It is the Group’s policy to employ PricewaterhouseCoopers on assignments additional to its statutory external audit duties where PricewaterhouseCoopers’ expertise and experience with the Group are important. It is the Group’s policy to seek competitive tenders for all major consulting projects.
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Horizon Oil Annual Report 2026 102 Long Term Incentive Plan (Performance Rights) The LTI plan approved at the 2022 annual general meeting apply to senior executives and involve the grant of performance rights which may vest subject (amongst other things) the achievement of certain share price hurdles, A$25 million of cumulative share trades at or above the share price hurdles and the one-month V W A P , a t t h e o n e y e a r a n n i v e r s a r y o f achieving the share price hurdle, must meet or exceed the share price hurdle. This plan applied for from and including the 2023 financial year. Under the LTI Plan, the board has the discretion, subject to the ASX Listing Rule requirements, to grant performance rights to executives as long -term incentives. A performance right is a right to receive shares in the Company, subject to the Company satisfying certain conditions, including performance conditions. Each performance right entitles the holder to one Horizon Ordinary share should the performance right vest. No price is payable by a participant in the Long-Term Incentive Plan on the exercise of a Performance Right . During the financial year, the Horizon Long-Term Incentive Plan and Horizon Employee Option Scheme are also administered by the Horizon Employee Share Trust. This trust is consolidated in accordance with Note 1(C ). Shares issued by the trust to the employees are acquired through the issuance of new Ordinary shares by the Company . Shares held by the trust and not yet issued to employees at the end of the reporting period are shown as treasury shares in the financial statements. Refer to Note 19(D) for details. Performance Rights issued The independently assessed fair value ’s at grant date of these performance rights are disclosed below. The terms and conditions of each grant of Performance Rights presently on issue are as follows: TRANCHE NUMBER OF RIGHTS1 SHARE PRICE HURDLE (A$)1 VALUE PER PERFORMANCE RIGHT AT GRANT DATE2 DATE EXERCISED CEO Performance Rights issued with a grant date of 20 November 2024 Tranche A1 Rights 1,145,832 0.160 A$0.1619 - Tranche A2 Rights 2,291,665 0.160 A$0.1633 - Tranche B1 Rights 1,111,110 0.180 A$0.1548 - Tranche B2 Rights 2,222,222 0.180 A$0.1561 - Tranche C1 Rights 1,083,332 0.200 A$0.1481 - Tranche C2 Rights 2,166,666 0.200 A$0.1495 - COO Performance Rights issued with a grant date of 28 August 2024 Tranche A1 Rights 763,888 0.160 A$0.1643 - Tranche A2 Rights 1,527,777 0.160 A$0.1646 - Tranche B1 Rights 740,740 0.180 A$0.1592 - Tranche B2 Rights 1,481,482 0.180 A$0.1595 - Tranche C1 Rights 722,221 0.200 A$0.1539 - Tranche C2 Rights 1,444,442 0.200 A$0.1549 - CFO Performance Rights issued with a grant date of 28 August 2024 Tranche A1 Rights 611,110 0.160 A$0.1643 - Tranche A2 Rights 1,222,222 0.160 A$0.1646 - Tranche B1 Rights 592,592 0.180 A$0.1592 - Tranche B2 Rights 1,185,184 0.180 A$0.1595 - Tranche C1 Rights 577,777 0.200 A$0.1539 - Tranche C2 Rights 1,155,554 0.200 A$0.1549 - All other transactions were made on normal commercial terms and conditions and at market rates, except that there are no fixed terms for the repayment of loans between the parties. Certain loans to/from subsidiaries are subject to interest. The average interest rate on loans attracting interest during the fin ancial year was SOFR plus 4.53% (2025: LIBOR plus 4.53%). Outstanding balances are unsecured and repayable in cash. Note 28 Share-based payments Set out below is a summary of performance rights, deferred STI rights and share appreciation rights on issue: GRANT DATE ESTIMATED EXPIRY DATE EXERCISE PRICE BALANCE START OF FINANCIAL YEAR GRANTED DURING FINANCIAL YEAR1 EXERCISED DURING FINANCIAL YEAR LAPSED / CANCELLED DURING FINANCIAL YEAR BALANCE END OF FINANCIAL YEAR VESTED & EXERCISABLE AT END OF FINANCIAL YEAR NUMBER NUMBER NUMBER NUMBER NUMBER NUMBER CONSOLIDATED ENTITY 2026 PERFORMANCE RIGHTS ISSUED 28/08/2024 30/06/2027 - 18,299,652 3,078,105 - - 21,377,757 7,125,919 20/11/2024 30/06/2027 - 8,577,963 1,442,864 - - 10,020,827 3,340,276 TOTAL 26,877,615 4,520,969 - - 31,398,584 10,466,195 DEFERRED STI RIGHTS ISSUED 30/06/2024 N/A - 4,314,267 - (4,314,267) - - - 30/06/2025 N/A - - 5,087,065 - - 5,087,065 5,087,065 TOTAL 4,314,267 5,087,065 (4,314,267) - 5,087,065 5,087,065 1 In accordance with the plan, the number of rights held were adjusted during the financial year for the aggregate A$3.0 cents of dividend distributions per share. A further adjustment associated with the AUD 1.0 cent FY26 final dividend will apply. GRANT DATE ESTIMATED EXPIRY DATE EXERCISE PRICE BALANCE START OF FINANCIAL YEAR GRANTED DURING FINANCIAL YEAR EXERCISED DURING FINANCIAL YEAR LAPSED / CANCELLED DURING FINANCIAL YEAR BALANCE END OF FINANCIAL YEAR VESTED & EXERCISABLE AT END OF FINANCIAL YEAR NUMBER NUMBER NUMBER NUMBER NUMBER NUMBER CONSOLIDATED ENTITY 2025 PERFORMANCE RIGHTS ISSUED 28/08/2024 30/06/2027 - - 18,299,652 - - 18,299,652 - 20/11/2024 30/06/2027 - - 8,577,963 - - 8,577,963 - TOTAL - 26,877,615 - - 26,877,615 - DEFERRED STI RIGHTS ISSUED 30/06/2023 N/A - 4,315,706 - (4,315,706) - - - 30/06/20241 N/A - - 4,314,267 - - 4,314,267 4,314,267 TOTAL 4,315,706 4,314,267 (4,315,706) - 4,314,267 4,314,267 1 In accordance with the plan, the number of 2024 deferred STI rights held were adjusted during the financial year for the aggregate A$3.0 cents of dividend distributions per share.
