oAs filed with
the Securities and Exchange Commission on Sept. 16, 2008  UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549   FORM 20-F    £ REGISTRATION STATEMENT PURSUANT TO
SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934  OR  S ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the fiscal year ended February
29, 2008.  OR  £ TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  OR  £ SHELL COMPANY REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  Date of event requiring this shell
company report ________  For the transition period from
________ to ________  Commission file number ________   HORIZON INDUSTRIES, LTD. (Exact name of registrant as specified in
its charter)  British Columbia, Canada (Jurisdiction of incorporation or
organization)  Suite 1710-1040 West Georgia Street, Box 83,
Vancouver, BC Canada V6E 4H1 (Address of principal executive offices)    SECURITIES
REGISTERED OR TO BE REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:  NONE  SECURITIES REGISTERED PURSUANT TO SECTION
12(G) OF THE ACT:  TITLE OF CLASS: COMMON STOCK WITHOUT PAR VALUE  SECURITIES FOR WHICH THERE IS A REPORTING
OBLIGATION PURSUANT TO SECTION 15(D) OF THE ACT:  NONE  Indicate the number of outstanding shares
of the issuer's classes of capital or common stock as of the close of the period
covered by the annual report -25,088,800 as of February 29,2008.  Indicate by check mark whether the
registrant is a well-known seasoned issuer, as defined in Rule 405 of the
Securities Act. oYesxNo  If this report is an annual or transition
report, indicate by check mark if the registrant is not required to file reports
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. o  Yes x  No  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 Company was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. x
Yes  oNo  Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, or a
non-accelerated filer. See definition of "accelerated filer and large
accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer o    Accelerated Filer o   Non-accelerated Filer x Indicate by check mark which financial
statement item the registrant has elected to follow. Item 17 x  Item 18 o  If this is an annual report, indicate by
check mark whether the registrant is a shell company (as defined in Rule 12b-2
of the Exchange Act). o  Yes x  No  (APPLICABLE ONLY TO ISSUERS INVOLVED IN
BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)  Indicate by check mark whether the
registrant has filed all documents and reports required to be filed by Sections
12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court. o  Yes o  No   2    TABLE OF CONTENTS  PagePart I.Item 1.
Identity of Directors, Senior Management and
Advisers
4Item 2.
Offer Statistics and Expected Timetable
4Item 3.
Key Information
5Item 4.
Information on the Company
10Item 4A.
Unresolved Staff Comments
15Item 5.
Operating and Financial Review and Prospects
16Item 6.
Directors, Senior Management and Employees
18Item 7.
Major Shareholders and Related Party
Transactions
21Item 8.
Financial Information
21Item 9.
The Offer and Listing
21Item 10.
Additional Information
23Item 11.
Quantitative and Qualitative Disclosures About
Market Risk
28Item 12.
Description of Securities Other than Equity
Securities
28Part II.Item 13.
Defaults, Dividend Arrearages and
Delinquencies
29Item 14.
Material Modifications to the Rights of Security
Holders and Use of Proceeds
29Item 15.
Controls and Procedures
29Item 16.
[Reserved]
29Item 16(A).
Audit Committee Financial Expert
30Item 16(B).
Code of Ethics
30Item 16(C).
Principal Accountant Fees and Services
30Item 16(D).
Exemption from the Listing Standards for Audit
Committees
31Item 16(E).
Purchases of Equity Securities by the Issuer and
Affiliated Purchasers
31Part III.Item 17.
Financial Statements
31Item 18.
Financial Statements
32Item 19.
Exhibits
32SIGNATURES
i  3   PART I.  ITEM 1. IDENTITY OF DIRECTORS, SENIOR
MANAGEMENT AND ADVISORS  A. DIRECTORS AND SENIOR MANAGEMENT  Name

Business Address

FunctionsChristopher J. Wensley

Suite 1710 -1040 West Georgia Street
Vancouver, BC
Canada V6E 4H1

Director, PresidentPatrick Forseille

Suite 1710-1040 West Georgia Street
Vancouver, BC
Canada V6E 4H1

Director, CFOJ. Paul Sorbara

Suite 1710-1040 West Georgia Street
Vancouver, BC
Canada V6E 4H1

DirectorRon Bourgeois

Suite 1710-1040 West Georgia Street
Vancouver, BC
Canada V6E 4H1

Director, Secretary  Mr. Chris Wensley has been a director and officer since
October 6, 2005.  Mr. James Ramano was a director from October 1, 2003 to
March 21, 2006.  Mr. Robert Paul was a director from February 27, 1997 to
October 1, 2003.  Mr. Jim Pettit was a director from January 20, 2003 to
August 10, 2006.  Mr. Donald Huston acted as director from March 1, 2000 to
January 30, 2004.  Mr. Daniel Torok acted as director from April 1, 2002 to
January 20, 2003.  Mr. Patrick Forseille has been a director and officer
since October 12, 2004.  Mr. Ronald Bougeois has been a director and officer since
August 10, 2006.  Mr. Paul Sorbara has been a director since January 30,
2004.  B. ADVISERS  Name

