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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                            ------------------------

                                   FORM 10-Q

     [X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                       FOR THE PERIOD ENDED JUNE 30, 1999

                                       OR

     [ ]    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                        COMMISSION FILE NUMBER: 0-23653

                            ------------------------

                             HORIZON OFFSHORE, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

              DELAWARE                            76-0487309
   (STATE OR OTHER JURISDICTION OF             (I.R.S. EMPLOYER
   INCORPORATION OR ORGANIZATION)             IDENTIFICATION NO.)

                      2500 CITYWEST BOULEVARD, SUITE 2200
                              HOUSTON, TEXAS 77042
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
                                   (ZIP CODE)

                                 (713) 361-2600
              (REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.   YES [X]   NO [ ]

     The number of shares of the registrant's Common Stock outstanding as of
August 12, 1999 was 18,800,980.

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<PAGE>
                        PART I -- FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                    HORIZON OFFSHORE, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)


                                            JUNE 30,        DECEMBER 31,
                                              1999              1998
                                           -----------      ------------
                                           (UNAUDITED)

                 ASSETS
CURRENT ASSETS:
     Cash and cash equivalents..........    $   7,641         $  9,649
     Accounts receivable --
          Contract receivables..........       16,651           25,549
          Costs in excess of billings...       14,183            9,546
          Related parties...............          136               82
     Income taxes receivable............          481              481
     Other current assets...............          618              642
                                           -----------      ------------
          Total current assets..........       39,710           45,949
PROPERTY AND EQUIPMENT, net.............      158,822          145,680
OTHER ASSETS............................        6,085            2,040
                                           -----------      ------------
                                            $ 204,617         $193,669
                                           ===========      ============
  LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
     Accounts payable...................    $   3,206         $  7,654
     Accrued liabilities................        3,582            5,086
     Accrued job costs..................       10,162           10,334
     Billings in excess of costs........        1,578            2,608
     Current maturities of long-term
      debt..............................        9,694            7,606
                                           -----------      ------------
          Total current liabilities.....       28,222           33,288
LONG-TERM DEBT, net of current
  maturities............................       74,722           62,268
DUE TO RELATED PARTIES..................           32               20
DEFERRED INCOME TAXES...................        4,500            3,633
                                           -----------      ------------
          Total liabilities.............      107,476           99,209
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
     Preferred stock, $1 par value,
      5,000,000 shares authorized,
       none issued and outstanding......           --               --
     Common stock, $1 par value,
      35,000,000 shares authorized,
       19,826,480 shares issued at June
       30, 1999 and December 31, 1998...        9,119            9,119
     Additional paid-in capital.........       87,891           87,767
     Retained earnings..................        6,857            5,156
     Treasury stock, 1,025,500 shares at
      June 30, 1999 and 1,155,000 shares
      at December 31, 1998..............       (6,726)          (7,582)
                                           -----------      ------------
          Total stockholders' equity....       97,141           94,460
                                           -----------      ------------
                                            $ 204,617         $193,669
                                           ===========      ============

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       2
<PAGE>
                    HORIZON OFFSHORE, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
                                             THREE MONTHS ENDED               SIX MONTHS ENDED
                                                  JUNE 30,                        JUNE 30,
                                       ------------------------------  ------------------------------
                                            1999            1998            1999            1998
                                       --------------  --------------  --------------  --------------
<S>                                    <C>             <C>             <C>             <C>
CONTRACT REVENUES....................  $       23,437  $       34,311  $       35,793  $       52,922
COST OF CONTRACT REVENUES............          16,603          25,520          26,693          38,747
                                       --------------  --------------  --------------  --------------
     Gross profit....................           6,834           8,791           9,100          14,175
SELLING, GENERAL AND ADMINISTRATIVE
  EXPENSES...........................           2,129           1,803           4,470           3,742
                                       --------------  --------------  --------------  --------------
     Operating income................           4,705           6,988           4,630          10,433
OTHER INCOME (EXPENSE):
     Interest expense................          (1,508)           (380)         (2,467)         (1,214)
     Interest income and other.......             302              70             405             103
                                       --------------  --------------  --------------  --------------
NET INCOME BEFORE INCOME TAXES.......           3,499           6,678           2,568           9,322
PROVISION FOR INCOME TAX.............           1,194           1,879             867           1,879
                                       --------------  --------------  --------------  --------------
NET INCOME...........................  $        2,305  $        4,799  $        1,701  $        7,443
                                       ==============  ==============  ==============  ==============
NET INCOME PER SHARE -- BASIC AND
  DILUTED............................  $         0.12  $         0.24  $         0.09  $         0.44
                                       ==============  ==============  ==============  ==============
SHARES USED IN COMPUTING NET INCOME
  PER SHARE --
  BASIC AND DILUTED..................      18,870,580      19,608,607      18,768,758      16,935,596
</TABLE>