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Horizon Oil Annual Report 2026 103 Long Term Incentive Plan (Performance Rights) The LTI plan approved at the 2022 annual general meeting apply to senior executives and involve the grant of performance rights which may vest subject (amongst other things) the achievement of certain share price hurdles, A$25 million of cumulative share trades at or above the share price hurdles and the one-month V W A P , a t t h e o n e y e a r a n n i v e r s a r y o f achieving the share price hurdle, must meet or exceed the share price hurdle. This plan applied for from and including the 2023 financial year. Under the LTI Plan, the board has the discretion, subject to the ASX Listing Rule requirements, to grant performance rights to executives as long -term incentives. A performance right is a right to receive shares in the Company, subject to the Company satisfying certain conditions, including performance conditions. Each performance right entitles the holder to one Horizon Ordinary share should the performance right vest. No price is payable by a participant in the Long-Term Incentive Plan on the exercise of a Performance Right . During the financial year, the Horizon Long-Term Incentive Plan and Horizon Employee Option Scheme are also administered by the Horizon Employee Share Trust. This trust is consolidated in accordance with Note 1(C ). Shares issued by the trust to the employees are acquired through the issuance of new Ordinary shares by the Company . Shares held by the trust and not yet issued to employees at the end of the reporting period are shown as treasury shares in the financial statements. Refer to Note 19(D) for details. Performance Rights issued The independently assessed fair value ’s at grant date of these performance rights are disclosed below. The terms and conditions of each grant of Performance Rights presently on issue are as follows: TRANCHE NUMBER OF RIGHTS1 SHARE PRICE HURDLE (A$)1 VALUE PER PERFORMANCE RIGHT AT GRANT DATE2 DATE EXERCISED CEO Performance Rights issued with a grant date of 20 November 2024 Tranche A1 Rights 1,145,832 0.160 A$0.1619 - Tranche A2 Rights 2,291,665 0.160 A$0.1633 - Tranche B1 Rights 1,111,110 0.180 A$0.1548 - Tranche B2 Rights 2,222,222 0.180 A$0.1561 - Tranche C1 Rights 1,083,332 0.200 A$0.1481 - Tranche C2 Rights 2,166,666 0.200 A$0.1495 - COO Performance Rights issued with a grant date of 28 August 2024 Tranche A1 Rights 763,888 0.160 A$0.1643 - Tranche A2 Rights 1,527,777 0.160 A$0.1646 - Tranche B1 Rights 740,740 0.180 A$0.1592 - Tranche B2 Rights 1,481,482 0.180 A$0.1595 - Tranche C1 Rights 722,221 0.200 A$0.1539 - Tranche C2 Rights 1,444,442 0.200 A$0.1549 - CFO Performance Rights issued with a grant date of 28 August 2024 Tranche A1 Rights 611,110 0.160 A$0.1643 - Tranche A2 Rights 1,222,222 0.160 A$0.1646 - Tranche B1 Rights 592,592 0.180 A$0.1592 - Tranche B2 Rights 1,185,184 0.180 A$0.1595 - Tranche C1 Rights 577,777 0.200 A$0.1539 - Tranche C2 Rights 1,155,554 0.200 A$0.1549 - All other transactions were made on normal commercial terms and conditions and at market rates, except that there are no fixed terms for the repayment of loans between the parties. Certain loans to/from subsidiaries are subject to interest. The average interest rate on loans attracting interest during the fin ancial year was SOFR plus 4.53% (2025: LIBOR plus 4.53%). Outstanding balances are unsecured and repayable in cash. Note 28 Share-based payments Set out below is a summary of performance rights, deferred STI rights and share appreciation rights on issue: GRANT DATE ESTIMATED EXPIRY DATE EXERCISE PRICE BALANCE START OF FINANCIAL YEAR GRANTED DURING FINANCIAL YEAR1 EXERCISED DURING FINANCIAL YEAR LAPSED / CANCELLED DURING FINANCIAL YEAR BALANCE END OF FINANCIAL YEAR VESTED & EXERCISABLE AT END OF FINANCIAL YEAR NUMBER NUMBER NUMBER NUMBER NUMBER NUMBER CONSOLIDATED ENTITY 2026 PERFORMANCE RIGHTS ISSUED 28/08/2024 30/06/2027 - 18,299,652 3,078,105 - - 21,377,757 7,125,919 20/11/2024 30/06/2027 - 8,577,963 1,442,864 - - 10,020,827 3,340,276 TOTAL 26,877,615 4,520,969 - - 31,398,584 10,466,195 DEFERRED STI RIGHTS ISSUED 30/06/2024 N/A - 4,314,267 - (4,314,267) - - - 30/06/2025 N/A - - 5,087,065 - - 5,087,065 5,087,065 TOTAL 4,314,267 5,087,065 (4,314,267) - 5,087,065 5,087,065 1 In accordance with the plan, the number of rights held were adjusted during the financial year for the aggregate A$3.0 cents of dividend distributions per share. A further adjustment associated with the AUD 1.0 cent FY26 final dividend will apply. GRANT DATE ESTIMATED EXPIRY DATE EXERCISE PRICE BALANCE START OF FINANCIAL YEAR GRANTED DURING FINANCIAL YEAR EXERCISED DURING FINANCIAL YEAR LAPSED / CANCELLED DURING FINANCIAL YEAR BALANCE END OF FINANCIAL YEAR VESTED & EXERCISABLE AT END OF FINANCIAL YEAR NUMBER NUMBER NUMBER NUMBER NUMBER NUMBER CONSOLIDATED ENTITY 2025 PERFORMANCE RIGHTS ISSUED 28/08/2024 30/06/2027 - - 18,299,652 - - 18,299,652 - 20/11/2024 30/06/2027 - - 8,577,963 - - 8,577,963 - TOTAL - 26,877,615 - - 26,877,615 - DEFERRED STI RIGHTS ISSUED 30/06/2023 N/A - 4,315,706 - (4,315,706) - - - 30/06/20241 N/A - - 4,314,267 - - 4,314,267 4,314,267 TOTAL 4,315,706 4,314,267 (4,315,706) - 4,314,267 4,314,267 1 In accordance with the plan, the number of 2024 deferred STI rights held were adjusted during the financial year for the aggregate A$3.0 cents of dividend distributions per share.