Business Address

PositionTupper Johnsson & Yeadon

1710-1177 West Hastings Street
Vancouver, BC
Canada V6E 2L3

Legal Counsel  C. AUDITORS  Name

Business Address

Professional Body MembershipDavidson & Company LLP

1200-609 Granville Street.
P.O. Box 10372
Pacific Centre, Vancouver
Canada V7Y 1G6

Nexia International  ITEM 2. OFFER STATISTICS AND EXPECTED
TIMETABLE  Not applicable.  4   ITEM
3. KEY INFORMATION  A.  SELECTED FINANCIAL DATA  The selected consolidated financial data
presented in the table below for the fiscal years ended February 29, 2008 and
February 28, 2007 is derived from our consolidated financial statements and is
denominated in Canadian dollars. Our consolidated financial statements are
prepared in accordance with accounting principles generally accepted in Canada.
This data includes our accounts and our wholly-owned subsidiary's accounts. The
following selected financial data is qualified by reference to, and should be
read in conjunction with, our consolidated financial statements and related
notes. We follow the full cost method of accounting for oil and gas
operations.  The selected financial data for the years
ended February 29, 2008 and February 28, 2007 was derived from our financial
statements, which have been audited by Davidson & Company LLP, as indicated
in their audit report which is included elsewhere in this Annual Report. We have
not declared any dividends since incorporation and do not anticipate that we
will do so in the foreseeable future. Our present policy is to retain future
earnings for use in our operations and the expansion of our business.  Selected Financial Data Presented According
to Canadian GAAP---Please see full financials for full explanation of
reconciliation of the below financial data to U.S. GAAP.  Year ended

Year ended

Year ended

Year ended

Year endedFebruary 29

February 28

February 28

February 28

February 292008

2007

2006

2005

2004Revenue
$
163,283
$
137,196
$
0
$
0
$
6,659Net Loss

(1,667,370)

(672,855)

(1,430,579)

(382,381)

(231,481)Net Loss per share basicand diluted

(0.08)

(0.04)

(0.11)

(0.04)

(0.09)Cash dividends per share

0

0

0

0

0Weighted average shares

21,780,705

16,754,935

13,330,102

8,614,714

4,082,092Year ended shares outstanding

25,088,800

19,094,250

14,894,250

9,600,000

6,660,000Total assets

706,070

1,613,474

691,974

1,106,353

478,909Long term liabilities

0

0

0

0

0Shareholders' equity

696,622

986,047

362,189

764,697

474,181Capital expenditures (net)

235,756

794,370

503,063

1,046,984

356,374   5   B. CAPITALIZATION AND
INDEBTEDNESS  The following table sets forth our
capitalization and indebtedness as at February 29,2008 and is qualified by
reference to, and should be read in conjunction with, our consolidated financial
statements and related notes.  Capitalization and Indebtedness (In Canadian Dollars)  February 29,
2008IndebtednessAccounts payable and accrued liabilities
$
5,057Note Payable