  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       3
<PAGE>
                    HORIZON OFFSHORE, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)
                (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)


                                          SIX MONTHS ENDED
                                              JUNE 30,
                                       ----------------------
                                          1999        1998
                                       ----------  ----------
CASH FLOW FROM OPERATING ACTIVITIES:
  Net income (loss)..................  $    1,701  $    7,443
  Adjustments to reconcile net income
     (loss) to net cash provided by
     operating activities --
     Depreciation and amortization...       3,361       1,515
     Deferred income taxes...........         867       1,102
     Changes in operating assets and
      liabilities --
       Accounts receivable...........       8,844      (9,491)
       Costs in excess of billings...      (4,637)    (17,256)
       Billings in excess of costs...      (1,030)       (408)
       Other current assets..........          24        (458)
       Accounts payable..............      (4,448)       (305)
       Accrued liabilities...........      (1,504)      9,398
       Accrued job costs.............        (172)     12,534
       Accrued interest..............          --        (673)
       Due to related parties........          12          --
       Income taxes payable..........          --         511
                                       ----------  ----------
          Net cash provided by
             operating activities....       3,018       4,728
CASH FLOW FROM INVESTING ACTIVITIES:
  Purchases and additions to
     equipment.......................     (15,240)    (55,768)
  Drydock costs......................      (4,060)       (601)
  Purchase of other assets...........        (250)         96
                                       ----------  ----------
          Net cash used in investing
             activities..............     (19,550)    (56,273)
CASH FLOW FROM FINANCING ACTIVITIES:
  Borrowings under notes payable and
     long-term debt..................      18,000      13,954
  Loan fees..........................          --        (792)
  Principal payments on long-term
     debt............................      (4,258)    (24,232)
  Issuance of common stock...........          --         950
  Initial public offering proceeds,
     net.............................          --      68,814
  Purchase of treasury stock.........         (18)         --
                                       ----------  ----------
          Net cash provided by
             financing activities....      14,524      58,694
                                       ----------  ----------
NET INCREASE (DECREASE) IN CASH AND
  CASH EQUIVALENTS...................      (2,008)      7,149
CASH AND CASH EQUIVALENTS AT
  BEGINNING OF PERIOD................       9,649       2,846
                                       ----------  ----------
CASH AND CASH EQUIVALENTS AT END OF
  PERIOD.............................  $    7,641  $    9,995
                                       ==========  ==========
SUPPLEMENTAL DISCLOSURES:
  Cash paid for interest.............  $    2,967  $    1,914
  Cash paid for income taxes.........  $       --  $      265
  Non-cash investing and financing
     activities:
     Purchase and additions to
      equipment with the issuance of
      notes payable..................  $       --  $   24,097
     Purchase and additions to
      equipment with the issuance of
      treasury stock.................  $      998  $       --


  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                       4

<PAGE>
                    HORIZON OFFSHORE, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

     The consolidated interim financial statements included herein have been
prepared by Horizon Offshore, Inc. (a Delaware corporation) and its subsidiaries
(Horizon or the Company), and are unaudited, except for the balance sheet at
December 31, 1998, which has been prepared from the audited financial
statements. In the opinion of management, the unaudited consolidated interim
financial statements include all adjustments necessary for a fair presentation
of the financial position as of June 30, 1999, the statements of operations for
each of the three and six month periods ended June 30, 1999 and 1998, and the
statements of cash flows for the six month periods ended June 30, 1999 and 1998.
Although management believes the unaudited interim related disclosures in these
consolidated interim financial statements are adequate to make the information
presented not misleading, certain information and footnote disclosures normally
included in annual audited financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted pursuant
to the rules of the Securities and Exchange Commission. The results of
operations for the six months ended June 30, 1999 are not necessarily indicative
of the result to be expected for the entire year ending December 31, 1999. The
consolidated interim financial statements included herein should be read in
conjunction with the audited financial statements and notes thereto included in
the Company's 1998 Annual Report on Form 10-K.