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Horizon Oil Annual Report 2026 104 E xpenses arising from share-based payment transactions Total expenses arising from share -based payment transactions recognised during the financial year as part of employee benefits expense in profit or loss were as follows: CONSOLIDATED 30 JUNE 2026 US$’000 30 JUNE 2025 US$’000 PERFORMANCE RIGHTS ISSUED UNDER: Long Term Incentive Plan 909 1,099 Deferred STI Plan 591 498 Total employee share-based payments expense 1,500 1,597 Performance Rights in respect of which expiry dates were modified during the financial year No Performance Rights expiry dates were modified during the financial year. Performance Rights exercised during the financial year No Performance Rights were exercised and settled during the financial year. Performance Rights lapsing or cancelled during the financial year No Performance Rights lapsed or were cancelled during the financial year . Performance Rights lapsed subsequent to 30 June 2026 No performance rights have lapsed subsequent to financial year end. Deferred STI Rights exercised during the financial year During the financial year 4,314,267 Deferred STI Rights were exercised and settled with the issuance of 2,286,537 Ordinary shares which were transferred from the Horizon Employee Incentive Trust and cash paid of A$ 468,740. Deferred STI Rights issued subsequent to 30 June 202 6 Subsequent to period end, 3,728,783 deferred STI rights were issued in relation to the FY2 6 STI’s awarded. 1,165,593 of these rights remain subject to shareholder approval at the 2026 Annual General Meeting. Deferred STI Rights settled subsequent to 30 June 2026 Subsequent to period end, 3,209,492 deferred STI rights were settled in cash per Board discretion. Note 29 Employee entitlements C ONSOLIDATED 30 JUNE 2026 US$’000 30 JUNE 2025 US$’000 EMPLOYEE ENTITLEMENT LIABILITIES ARE INCLUDED WITHIN: Current – other creditors 507 288 Non-current – other creditors (Note 15) 140 116 NUMBER 2026 NUMBER 2025 EMPLOYEE NUMBERS Average number of employees during financial year 17 10 TRANCHE NUMBER OF RIGHTS1 SHARE PRICE HURDLE (A$)1 VALUE PER PERFORMANCE RIGHT AT GRANT DATE2 DATE EXERCISED General Manager Performance Rights issued with a grant date of 28 August 2024 Tranche A1 Rights 763,888 0.160 A$0.1643 - Tranche A2 Rights 1,527,777 0.160 A$0.1646 - Tranche B1 Rights 740,740 0.180 A$0.1592 - Tranche B2 Rights 1,481,482 0.180 A$0.1595 - Tranche C1 Rights 722,221 0.200 A$0.1539 - Tranche C2 Rights 1,444,442 0.200 A$0.1549 - Company Secretary Performance Rights issued with a grant date of 28 August 2024 Tranche A1 Rights 305,555 0.160 A$0.1643 - Tranche A2 Rights 611,110 0.160 A$0.1646 - Tranche B1 Rights 296,296 0.180 A$0.1592 - Tranche B2 Rights 592,592 0.180 A$0.1595 - Tranche C1 Rights 288,888 0.200 A$0.1539 - Tranche C2 Rights 577,777 0.200 A$0.1549 - 1 I n accordance with the plan, the Share Price Hurdles were adjusted to account for distributions to shareholders during the 2026 financial year. Share price hurdles are only adjusted for distributions made prior to the Performance Rights being exercised. A further adjustment of AUD 1.0 cent will apply to the FY26 final dividend. 2 T he value per Performance Right at grant date is determined by an independent expert. 3 N o price is payable by a participant in the Long- Term Incentive Plan on the exercise of a Performance Right. T he Group engages external, independent and qualified valuers to determine the fair value at grant date. The fair value of the performance rights is using a Monte Carlo simulation technique. The Monte Carlo simulation technique used to calculate the theoretical value of the performance rights uses current stock prices, expected dividend yield, expected interest rates, time to expiration and expected volatility. A calculated share price volatility of 55% - 60.0% was applied in the valuation s. All other parameters were based on the specific terms of the share appreciation rights issued or observable market data. The simulation inputs for the grant of Performance Rights during the financial year ended 30 June 2026 included: CEO COO, CFO & OTHER EXECUTIVES Expiry date 30 June 2029 30 June 2029 Grant date 20 November 2024 28 August 2024 Exercise price Nil1 Nil1 Expected price volatility 55% p.a. 55% p.a. Risk free rate 4.17% p.a. 3.62% p.a. Expected dividend yield Nil Nil 1 N o price is payable by a participant in the Long -Term Incentive Plan on the exercise of a Performance Right. The respective hurdles prices are disclosed above and in section 6.6 of the Remuneration Report.
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Horizon Oil Annual Report 2026 105 Expenses arising from share-based payment transactions Total expenses arising from share -based payment transactions recognised during the financial year as part of employee benefits expense in profit or loss were as follows: CONSOLIDATED 30 JUNE 2026 US$’000 30 JUNE 2025 US$’000 PERFORMANCE RIGHTS ISSUED UNDER: Long Term Incentive Plan 909 1,099 Deferred STI Plan 591 498 Total employee share-based payments expense 1,500 1,597 Performance Rights in respect of which expiry dates were modified during the financial year No Performance Rights expiry dates were modified during the financial year. Performance Rights exercised during the financial year No Performance Rights were exercised and settled during the financial year. Performance Rights lapsing or cancelled during the financial year No Performance Rights lapsed or were cancelled during the financial year . Performance Rights lapsed subsequent to 30 June 2026 No performance rights have lapsed subsequent to financial year end. Deferred STI Rights exercised during the financial year During the financial year 4,314,267 Deferred STI Rights were exercised and settled with the issuance of 2,286,537 Ordinary shares which were transferred from the Horizon Employee Incentive Trust and cash paid of A$ 468,740. Deferred STI Rights issued subsequent to 30 June 2026 Subsequent to period end, 3,728,783 deferred STI rights were issued in relation to the FY26 STI’s awarded. 1,165,593 of these rights remain subject to shareholder approval at the 2026 Annual General Meeting. Deferred STI Rights settled subsequent to 30 June 2026 Subsequent to period end, 3,209,492 deferred STI rights were settled in cash per Board discretion. Note 29 Employee entitlements CONSOLIDATED 30 JUNE 2026 US$’000 30 JUNE 2025 US$’000 EMPLOYEE ENTITLEMENT LIABILITIES ARE INCLUDED WITHIN: Current – other creditors 507 288 Non-current – other creditors (Note 15) 140 116 NUMBER 2026 NUMBER 2025 EMPLOYEE NUMBERS Average number of employees during financial year 17 10
