Horizon Offshore Extends Maturity Date of Loan Agreements

Horizon Offshore, Inc. (NasdaqNM: HOFF) successfully amended its two revolving credit facilities agented by Southwest Bank of Texas, N.A. (Southwest Bank) to extend the maturity date of the credit facilities to February 11, 2005. The Company will prepay $1.3 million on the domestic facility and secure the remaining $5.0 million outstanding under the facility with $2.5 million of cash. The remaining amounts outstanding under the domestic facility will be repaid with any domestic receivables collections in excess of $5.5 million and future collections on all foreign receivables will pay down the $12.7 million outstanding under its EXIM guaranteed facility.

The Company also announced that it continues to work with a prospective lender to refinance, through a term loan and revolving credit facility, all of the debt outstanding under its Southwest Bank revolving credit facilities and its revolving credit facility and term loan with The CIT Group/Equipment Financing, Inc. (CIT Group) maturing later in 2005. The Company is also continuing to work with its subordinated note holders to implement this proposed refinancing. Assuming that this refinancing is completed, the Company then intends to proceed with its previously announced equity recapitalization through equity offerings and/or consensual debt for equity exchanges with its subordinated note holders.

"We continue to work hard to refinance our maturing debt and accomplish our equity recapitalization," said Dick Sebastiao, Chief Restructuring Officer, "and the extension of the maturing debt announced today shows that all interested parties are working together to achieve a reasonable result. We believe that the extension will provide us with the additional time that we need to accomplish our near term goal of refinancing our maturing debt."