  ORGANIZATION

     Horizon provides offshore construction services to the oil and gas
industry. These services generally consist of laying and burying marine
pipelines for the transportation of oil and gas, and installing and salvaging
production platforms and other marine structures. Work is performed primarily on
a fixed-price or day-rate basis or a combination of these.

     In April 1998, the Company completed its initial public offering (the
Offering) of 5,750,000 shares of its common stock at $13.00 per share and
received $68.6 million in net proceeds. The Company used the net proceeds of the
Offering to repay $23.8 million of indebtedness and to acquire the Stephaniturm,
a 230-foot diving support vessel, for $18.3 million. The remaining Offering
proceeds were used to upgrade and expand the Company's fleet and operating
capabilities.

  INTEREST CAPITALIZATION

     Interest is capitalized on the average amount of accumulated expenditures
for equipment that is undergoing major modification and refurbishment prior to
being placed into service. Interest is capitalized using an effective rate based
on related debt until the equipment is placed into service. Interest expense for
the three and six month periods ended June 30, 1999 is net of $103,000 and
$667,000 of capitalized interest, respectively. Interest capitalized during the
three and six month periods ended June 30, 1998 was $145,000 and $293,000,
respectively.

                                       5
<PAGE>
                    HORIZON OFFSHORE, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

2.  PROPERTY AND EQUIPMENT:

     Property and equipment consists of the following (in thousands):


                                        JUNE 30,    DECEMBER 31,
                                          1999          1998
                                       ----------   ------------
Barges, boats and related
  equipment..........................  $  157,496     $141,436
Land and buildings...................       7,295        7,084
Machinery and equipment..............         245          245
Office furniture and equipment.......       1,215        1,121
Leasehold improvements...............       1,330        1,330
                                       ----------   ------------
                                          167,581      151,216
Less -- Accumulated depreciation.....      (8,759)      (5,536)
                                       ----------   ------------
Property and equipment, net..........  $  158,822     $145,680
                                       ==========   ============


     During the six months ended June 30, 1999, the Company spent $16.2 million
for vessel acquisitions, improvements and refurbishments to its fleet and for
improvements to its marine base in Port Arthur, Texas.

     In April 1999, the Company purchased the Brazos Horizon, a pipelay/pipebury
barge for $5.8 million, which consisted of $4.8 million in cash and 133,300
shares of the Company's common stock with a fair value of $1.0 million. Treasury
stock was re-issued in this transaction.

1.  STOCKHOLDERS' EQUITY

  EARNINGS PER SHARE

     Earnings per share data for all periods presented has been computed
pursuant to Statement of Financial Accounting Standards (SFAS) No. 128,
"Earnings Per Share" that requires a presentation of basic earnings per share
(basic EPS) and diluted earnings per share (diluted EPS). Basic EPS excludes
dilution and is determined by dividing income available to common stockholders
by the weighted average number of common shares outstanding during the period.
Diluted EPS reflects the potential dilution that could occur if securities and
other contracts to issue common stock were exercised or converted into common
stock. No options to purchase common stock were granted prior to April 1998. The
Company had outstanding options covering an aggregate of 1.2 million shares of
common stock and 0.1 million shares were exercisable as of June 30, 1999. There
are no material differences in basic EPS and diluted EPS for all periods
presented. Excluded from the EPS calculation is 0.7 million options which are
antidilutive.

  TREASURY STOCK

     In July 1998, the board of directors approved the repurchase of up to $10
million of the Company's outstanding common stock. Shares have been purchased
from time to time, subject to market conditions, in the open market or in
privately negotiated transactions. As of June 30, 1999, the Company had
repurchased 1,158,800 shares of common stock for a total cost of $7.6 million,
and the Company re-issued 133,300 shares of treasury stock in connection with
the purchase of the Brazos Horizon. As of June 30, 1999, the Company's treasury
stock consisted of 1,025,500 shares at a cost of $6.7 million. The Company
records inventory of treasury stock under the average cost basis.