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Horizon Oil Annual Report 2026 106 Note 33 Reconciliation of profit after income tax to net cash flows from operating activities CONSOLIDATED 30 JUNE 2026 US$’000 30 JUNE 2025 US$’000 PROFIT FOR FINANCIAL YEAR 11,118 12,247 Exploration and development expenditure written off / expensed 525 494 Depreciation expense 143 175 Movement in employee entitlement liabilities 116 76 Non-cash employee share-based payments expense 1,500 1,597 Amortisation expense 32,156 32,967 Amortisation of prepaid financing costs 512 94 Discount unwinding on provision for restoration 2,768 2,659 Impairment of intangible assets 246 - Share of net profit after tax from joint venture in Thailand (3,672) - Dividends received from joint venture in Thailand 4,048 - CHANGE IN OPERATING ASSETS AND LIABILITIES: Decrease / (increase) in trade debtors 9,608 (6,815) Increase in other debtors and prepayments (263) (403) (Increase) / decrease in inventory (5,884) 5,797 Decrease in deferred tax liabilities (1,216) (785) Increase in deferred tax assets (11,230) (6,364) Decrease in tax payable (531) (31) Increase / (decrease) in trade creditors 2,108 (140) Increase / (decrease) in other creditors 5,184 (5,681) NET CASH INFLOW FROM OPERATING ACTIVITIES 47,235 35,887 Note 30 Contingent asset The Group had no contingent assets as at 30 June 2026. Note 31 Contingent liabilities The Group had contingent liabilities as at 30 June 2026 and 30 June 2025 that may become payable in respect of: Subject to future events, up to US$6 million in contingent consideration may become payable to Exxon in relation to the newly acquired Thailand assets. In accordance with normal oil and gas industry practice, the Group has entered into joint operations and farm -out agreements with other parties for the purpose of exploring and developing its petroleum interests. If a participant to a joint operation defaults and fails to contribute its share of joint operation obligations, then the remaining joint operation participants are jointly and severally liable to meet the obligations of the defaulting participant. In this event, the interest in the permit or licence held by the defaulting participant may be redistributed to the remaining participants. In the event of a d e f a u l t , a c o n t i n g e n t l i a b i l i t y e x i s t s i n r e s p e c t o f e x p e n d i t u r e c o m m i t m e n t s d u e t o b e m e t b y t h e G r o u p i n r e s p e c t o f defaulting joint operation participants. The Group occasionally receives claims arising from its operations in the normal course of business. In the opinion of the directors, all such matters are either covered by insurance or, if not covered, are without merit or are of such a nature the amounts involved would not have a material impact on the results. No material losses are anticipated in respect of any of the above contingent liabilities. Note 32 Exploration and development commitments The Group has entered into joint operations for the purpose of exploring, developing and producing from certain petroleum interests. To maintain existing interests or rights to earn interests in those joint operations the Group will be expected t o make contributions to ongoing exploration and development programs. Since such programs are subject to continual review by operating committees, upon which the Group is represented, the extent of future contributions in accordance with these arrangements is subject to continual renegotiation. Subject to the above -mentioned limitations, the directors have prepared the following disclosure of exploration and development expenditure commitments not recognised in the consolidated financial statements. These are payable as follows, based on current status and knowledge of estimated quantum and timing of such commitments by segment. 2026 NEW ZEALAND DEVELOPMENT US$’000 CHINA DEVELOPMENT US$’000 AUSTRALIA DEVELOPMENT US$’000 THAILAND DEVELOPMENT US$’000 CUE RESOURCES US$’000 TOTAL US$’000 Within one year 1,350 2,737 1,830 1,475 6,128 13,520 Total 1,350 2,737 1,830 1,475 6,128 13,520 2025 NEW ZEALAND DEVELOPMENT US$’000 CHINA DEVELOPMENT US$’000 AUSTRALIA DEVELOPMENT US$’000 TOTAL US$’000 Within one year 779 2,701 1,175 4,655 Total 779 2,701 1,175 4,655 The above commitments may be deferred or modified with the agreement of the host government, by variations to the terms of individual petroleum interests, or extensions to the terms thereof. Another factor likely to delay timing of these commitments is the potential lack of availability of suitable drilling rigs in the area of interest. The commitments may also b e r e d u c e d b y t h e G r o u p e n t e r i n g i n t o f a r m-o u t a g r e e m e n t s o r w o r k i n g i n t e r e s t t r a d e s , b o t h o f w h i c h a r e t y p i c a l o f t h e normal operating activities of the Group.
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Horizon Oil Annual Report 2026 107 Note 33 Reconciliation of profit after income tax to net cash flows from operating activities CONSOLIDATED 30 JUNE 2026 US$’000 30 JUNE 2025 US$’000 PROFIT FOR FINANCIAL YEAR 11,118 12,247 Exploration and development expenditure written off / expensed 525 494 Depreciation expense 143 175 Movement in employee entitlement liabilities 116 76 Non-cash employee share-based payments expense 1,500 1,597 Amortisation expense 32,156 32,967 Amortisation of prepaid financing costs 512 94 Discount unwinding on provision for restoration 2,768 2,659 Impairment of intangible assets 246 - Share of net profit after tax from joint venture in Thailand (3,672) - Dividends received from joint venture in Thailand 4,048 - CHANGE IN OPERATING ASSETS AND LIABILITIES: Decrease / (increase) in trade debtors 9,608 (6,815) Increase in other debtors and prepayments (263) (403) (Increase) / decrease in inventory (5,884) 5,797 Decrease in deferred tax liabilities (1,216) (785) Increase in deferred tax assets (11,230) (6,364) Decrease in tax payable (531) (31) Increase / (decrease) in trade creditors 2,108 (140) Increase / (decrease) in other creditors 5,184 (5,681) NET CASH INFLOW FROM OPERATING ACTIVITIES 47,235 35,887
