Dr. David Winter reports

HORIZON PETROLEUM LTD. ANNOUNCES PROPOSED $2,000,000 SECURED GRID PROMISSORY NOTE AND CLOSE OF ITS SHARES FOR DEBT SETTLEMENT

Horizon Petroleum Ltd. intends to enter into a secured grid promissory note with Wilco Investments Ltd., a company controlled by Trevor Williams who is a director of the company, in the aggregate principal amount of up to $2-million.

The proceeds will be used to make deposits on three generators and on production facilities. The generators will have a combined generating capacity of three megawatts. This equipment is Horizon's next investment in its gas to power strategy for its Lachowice natural gas development in Poland.

The promissory note will bear interest from the applicable issuance date at 12 per cent per annum. The promissory note and accrued interest will be due on Dec. 31, 2026. The maturity date may be extended by mutual agreement between the parties. The promissory note may be prepaid in whole or in part at any time without penalty. The promissory note will be immediately due and payable upon completion by the company of a financing of equity or debt of $5-million or more. The promissory note will be secured by Horizon's electrical generating equipment in Poland.

The closing date is anticipated to be Oct. 22, 2026.

Entering into the promissory note and the advance of funds thereunder are subject to the satisfaction of customary conditions, including the approval of the TSX Venture Exchange.

As Mr. Williams is a director of the company, the promissory note will constitute a related party transaction pursuant to Multilateral Instrument 61-101 -- Protection of Minority Security Holders in Special Transactions. The company intends to rely on the exemption from the formal valuation requirement pursuant to Section 5.5(b) of MI 61-101 as the company does not have securities listed on a specified market, and on the exemption from the minority shareholder approval requirement pursuant to Section 5.7(1)(a) of MI 61-101 as the fair market value of the promissory note will not exceed 25 per cent of the company's market capitalization.

In addition, the company announces that it has completed an agreement to settle a total of $524,000 of the company's debt with certain arm's length and non-arm's-length parties. The debt payable to directors and officers of the company who are insiders (as such term is defined under the policies of the TSX-V) is an aggregate of $465,000 and the company will settle the same by issuing to such parties 2,657,143 common shares at a deemed price of 17.5 cents per common share. The debt payable to arm's-length service providers is an aggregate of $59,000 and the company will settle the same by issuing to such parties 337,143 common shares at a deemed price of 17.5 cents per common share.

The shares for debt settlement was approved by disinterested shareholders at the shareholder meeting held on July 28, 2026. All securities issued in connection with the shares for debt settlement will be subject to a statutory four-month hold period in accordance with applicable securities legislation.

The company has received final approval for the shares for debt settlement from the TSX-V.

The company relied on exemptions from the formal valuation and minority approval requirements of sections 5.5(b) and 5.7(1)(a) of MI 61-101 in respect of such insider participation in the shares for debt settlement, based on a determination that fair market value of the participation by insiders did not exceed 25 per cent of the market capitalization of Horizon, as determined in accordance with MI 61-101.

About Horizon Petroleum Ltd.

Calgary-based Horizon Petroleum is focused on the appraisal and development of natural gas resources and clean energy opportunities in Europe, with the objective of contributing to European energy independence and security. Horizon is advancing its Polish natural gas assets through a technically focused, phased development strategy designed to unlock their commercial potential. Horizon's management team and board of directors comprise oil and gas, business, and finance professionals with significant international experience.

We seek Safe Harbor.