4.  RELATED PARTY TRANSACTIONS

     The Company has chartered the Stephaniturm to Det Sondenfjelds-Norske
Dampskibsselskab ASA (DSND) until December 31, 1999, with a cancellation
provision at September 30, 1999, upon payment by DSND of a $250,000 cancellation
fee. The Company recognized $1.5 million in revenues and $0.9 million in gross
profit during the six months ended June 30, 1999, related to this charter. The
Company recognized

                                       6
<PAGE>
                    HORIZON OFFSHORE, INC. AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

$1.8 million in revenues and $1.5 million in gross profit related to this
charter for the six months ended June 30, 1998.

     In August 1998, the Company entered into a master services agreement with
Odyssea Marine, Inc. (Odyssea), an entity wholly-owned by Westgate
International, L.P., and a subsidiary of Elliott Associates, L.P., the Company's
principal stockholders (Principal Stockholders), to charter certain marine
vessels from Odyssea. As of June 30, 1999, the Company owed Odyssea $0.1 million
as a result of services performed under this agreement, compared to $1.1 million
at December 31, 1998. During the six months ended June 30, 1999, Odyssea billed
Horizon $1.7 million and Horizon paid Odyssea $2.7 million for services rendered
under the agreement.

     In August 1998, the Company entered into an agreement with Prime Natural
Resources, Inc. (Prime), an entity that is majority-owned by a subsidiary of one
of the Principal Stockholders, to perform marine construction work. Prime awards
contracts to Horizon on the basis of a competitive bid process. As of June 30,
1999, the outstanding receivable balance from Prime was $1.8 million, compared
to $1.3 million at December 31, 1998. The Company billed Prime $2.7 million for
services rendered under the agreement during the first half of 1999.

     In the opinion of management of the Company, all of the transactions
described above were effected on terms at least as favorable to the Company as
those which could have been obtained from unaffiliated third parties.

                                       7

<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     THE FOLLOWING DISCUSSION AND ANALYSIS SHOULD BE READ IN CONJUNCTION WITH
THE COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS AND NOTES THERETO AND THE
DISCUSSION UNDER "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS" INCLUDED IN THE COMPANY'S 1998 ANNUAL REPORT ON FORM
10-K. THE FOLLOWING INFORMATION CONTAINS FORWARD-LOOKING STATEMENTS, WHICH ARE
SUBJECT TO RISKS AND UNCERTAINTIES. SHOULD ONE OR MORE OF THESE RISKS OR
UNCERTAINTIES MATERIALIZE, ACTUAL RESULTS MAY DIFFER FROM THOSE EXPRESSED OR
IMPLIED BY THE FORWARD-LOOKING STATEMENTS.

GENERAL

     Horizon provides marine construction services to the oil and gas industry
primarily in the Gulf of Mexico. The Company's marine fleet is used to perform a
wide range of marine construction activities, including installation of marine
pipelines to transport oil and gas from newly installed production platforms and
other subsea production systems, and the installation and abandonment of
production platforms.

     The Company's management team has aggressively expanded the Company's
operations. Horizon currently has a fleet of eleven vessels, ten of which were
operational during the second quarter. These vessels are capable of providing a
full range of pipeline and derrick services in varying water depths, and
included five pipelay/pipebury barges, a dedicated pipebury barge, two derrick
barges and two diving support vessels. In April 1999, the Company purchased the
Brazos Horizon, a pipelay/pipebury barge. The Company's expanded fleet competes
in the Gulf for substantially all pipeline installation projects in water depths
up to 850 feet. The Company also competes for projects in selected international
markets. Horizon has two derrick barges with lift capacities up to 550 and 800
tons deployed.

     The demand for offshore construction services in the Gulf depends largely
on the condition of the oil and gas industry and, in particular, the level of
capital expenditures by oil and gas companies for developmental construction.
These expenditures are influenced by prevailing oil and gas prices, expectations
about future demand and prices, the cost of exploring for, producing and
developing oil and gas reserves, the discovery rates of new oil and gas
reserves, sale and expiration dates of offshore leases in the United States and
abroad, political and economic conditions, governmental regulations and the
availability and cost of capital. Historically, oil and gas prices and the level
of exploration and development activity have fluctuated substantially, impacting
the demand for pipeline and marine construction services.