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Horizon Oil Annual Report 2026 108 Note 35 Parent Entity financial information [[ii]] Summary financial information The individual financial statements for the Parent Entity show the following aggregate amounts: PARENT ENTITY 2026 US$’000 2025 US$’000 STATEMENT OF FINANCIAL POSITION Current assets 15,524 24,153 Non-current assets 105,149 93,631 Total assets 120,673 117,784 Current liabilities 3,108 2,096 Non-current liabilities 128 115 Total liabilities 3,236 2,212 Net assets 117,437 115,572 Contributed equity 150,705 150,399 Share based payments and equity considerations reserves 32,494 8,634 Accumulated losses (127,009) (108,373) Profit reserve 61,247 64,914 Total equity 117,437 115,573 Profit/(loss) for the financial year 1,865 (9,380) Total comprehensive profit/(loss) for the financial year 1,865 (9,380) [[iiii]] Guarantees entered into by the parent entity The parent entity has provided guarantees in respect of bank loan of its subsidiaries amounting to US$ 48.7 million (2025: US$26.1 million) and has also provided customary joint venture guarantees. No liability has been recognised for guarantees provided. After factoring in the likelihood that the parent entity would be required to perform under the guarantees the fair value of the liability was not considered material. [[iiiiii]] Contingent liabilities of the parent entity The parent entity did not have any contingent liabilities as at 30 June 2026 or 30 June 2025. For information about guarantees given by the parent entity, see above. [[iivv]] Contractual commitment for the acquisition of property, plant or equipment As at 30 June 20 26, the parent entity had no contractual commitments for the acquisition of property, plant or equipment (30 June 2025 – US$Nil). Note 36 Events after balance sheet date Other than the matters disclosed above and in this report, there has not been any matter or circumstance which has arisen since 30 June 2026 that has significantly affected, or may significantly affect: – the Group’s operations in future financial years; or – the results of those operations in future financial years; or – the Group’s state of affairs in future financial years. The financial statements were authorised for issue by the Board of Directors on 27 August 2026. The Board of Directors has the power to amend and reissue the financial statements. Note 34 Earnings per share CONSOLIDATED 2026 US CENTS 2025 US CENTS (a) Basic earnings per share attributable to the ordinary equity holders of the Company 0.65 0.75 (b) Diluted earnings per share attributable to the ordinary equity holders of the Company 0.64 0.75 2026 NUMBER 2025 NUMBER WEIGHTED AVERAGE NUMBER OF SHARES USED AS THE DENOMINATOR Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share 1,628,725,163 1,626,432,235 Weighted average number of ordinary shares and potential ordinary shares used as the denominator in calculating diluted earnings per share 1,665,210,812 1,630,746,502 2026 US$’000 2025 US$’000 RECONCILIATION OF EARNING USED IN CLACULATING EARNINGS PER SHARE Profit attributable to the ordinary equity holders of the company used in calculating basic and diluted earnings per share 10,649 12,247 Information concerning the classification of securities A. Partly paid ordinary shares Partly paid ordinary shares carry the rights of fully paid ordinary shares and to that extent they have been recognised as ordinary share equivalents in the determination of basic earnings per share. All partly paid shares on issue are held by the Company. Details regarding the partly paid ordinary shares are set out in Note 18. B. Performance rights and deferred STI rights granted as compensation Performance rights and deferred STI rights granted to employees under the Long -Term Incentive Plan or the deferred STI plan are included in the calculation of diluted earnings per share to the extent to which they are dilutive. The performance rights are considered to be contingently issuable shares and are treated as outstanding and included in the calculation of diluted earnings per share if the relevant performance hurdles have been met. Performance Rights and deferred STI rights have not been included in the determination of basic earnings per share. Details regarding the options and share appreciation rights are set out in Note 28.
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Horizon Oil Annual Report 2026 109 Note 35 Parent Entity financial information [[ii]] Summary financial information The individual financial statements for the Parent Entity show the following aggregate amounts: PARENT ENTITY 2026 US$’000 2025 US$’000 STATEMENT OF FINANCIAL POSITION Current assets 15,524 24,153 Non-current assets 105,149 93,631 Total assets 120,673 117,784 Current liabilities 3,108 2,096 Non-current liabilities 128 115 Total liabilities 3,236 2,212 Net assets 117,437 115,572 Contributed equity 150,705 150,399 Share based payments and equity considerations reserves 32,494 8,634 Accumulated losses (127,009) (108,373) Profit reserve 61,247 64,914 Total equity 117,437 115,573 Profit/(loss) for the financial year 1,865 (9,380) Total comprehensive profit/(loss) for the financial year 1,865 (9,380) [[iiii]] Guarantees entered into by the parent entity The parent entity has provided guarantees in respect of bank loan of its subsidiaries amounting to US$ 48.7 million (2025: US$26.1 million) and has also provided customary joint venture guarantees. No liability has been recognised for guarantees provided. After factoring in the likelihood that the parent entity would be required to perform under the guarantees the fair value of the liability was not considered material. [[iiiiii]] Contingent liabilities of the parent entity The parent entity did not have any contingent liabilities as at 30 June 2026 or 30 June 2025. For information about guarantees given by the parent entity, see above. [[iivv]] Contractual commitment for the acquisition of property, plant or equipment As at 30 June 20 26, the parent entity had no contractual commitments for the acquisition of property, plant or equipment (30 June 2025 – US$Nil). Note 36 Events after balance sheet date Other than the matters disclosed above and in this report, there has not been any matter or circumstance which has arisen since 30 June 2026 that has significantly affected, or may significantly affect: – the Group’s operations in future financial years; or – the results of those operations in future financial years; or – the Group’s state of affairs in future financial years. The financial statements were authorised for issue by the Board of Directors on 27 August 2026. The Board of Directors has the power to amend and reissue the financial statements.