     Factors affecting the Company's profitability include competition,
equipment and labor productivity, contract estimating, weather conditions and
the other risks inherent in marine construction. The marine construction
industry in the Gulf is highly seasonal because the most favorable weather
conditions for the Company's services generally occur during the second and
third quarters of the calendar year. Full year results are not a direct multiple
of any quarter or combination of quarters because of this seasonality.

RESULTS OF OPERATIONS

     The discussion below describes the Company's results of operations.
Revenues and profits declined in the first half of 1999 compared to 1998 as
offshore construction activity in the Gulf decreased primarily in response to
lower oil and gas prices in late 1998 and early 1999. Reduced demand for
construction and lower margins bid on jobs impacted results for the first six
months of 1999.

     With recent improvements in energy prices, some oil and gas companies
active in the Gulf have substantially increased their capital budgets for the
remainder of 1999. Horizon intends to focus on its established relationships
with many of these companies to capitalize on any increased construction
spending. Horizon began this year with a backlog of $19.0 million and ended the
second quarter of 1999 with a backlog of $33.0 million. The Company believes
this substantial increase in backlog is a result of the historical peak
construction season in the Gulf and the improvement in energy prices.

     The Company's vessel acquisitions have expanded its operating capabilities
and increased its operating cost structure. The aggregate amount of selling,
general and administrative expenses has increased to support this growth. During
the first six months, the Company deployed two additional vessels, the Brazos
Horizon, a pipelay/pipebury barge, and the Pacific Horizon, an 800-ton derrick
barge. The Company's fleet

                                       8
<PAGE>
expansion, along with reduced offshore construction demand, resulted in a
decrease in fleet utilization during the first six months of 1999 compared to
last year. The lower utilization for the pipelay vessels was at least partially
offset by increased utilization of the Company's derrick vessels. The Pacific
Horizon, an 800-ton derrick barge, successfully completed nine projects in the
second quarter.

     Horizon has continued its expansion efforts into selected international
markets during the second quarter of 1999. An Ecuadorian oil and gas company has
signed a letter of intent to award Horizon a contract to transport and install a
production platform in Ecuador. This demonstrates the Company's commitment to
international expansion in Latin and South America. The Company is also
continuing its business development efforts in West Africa.

     A weakness in energy prices or a prolonged decline in offshore drilling and
exploration could adversely affect the Company's future revenues and
profitability. In late 1998 and the first half of 1999, the Company experienced
a decline in demand for its marine construction services in the Gulf as oil and
gas companies reduced their levels of capital expenditures. The Company expects
reduced demand for its services to impact its results of operations for the
remainder of 1999.

QUARTER ENDED JUNE 30, 1999 COMPARED TO THE QUARTER ENDED JUNE 30, 1998

     CONTRACT REVENUES.  Contract revenues were $23.4 million for the quarter
ended June 30, 1999, compared to $34.3 million for the quarter ended June 30,
1998. Revenues for the second quarter of 1999 declined as a result of reduced
demand for offshore construction in the Gulf of Mexico.

     GROSS PROFIT.  Gross profit was $6.8 million (29.2% of contract revenues)
for the quarter ended June 30, 1999, compared to a gross profit of $8.8 million
(25.6% of contract revenues) for the quarter ended June 30, 1998. Lower margins
bid on jobs and the Company's increased operating cost structure associated with
its fleet expansion has resulted in lower gross profit. However, the increase in
gross profit as a percent of contract revenues was attributable to a major
project, which consists of laying and burying 80 miles of 20-inch pipeline to a
water depth of 365 feet in the Gulf of Mexico.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.  Selling, general and
administrative expenses increased to $2.1 million (9.1% of contract revenues)
for the three months ended June 30, 1999 from $1.8 million (5.3% of contract
revenues) for the same period in 1998, primarily due to the addition of
personnel and other expenses associated with the growth of the Company and the
fleet expansion. The decrease in revenues and the increase in the operating cost
structure caused selling, general and administrative expenses to increase
substantially as a percent of contract revenues.

     INTEREST EXPENSE.  Interest expense was $1.5 million for the three months
ended June 30, 1999, net of $0.1 million interest capitalized, and $0.4 million
for the same period last year, net of $0.1 million interest capitalized. The
Company's total outstanding debt was $84.4 million at June 30, 1999 compared to
$53.3 million at June 30, 1998. The outstanding debt increased significantly as
a result of the vessel acquisitions and improvements made to expand the
capabilities of the Company's fleet.

     OTHER INCOME.  Included in other income is interest income on cash
investments for the three months ended June 30, 1999 and the three months ended
June 30, 1998 is $144,000 and $70,000 respectively.

     INCOME TAXES.  The Company uses the liability method of accounting for
income taxes. For the quarter ended June 30, 1999, the Company recorded a
federal income tax provision of $1.2 million, at a net effective rate of 34.1%
on a pre-tax income of $3.5 million. For the quarter ended June 30, 1998, the
Company recorded a federal income tax provision of $1.9 million, at a net
effective rate of 28.1% due to losses carried forward from previous years. A
valuation allowance was previously established to offset the Company's net
deferred tax assets, including those related to loss carryforwards, to the
extent they were not realizable through the sale of appreciated assets at June
30, 1998.

     NET INCOME.  Net income was $2.3 million, or $0.12 per share (computed
based upon 18,870,580 shares), for the quarter ended June 30, 1999, compared to
a net income for the quarter ended June 30, 1998 of $4.8 million, or $0.24 per
share (computed based upon 19,608,607 shares). The decrease in net income is due
to the decline in revenues and gross profit.

                                       9
<PAGE>
SIX MONTHS ENDED JUNE 30, 1999 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 1998

     CONTRACT REVENUES.  Contract revenues were $35.8 million for the six months
ended June 30, 1999, compared to $52.9 million for the six months ended June 30,
1998. The Company's results of operations for the first half of 1999 reflect the
reduced demand for offshore construction in the Gulf of Mexico earlier in the
year.

     GROSS PROFIT.  Gross profit was $9.1 million (25.4% of contract revenues)
for the first six months of 1999, compared to a gross profit of $14.2 million
(26.8% of contract revenues) for the same period of 1998. The impact of reduced
demand for marine construction in the Gulf and lower margins bid on jobs
resulted in decreased gross profit. The Company's increased operating cost
structure associated with its fleet expansion has also decreased gross profit.

     SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.  Selling, general and
administrative expenses increased to $4.5 million (12.5% of contract revenues)
for the six months ended June 30, 1999 from $3.7 million (7.1% of contract
revenues) for the same period of 1998 primarily due to the addition of personnel
and other expenses associated with the growth of the Company. The decrease in
revenues and the increase in the operating cost structure caused selling,
general and administrative expenses to increase substantially as a percent of
contract revenues.

     INTEREST EXPENSE.  Interest expense for the six months ended June 30, 1999
was $2.5 million net of $0.7 million of interest capitalized. Interest expense
was $1.2 million for the six months ended June 30, 1998, net of $0.3 million of
interest capitalized. Interest expense increased during the first six months of
1999 due to the Company's debt borrowings for vessel acquisitions and
improvements made to expand the Company's fleet and improvements to the marine
base in Port Arthur, Texas.

     OTHER INCOME.  Included in other income is interest income on cash
investments for the six months ended June 30, 1999 and the six months ended June
30, 1998 is $233,000 and $103,000 respectively.

     INCOME TAXES.  The Company uses the liability method of accounting for
income taxes. For the six months ended June 30, 1999, the Company recorded a
federal income tax provision of $0.9 million, at a net effective rate of 33.8%
on pre-tax income of $2.6 million. For the same period last year, the Company
recorded a federal income tax provision of $1.9 million, at a net effective rate
of 20.2% on pre-tax income of $9.3 million. Prior to 1998, a valuation allowance
was established to offset the Company's net deferred tax assets, including those
related to loss carryforwards, to the extent they were not realizable through
the sale of appreciated assets. The Company utilized net operating loss
carryforwards that partially offset income taxes in the first six months of
1998.