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Horizon Oil Annual Report 2026 110 HORIZON OIL LIMITED CONSOLIDATED ENTITY DISCLOSURE STATEMENT AS AT 30 JUNE 2026 NAME OF ENTITY TYPE OF ENTITY TRUSTEE, PARTNER OR JV PARTICIPANT % SHARE CAPITAL COUNTRY OF INCORPORATION AUSTRALIAN RESIDENT FOREIGN JURISDICTION Horizon Oil Limited Body Corporate N/A N/A Australia Yes N/A Horizon Oil International Limited Body Corporate JV Participant1 100 New Zealand No New Zealand Horizon Oil International Holdings Limited Body Corporate N/A 100 BVI No BVI Horizon Oil (Beibu) Limited Body Corporate JV Participant2 100 BVI No China Horizon Oil (China Holdings) Limited Body Corporate N/A 100 BVI No BVI Horizon Oil Employee Incentive Trust Trust N/A N/A N/A N/A N/A Horizon Australia Investments Pty Limited Body Corporate N/A 100 Australia Yes N/A Horizon Australia Energy Pty Limited Body Corporate JV Participant3 100 Australia Yes N/A Horizon Thailand Investments Pty Limited Body Corporate N/A 100 Australia Yes N/A MH Energy Thailand LLC Body Corporate JV Participant4 75 United States of America No Singapore Cue Energy Resources Limited Body Corporate N/A 57.03 Australia Yes N/A Cue Mahakam Hilir Pty Ltd Body Corporate N/A 57.03 Australia Yes N/A Cue (Ashmore Cartier) Pty Ltd Body Corporate N/A 57.03 Australia Yes N/A Cue Sampang Pty Ltd Body Corporate JV Participant6 57.03 Australia Yes N/A Cue Taranaki Pty Ltd Body Corporate JV Participant1 57.03 Australia Yes N/A Cue Kalimantan Pte Ltd5 Body Corporate N/A 57.03 Singapore No Singapore Cue Mahato Pty Ltd Body Corporate JV Participant7 57.03 Australia Yes N/A Cue Exploration Pty Ltd Body Corporate N/A 57.03 Australia Yes N/A Cue Palm Valley Pty Ltd Body Corporate JV Participant3 57.03 Australia Yes N/A Cue Mereenie Pty Ltd Body Corporate JV Participant3 57.03 Australia Yes N/A Cue Dingo Pty Ltd Body Corporate JV Participant3 57.03 Australia Yes N/A
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Horizon Oil Annual Report 2026 111 HORIZON OIL LIMITED CONSOLIDATED ENTITY DISCLOSURE STATEMENT AS AT 30 JUNE 2026 NAME OF ENTITY TYPE OF ENTITY TRUSTEE, PARTNER OR JV PARTICIPANT % SHARE CAPITAL COUNTRY OF INCORPORATION AUSTRALIAN RESIDENT FOREIGN JURISDICTION Horizon Oil Limited Body Corporate N/A N/A Australia Yes N/A Horizon Oil International Limited Body Corporate JV Participant1 100 New Zealand No New Zealand Horizon Oil International Holdings Limited Body Corporate N/A 100 BVI No BVI Horizon Oil (Beibu) Limited Body Corporate JV Participant2 100 BVI No China Horizon Oil (China Holdings) Limited Body Corporate N/A 100 BVI No BVI Horizon Oil Employee Incentive Trust Trust N/A N/A N/A N/A N/A Horizon Australia Investments Pty Limited Body Corporate N/A 100 Australia Yes N/A Horizon Australia Energy Pty Limited Body Corporate JV Participant3 100 Australia Yes N/A Horizon Thailand Investments Pty Limited Body Corporate N/A 100 Australia Yes N/A MH Energy Thailand LLC Body Corporate JV Participant4 75 United States of America No Singapore Cue Energy Resources Limited Body Corporate N/A 57.03 Australia Yes N/A Cue Mahakam Hilir Pty Ltd Body Corporate N/A 57.03 Australia Yes N/A Cue (Ashmore Cartier) Pty Ltd Body Corporate N/A 57.03 Australia Yes N/A Cue Sampang Pty Ltd Body Corporate JV Participant6 57.03 Australia Yes N/A Cue Taranaki Pty Ltd Body Corporate JV Participant1 57.03 Australia Yes N/A Cue Kalimantan Pte Ltd5 Body Corporate N/A 57.03 Singapore No Singapore Cue Mahato Pty Ltd Body Corporate JV Participant7 57.03 Australia Yes N/A Cue Exploration Pty Ltd Body Corporate N/A 57.03 Australia Yes N/A Cue Palm Valley Pty Ltd Body Corporate JV Participant3 57.03 Australia Yes N/A Cue Mereenie Pty Ltd Body Corporate JV Participant3 57.03 Australia Yes N/A Cue Dingo Pty Ltd Body Corporate JV Participant3 57.03 Australia Yes N/A 1 JV participant in oil license offshore New Zealand. 2 JV Participant in oil license offshore China. 3 JV Participant in oil and gas licenses onshore Australia. 4 JV Participant in oil and gas licenses onshore Thailand. 5 Shares held by Cue Mahakam Hilir Pty Limited. 6 JV Participant in gas license offshore Indonesia. 7 JV Participant in oil license onshore Indonesia. Basis of preparation This consolidated entity disclosure statement (CEDS) has been prepared in accordance with the Corporations Act 2001 and includes information for each entity that was part of the consolidated entity as at the end of the financial year in accordance with AASB 10 Consolidated Financial Statements. Determination of tax residency Section 295 (3B)(a) of the Corporation Act 2001 defines tax residency as having the meaning in the Income Tax Assessment Act 1997. The determination of tax residency involves judgement as there are different interpretations that could be adopted, and which could give rise to a different conclusion on residency. In determining tax residency, the consolidated entity has applied the following interpretations: - Australian tax residency The consolidated entity has applied current legislation and judicial precedent, including having regard to the Tax Commissioner's public guidance in Tax Ruling TR 2018/5 - Foreign tax residency Where necessary, the consolidated entity has used independent tax advisers in foreign jurisdictions to assist in its determination of tax residency to ensure applicable foreign tax legislation has been complied with (see section 295(3A)(vii) of the Corporations Act 2001).
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SHAREHOLDER INFORMATION Horizon Oil Limited Horizon Oil Limited and Controlled Entities Securities Exchange Information as at 13 August 2026 DISTRIBUTION OF EQUITY SECURITIES The distribution of equity security holders ranked according to size at 13 August 2026 was as follows: ORDINARY SHARES UNLISTED OPTIONS SIZE OF HOLDING SHARES PERFORMANCE RIGHTS DEFERRED STI RIGHTS 1 to 1,000 307 - - 1,001 to 5,000 991 - - 5,001 to 10,000 1,076 - - 10,001 to 100,000 2,868 - - 100,001 and over 1.072 5 7 TOTAL 6,314 5 7 A total of 474 holders held less than a marketable parcel of 2,273 ordinary shares. TWENTY LARGEST SHAREHOLDERS The names of the twenty largest shareholders of the Company’s ordinary shares are listed below: NAME NO OF ORDINARY SHARES % OF ISSUED ORDS 1 IMC Investments Limited 400,574,175 22.60 2 J P Morgan Nominees Australia Limited 330,250,838 18.63 3 Citicorp Nominees Pty Limited 205,192,668 11.58 4 Echelon Pacific Holdings Pty Limited 117,834,145 6.65 5 BNP Paribas Nominees Pty Ltd 57,364,950 3.24 6 HSBC Custody Nominees (Australia) Limited 29,710,009 1.68 7 Mr Michael Francis Sheridan 15,433,289 0.87 8 Mr Richard Cameron Beament and Mrs Sophie Nicole Beament 13,619,286 0.77 9 Mr Richard James Williams 12,926,586 0.73 10 Cunact Pty Limited 10,100,000 0.57 11 Amidor Investments Pty Limited 9,000,000 0.51 12 Spinel Investments Pty Limited 6,966,748 0.39 13 Mr Jacob Yakoub Kazem 5,720,000 0.32 14 Brides Pty Limited 5,500,000 0.31 15 Mr Trevor David Inskip and Mrs Narelle Celia Inskip 5,471,336 0.31 16 Mr Kyle Christopher Keen and Ms Janine Jacqueline Gossman 5,058,261 0.29 17 Sharesies Australia Nominees Pty Limited 4,528,389 0.26 Horizon Oil Annual Report 2026112