     NET INCOME.  Net income was $1.7 million, or $0.09 per share (computed
based on 18,768,758 shares), for the six months ended June 30, 1999, compared to
net income for the six months ended June 30, 1998 of $7.4 million, or $0.44 per
share (computed based on 16,935,596 shares). The decrease in net income is due
to the decline in revenues and gross profit and the increase in operating
expenses.

LIQUIDITY AND CAPITAL RESOURCES

     In December 1998, Horizon entered into a loan agreement with The CIT Group
providing for a $60 million term loan (the CIT Term Loan) at a rate of LIBOR
plus 2.65%. Initially, the Company borrowed $50 million in December 1998, and
borrowed an additional $5 million in March 1999 upon the completion of the
Pacific Horizon. In May 1999, the terms of this loan were amended to increase
the amount that may be borrowed to $73.8 million and the Company borrowed an
additional $13.8 million. The outstanding balance on the CIT Term Loan at June
30, 1999 was $65.7 million. The CIT Term Loan provides for additional borrowings
of $5 million upon deployment of the Phoenix Horizon. The first advance of $50
million under the CIT Term Loan is due in 84 monthly principal installments of
$463,000, the second advance of $5 million is due in 84 monthly principal
installments of $46,000, and the third advance of $13.8 million is due in 84
monthly principal installments of $128,000. The remaining principal balance is
due at the end of 84 months. No borrowings were outstanding under the $30
million revolving note payable to Den norske Bank (the DNB Revolver) at June 30,
1999.

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<PAGE>
     In 1997, one of the Principal Stockholders issued letters of credit and
provided guarantees to secure Horizon's notes payable to two foreign marine
companies pursuant to a settlement agreement. During 1998, Den norske Bank
issued two letters of credit on behalf of the Company to secure any obligation
paid by the Principal Stockholder under their letters of credit. These letters
of credit are deducted from the Company's borrowing base calculation under the
DNB Revolver.

     Both the CIT Term Loan and the DNB Revolver require that certain conditions
be met in order for the Company to obtain advances under the loans. These loans
are secured by substantially all assets of the Company, including mortgages on
all vessels owned by the Company, as well as accounts receivable. Both loan
facilities require the Company to maintain certain financial ratios and contain
certain covenants that limit the Company's ability to incur additional
indebtedness, pay dividends, create certain liens, sell assets and make capital
expenditures. Horizon was in compliance with all loan covenants as of June 30,
1999.

     In July 1998, the board of directors approved the repurchase of up to $10
million of the Company's outstanding common stock. As of June 30, 1999, the
Company had repurchased 1,158,800 shares of common stock for a total cost of
$7.6 million through borrowings provided by a wholly-owned subsidiary of one of
the Principal Stockholders. The $7.6 million was repaid from proceeds of the CIT
Term Loan in December 1998. The Company purchased 3,800 shares of common stock
during the first quarter of 1999 with cash provided by operations. In April
1999, the Company re-issued 133,300 shares of treasury stock in connection with
the purchase of the Brazos Horizon. The Company records the inventory of
treasury stock under the average cost basis.

     Horizon had working capital of $11.5 million at June 30, 1999, compared to
working capital of $12.7 million at December 31, 1998. The second quarter
decline in working capital was primarily due to an increase in the current
maturities of long-term debt.

     Cash provided by operations was $3.0 million for the six months ended June
30, 1999, compared to $4.7 million for the six months ended June 30, 1998. The
Company has used borrowings to fund capital expenditures. Cash used for capital
expenditures during the six months ended June 30, 1999 totaled $15.3 million,
compared to $55.8 million for the six months ended June 30, 1998. Principal
payments on long-term debt were $4.3 million and $24.2 million during the first
half of 1999 and 1998, respectively.

     Planned capital expenditures for the remainder of 1999 are estimated to
total approximately $4.5 million, which include expenditures to complete
improvements to the Company's existing fleet. Management believes that cash
generated from operations, together with available borrowings under its loan
facilities, will be sufficient to fund the Company's currently planned capital
projects and working capital requirements for 1999. The Company's strategy,
however, is to make other acquisitions to expand its operating capabilities and
expand into selected international markets. To the extent the Company is
successful in identifying acquisition opportunities, it most likely will require
additional equity or debt financing depending on the size of any transaction.