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Horizon Oil Limited and Controlled Entities Securities Exchange Information as at 13 August 2026 DISTRIBUTION OF EQUITY SECURITIES The distribution of equity security holders ranked according to size at 13 August 2026 was as follows: ORDINARY SHARES UNLISTED OPTIONS SIZE OF HOLDING SHARES PERFORMANCE RIGHTS DEFERRED STI RIGHTS 1 to 1,000 307 - - 1,001 to 5,000 991 - - 5,001 to 10,000 1,076 - - 10,001 to 100,000 2,868 - - 100,001 and over 1.072 5 7 TOTAL 6,314 5 7 A total of 474 holders held less than a marketable parcel of 2,273 ordinary shares. TWENTY LARGEST SHAREHOLDERS The names of the twenty largest shareholders of the Company’s ordinary shares are listed below: NAME NO OF ORDINARY SHARES % OF ISSUED ORDS 1 IMC Investments Limited 400,574,175 22.60 2 J P Morgan Nominees Australia Limited 330,250,838 18.63 3 Citicorp Nominees Pty Limited 205,192,668 11.58 4 Echelon Pacific Holdings Pty Limited 117,834,145 6.65 5 BNP Paribas Nominees Pty Ltd 57,364,950 3.24 6 HSBC Custody Nominees (Australia) Limited 29,710,009 1.68 7 Mr Michael Francis Sheridan 15,433,289 0.87 8 Mr Richard Cameron Beament and Mrs Sophie Nicole Beament 13,619,286 0.77 9 Mr Richard James Williams 12,926,586 0.73 10 Cunact Pty Limited 10,100,000 0.57 11 Amidor Investments Pty Limited 9,000,000 0.51 12 Spinel Investments Pty Limited 6,966,748 0.39 13 Mr Jacob Yakoub Kazem 5,720,000 0.32 14 Brides Pty Limited 5,500,000 0.31 15 Mr Trevor David Inskip and Mrs Narelle Celia Inskip 5,471,336 0.31 16 Mr Kyle Christopher Keen and Ms Janine Jacqueline Gossman 5,058,261 0.29 17 Sharesies Australia Nominees Pty Limited 4,528,389 0.26 Horizon Oil Annual Report 2026 113
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NAME NO OF ORDINARY SHARES % OF ISSUED ORDS 18 Finclear Services Pty LImited 4,017,488 0.23 19 Ms Malaky Kazem 3,850,000 0.22 20 Mrs Maria Anna Dau and Mr Mark Kenneth Dau 3,705,000 0.21 Total 1,246,823,618 70.35 ISSUED SECURITIES Issued securities as at 13 August 2026: SECURITY NUMBER ON ISSUE NUMBER OF HOLDERS Ordinary fully paid shares1 1,774,478,592 6,314 Ordinary partly paid shares 1,500,000 1 Unlisted deferred STI rights 1,877,573 7 Unlisted Performance Rights 31,398,584 5 1 The Company’s ordinary fully shares are listed on the Australian Securities Exchange. SUBSTANTIAL HOLDERS Substantial holders in the Company are set out below: ORDINARY SECURITY NO, OF ORDINARY SHARES % OF ISSUED ORDS IMC Investments Ltd (an associate of Austral-Asia Energy Pty Ltd) 400,574,175 22.60 Samuel Terry Asset Management Pty Limited 314,232,423 17.70 Echelon Pacific Holdings Pty Limited 117,834,145 6.65 Total 832,640,743 46.95 VOTING RIGHTS Ordinary shares – fully paid Voting of members is governed by the Company’s Constitution. In summary, every member present in person or by proxy attorney or representative shall have one vote on a show of hands and one vote for each share on a poll. Ordinary shares – partly paid Voting of members is governed by the Company’s Constitution. In summary, every member present in person or by proxy attorney or representative shall have one vote on a show of hands and upon a poll, is entitled to one vote to the proportion of the total issue price then paid up. Deferred STI rights - unlisted No voting rights. Performance rights – unlisted No voting rights. Glossary A-IFRS Australian equivalents to International Financial Reporting Standards ASIC Australian Securities and Investments Commission ASX Australian Securities Exchange AUD / A$ Australian Dollars bbl(s) Blue barrel(s), oil barrel volume is 0.159 cubic metres bcf Billion cubic feet of natural gas boe Barrel of oil equivalent. The factor used to convert gas to oil equivalent is based upon an approximate energy value of 6,000 cubic feet per barrel and not price equivalence at the time boepd Barrel of oil equivalent per day bopd Barrel of oil per day inclusive of NGLs CNOOC China National Offshore Oil Corporation EBITDAX Earnings before interest, tax, depreciation, depletion and amortisation, and exploration expenses ESP Electrical submersible pump FID Final investment decision FPSO Floating production, storage and offloading vessel GST Goods and services tax JOA Joint operating agreement km Kilometres LIBOR London inter-bank offered rate LNG Liquified natural gas mmbbl/mmbo Million barrels of oil mmboe Million barrels of oil equivalent MMSCFD Million cubic feet of gas per day NDRC National Development and Reform Commission NGL(s) Natural gas liquid(s) OTCQB OTC Markets Group Venture Market ODP Overall Development Plan PEP Petroleum exploration permit PMP Petroleum mining permit Reserves Reserves as included in this report refers to both Proven and Probable reserves (2P). Proven and Probable reserves are reserves that analysis of geological and engineering data suggests are more likely than not to be recoverable – there is Horizon Oil Annual Report 2026 114
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NAME NO OF ORDINARY SHARES % OF ISSUED ORDS 18 Finclear Services Pty LImited 4,017,488 0.23 19 Ms Malaky Kazem 3,850,000 0.22 20 Mrs Maria Anna Dau and Mr Mark Kenneth Dau 3,705,000 0.21 Total 1,246,823,618 70.35 ISSUED SECURITIES Issued securities as at 13 August 2026: SECURITY NUMBER ON ISSUE NUMBER OF HOLDERS Ordinary fully paid shares1 1,774,478,592 6,314 Ordinary partly paid shares 1,500,000 1 Unlisted deferred STI rights 1,877,573 7 Unlisted Performance Rights 31,398,584 5 1 The Company’s ordinary fully shares are listed on the Australian Securities Exchange. SUBSTANTIAL HOLDERS Substantial holders in the Company are set out below: ORDINARY SECURITY NO, OF ORDINARY SHARES % OF ISSUED ORDS IMC Investments Ltd (an associate of Austral-Asia Energy Pty Ltd) 400,574,175 22.60 Samuel Terry Asset Management Pty Limited 314,232,423 17.70 Echelon Pacific Holdings Pty Limited 117,834,145 6.65 Total 832,640,743 46.95 VOTING RIGHTS Ordinary shares – fully paid Voting of members is governed by the Company’s Constitution. In summary, every member present in person or by proxy attorney or representative shall have one vote on a show of hands and one vote for each share on a poll. Ordinary shares – partly paid Voting of members is governed by the Company’s Constitution. In