  YEAR 2000

     The Company has implemented a Year 2000 project plan to identify and assess
its risks associated with Year 2000 issues. Under the plan, the Company assessed
its major information and computing systems and has updated or replaced
applications that were not Year 2000 compliant. The Company has also contacted
its key vendors and customers to assess their efforts and progress with Year
2000 issues. The Company does not anticipate any material effects on its
business, operations or financial condition. Despite efforts to address Year
2000 issues in advance, there can be no assurance that the Company will not
experience unanticipated disruption, negative consequences or costs caused by
undetected errors in the technology used in its internal systems.

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<PAGE>
                          PART II -- OTHER INFORMATION

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

     On April 16, 1999, the Company re-issued 133,300 shares of treasury stock
to Terry Offshore, L.L.C. in partial consideration of the purchase of a pipelay
barge in reliance on Sections 4(2) and 4(6) under the Securities Act of 1933, as
amended, and the rules promulgated thereunder.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Not applicable

     The Company was not engaged in any transactions requiring disclosure at
June 30, 1999.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     (a)  The Annual Meeting of Stockholders of the Company was held on May 6,
          1999 (The "Annual Meeting").

     (b)  At the Annual Meeting, Gunnar Hirsti was re-elected as a director of
          the Company to serve until the annual meeting of stockholders for the
          year 2002. In addition to the director elected at the Annual Meeting,
          the terms of Jonathan D. Pollock, Bill J. Lam, James Devine and Edward
          L. Moses, Jr. continued after the Annual Meeting.

ITEM 5.  OTHER INFORMATION

Forward-Looking Statements

     In addition to historical information, Management's Discussion and Analysis
of Financial Condition and Results of Operations includes certain
forward-looking statements regarding events and financial trends that may affect
the Company's future operating results and financial position. Such
forward-looking statements are subject to uncertainties that could cause the
Company's actual results to differ materially from such statements. Such
uncertainties include but are not limited to: industry conditions and
volatility; prices of oil and gas; the Company's ability to obtain and the
timing of new projects, and changes in competitive factors, including the level
of capital expenditures by oil and gas companies due to fluctuations in the
price of oil and gas; risks of growth strategy, including the risks of rapid
growth; operating hazards, including the unpredictable effect of natural
occurrences on operations and the significant possibility of accidents resulting
in personal injury and property damage; seasonality of the offshore construction
industry in the Gulf; the Company's ability to attract and retain skilled
workers; the need for additional financing; the Company's lack of operating
history; contract bidding risks; percentage-of-completion accounting; continued
active participation of the Company's executive management and key personnel;
the effect on the Company's performance of regulatory programs and environmental
matters; risks involved in the Company's operations expansion into international
offshore oil and gas producing areas; and risks involved in joint venture
operations, including difficulty in resolving disputes with present partners or
reaching agreements with future partners. These and other uncertainties related
to the business are described in detail under the heading "Risk Factors" in
the Company's 1998 Annual Report on Form 10-K. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of
the date hereof. The Company undertakes no obligation to update any of its
forward-looking statements for any reason.

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<PAGE>
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

     (a)  Exhibits

      3.1  Amended and Restated Certificate of Incorporation of the Company (1)

      3.2  Bylaws of the Company (1)

     10.1  Amended and Restated Credit Agreement dated May 25, 1999 among
           Horizon Vessels, Inc., Horizon Offshore Contractors, Inc., The CIT
           Group/Equipment Financing, Inc., as agent, and the other lenders
           specified therein. (2)

     10.2  Termination Agreement dated July 19, 1999 among Det
           Sondenfjelds-Norske Dampskibsselskab ASA and the Company (2)

     27.1  Financial Data Schedule (2)
------------

1 Incorporated by reference to the Company's Registration Statement on Form S-1
  (Registration Statement No. 333-43965).

2 Filed herewith

     (b)  Reports on Form 8-K:

     None.

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<PAGE>
                                   SIGNATURE

     PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.

                                          HORIZON OFFSHORE, INC.

                                          By: /s/      DAVID W. SHARP
                                                       DAVID W. SHARP
                                                EXECUTIVE VICE PRESIDENT AND
                                                  CHIEF FINANCIAL OFFICER

Date:  August 12, 1999

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