summary, every member present in person or by proxy attorney or representative shall have one vote on a show of hands and upon a poll, is entitled to one vote to the proportion of the total issue price then paid up. Deferred STI rights - unlisted No voting rights. Performance rights – unlisted No voting rights. Glossary A-IFRS Australian equivalents to International Financial Reporting Standards ASIC Australian Securities and Investments Commission ASX Australian Securities Exchange AUD / A$ Australian Dollars bbl(s) Blue barrel(s), oil barrel volume is 0.159 cubic metres bcf Billion cubic feet of natural gas boe Barrel of oil equivalent. The factor used to convert gas to oil equivalent is based upon an approximate energy value of 6,000 cubic feet per barrel and not price equivalence at the time boepd Barrel of oil equivalent per day bopd Barrel of oil per day inclusive of NGLs CNOOC China National Offshore Oil Corporation EBITDAX Earnings before interest, tax, depreciation, depletion and amortisation, and exploration expenses ESP Electrical submersible pump FID Final investment decision FPSO Floating production, storage and offloading vessel GST Goods and services tax JOA Joint operating agreement km Kilometres LIBOR London inter-bank offered rate LNG Liquified natural gas mmbbl/mmbo Million barrels of oil mmboe Million barrels of oil equivalent MMSCFD Million cubic feet of gas per day NDRC National Development and Reform Commission NGL(s) Natural gas liquid(s) OTCQB OTC Markets Group Venture Market ODP Overall Development Plan PEP Petroleum exploration permit PMP Petroleum mining permit Reserves Reserves as included in this report refers to both Proven and Probable reserves (2P). Proven and Probable reserves are reserves that analysis of geological and engineering data suggests are more likely than not to be recoverable – there is Horizon Oil Annual Report 2026 115
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at least a 50% probability that reserves recovered will exceed Proven and Probable reserves. Contingent Resources The Company’s technically recoverable resources (2C) for its discovered oil and gas fields are classified as contingent resources. These resources would be expected to be booked in reserves (Proven and Probable reserves) once commercialisation arrangements have been finalised. PSA Production Sharing Agreement SDA Supplemental Development Agreement SPE-PRMS Society of Petroleum Engineers – Petroleum Resources Management System Sq km Square kilometres tcf Trillion cubic feet of natural gas USD / US$ United States dollars WHP Wellhead platform WOU Workover unit 2D Seismic Seismic recorded in 2 dimensions 3D Seismic Seismic recorded in 3 dimensions HORIZON OIL LIMITED ABN 51 009 799 455 Board of Directors Bruce Clement (Chairman) Richard Beament (Chief Executive Officer) Catherine Costello Gregory Bittar (Alternate: Bruno Lorenzon) Nigel Burgess Peter Goode Company Secretary Vasilios (Vas) Margiankakos Assistant Company Secretary Kyle Keen Australian Registered Office (Principal place of business] Level 4, 360 Kent Street, SYDNEY NSW 2000 Telephone: +]612] 9332 5000 Facsimile: +[612] 9332 5050 Email: info@horizonoil.com.au Website: www.horizonoil.com.au Domicile and country of incorporation Australia Share Registrar Computershare Investor Services Pty Limited 6 Hope Street Ermington NSW 2115 Telephone: +[613) 9415 4000 Solicitors King & Wood Mallesons Level 30 Waterfront Place 1 Eagle Street BRISBANE QLD 4000 Auditor PwC One International Towers Sydney Watermans Quay, Barrangaroo SYDNEY NSW 2000 Stock Exchange Horizon Oil Limited shares are listed on the ASX (ASX code: HZN) and the US OTC Markets Group (OTCQB: HZNFF) Notice of annual general meeting The Annual General Meeting of Horizon will be held at: Cliftons, Level 13 60 Margaret Street SYDNEY NSW 2000 Time: 10.00am Date: 19 November 2026 Horizon Oil Annual Report 2026 116
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at least a 50% probability that reserves recovered will exceed Proven and Probable reserves. Contingent Resources The Company’s technically recoverable resources (2C) for its discovered oil and gas fields are classified as contingent resources. These resources would be expected to be booked in reserves (Proven and Probable reserves) once commercialisation arrangements have been finalised. PSA Production Sharing Agreement SDA Supplemental Development Agreement SPE-PRMS Society of Petroleum Engineers – Petroleum Resources Management System Sq km Square kilometres tcf Trillion cubic feet of natural gas USD / US$ United States dollars WHP Wellhead platform WOU Workover unit 2D Seismic Seismic recorded in 2 dimensions 3D Seismic Seismic recorded in 3 dimensions HORIZON OIL LIMITED ABN 51 009 799 455 Board of Directors Bruc e Clement (Chairman) Richard Beament (Chief Executive Officer) Catherine Costello Gregory Bittar (Alternate: Bruno Lorenzon) Nigel Burgess Peter Goode Company Secretary Vasilios (Vas) Margiankakos Assistant Company Secretary Kyle Keen Australian Registered Office (Principal place of business] Level 4, 360 Kent Street, SYDNEY NSW 2000 Telephone: Facsimile: +(612] 9332 5000 +[612] 9332 5050 Email: info@horizonoil.com.au Website: www.horizonoil.com.au Domicile and country of incorporation Australia Share Registrar Computershare Investor Services Pty Limited 6 Hope Street Ermington NSW 2115 Telephone: +[613) 9415 4000 Solicitors King & Wood Mallesons Level 30 Waterfront Place 1 Eagle Street BRISBANE QLD 4000 Auditor PwC One International Towers Sydney Watermans Quay, Barrangaroo SYDNEY NSW 2000 Stock Exchange Horizon Oil Limited shares are listed on the ASX (ASX code: HZN) and the US OTC Markets Group (OTCQB: HZNFF) Notice of annual general meeting The Annual General Meeting of Horizon will be held at: Cliftons, Level 13 60 Margaret Street SYDNEY NSW 2000 Time: 10.00am Date: 18 November 2026 Horizon Oil Annual Report 2026 117
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horizonoil.com.au Disclaimer: Statements contained in this report may be forward looking statements. Such statements relate to future events and expectations and as such involve known and unknown risks and uncertainties. Actual results, actions and developments may differ materially from those expressed or implied by these forward looking statements depending on a variety of factors. While every effort is made to provide accurate and complete information, Horizon accepts no responsibility for any loss, damage, cost or expense incurred by you as a result of any error, omission or misrepresentation in information in this report.