-Convertible loan

-Total Indebtedness

9,448Shareholders' equityShare capital

5,152,693Contributed surplus

367,716Deficit

(4,823,787)Net shareholders' equity

696,622  C. REASONS FOR THE OFFER AND USE OF PROCEEDS  Not Applicable  D. RISK FACTORS  This section describes some of the risks
and uncertainties faced by us. The factors below should be considered in
connection with any forward looking statements in this Annual Report. The risk
factors described below are considered to be the significant or material ones,
but they are not the only risks faced by us.  The Company Faces Competition.  The oil and gas industry is highly
competitive. We experience competition in all aspects of our business, including
searching for, developing and acquiring reserves, obtaining pipeline and
processing capacity, leases, licenses and concessions, and obtaining the
equipment and labor needed to conduct operations and market crude oil and
natural gas. Our competitors include multinational energy companies, other
independent crude oil and natural gas concerns and individual producers and
operators. We have limited financial and other resources.  Many competitors
have financial and other resources substantially greater than those available to
us and, accordingly, may be better positioned to acquire and exploit prospects,
hire personnel and market production. In addition, many of our larger
competitors may be better able to respond to factors such as changes in
worldwide crude oil and natural gas prices, levels of production, the cost and
availability of alternative fuels or the application of government regulations.
We expect a high degree of competition to continue.  6   Government Regulation and
Environmental Matters may Adversely Affect the Company  We are subject to various federal and state
laws and regulations, including environmental laws and regulations in each
jurisdiction in which we operate. As we are in the drilling industry, government
regulation is much greater than that of many other industries.  We believe
that we are in compliance with such laws and regulations. Such laws and
regulations may change in the future in a manner that will increase the burden
and cost of compliance. In addition, we could incur significant liability for
damages, clean up costs and penalties in the event of certain discharges into
the environment. Certain laws and governmental regulations may impose liability
on us for personal injuries, clean-up costs, environmental damages and property
damages, as well as administrative, civil and criminal penalties. We believe
that cost of compliance with environmental regulations will not have an adverse
effect on our operations or earnings, risks of costs and liabilities are
inherent in oil and gas operations, and there can be no assurance that
significant costs and liabilities, including criminal penalties, will not be
incurred. Moreover, it is possible that other developments, such as stricter
environmental laws and regulations, and claims for damages for injuries to
property or persons resulting from our operations could result in costs and
liabilities. Some of the regulations that apply to us in the United States,
where we have field operations, include the Resource Conservation and Recovery
Act and comparable state statutes, the Comprehensive Environmental Response,
Compensation and Liability Act, the Clean Air Act, the Occupational Safety and
Health Act and comparable state statutes, the Oil Pollution Act 1990, the Water
Pollution Control Act of 1972, the Safe Drinking Water Act and the Toxic
Substances Control Act. We are unable to estimate the costs to be incurred for
compliance with environmental laws over the next twelve months.  Management
believes all such costs will be those ordinarily and customarily incurred in the
development and production of oil and gas and that no unusual costs will be
encountered.  Exploration and Production Regulations may
Limit Horizons Expansion and Growth.  Our operations in the United States are
subject to various types of regulation at the federal, state and local levels.
Such regulations include requiring permits for the drilling of wells,
maintaining bonding requirements in order to drill or operate wells and
regulating the location of wells, the method of drilling and casing wells, the
surface use and restoration of properties upon which wells are drilled, the
plugging and abandoning of wells and the disposal of fluids used or obtained in
connection with operations. Our operations are also subject to various
conservation regulations. These include the regulation of the size of drilling
and spacing units and the density of wells that may be drilled and the
unitization or pooling of oil and gas properties. In addition, certain state
conservation laws may establish maximum rates of production from oil and gas
wells, generally prohibit the venting or flaring of gas and impose certain
requirements regarding the ratability of production. The effect of these
regulations is to limit the amount of oil and gas which can be produced from
wells in which we hold interest and may limit the number of wells or the
locations at which wells can be drilled. The extent of any impact on our
operations of such restrictions cannot be predicted.  International Operations may Complicate
Horizons Govt., Environmental and Regulatory Compliance.  We are actively pursuing oil and gas
opportunities in several foreign countries. International crude oil and natural
gas exploration, development and production activities are subject to political
and economic uncertainties (including but not limited to changes, sometimes
frequent or material, in governmental energy policies or the personnel
administering them), expropriation of property, cancellation or modification of
contract rights, foreign exchange restrictions, currency fluctuations, royalty
and tax increases, limits on allowable levels of production and other risks
arising out of foreign governmental sovereignty over the areas in which our
operations will be conducted, as well as risks of loss due to civil strife,
terrorism, acts of war and insurrection. These risks may be higher in developing
countries in which we may conduct such activities. Our international operations
may also be adversely affected by laws and policies of Canada or the United
States affecting foreign trade, taxation and investment. Consequently, our
international exploration, development and production activities may be affected
by factors beyond our control, any of which could materially adversely affect
our financial position or results of operations. Furthermore, in the event of a
dispute arising from international operations, we may be subject to the
exclusive jurisdiction of courts outside the United States or Canada or may not
be successful in subjecting persons to the jurisdictions of the courts in the
United States or Canada, which could adversely affect the outcome of such
dispute.  Dependence on Key Personnel may Limit
Horizons Growth.  As we have only a few employees, we depend
to a large extent on the services of Christopher J. Wensley, our President,
Patrick Forseille, our CFO and Ron Bourgeois, corporate secretary. The loss of
the services of any of these individuals could have a potential adverse effect
on our operations.  Ability to Attract Competent Personnel may
Hamper Horizons Growth.  Recent commodity price increases have
driven an increase in oil and gas exploration activities worldwide, with a
concurrent rise in demand for competent oil and gas professionals. We are a
small company and must compete with larger, better capitalized companies for
competent personnel.  7   Concentration of
Producing Properties may Cause Delays or Interruptions.  Our crude oil and natural gas production is
presently concentrated in three properties in Texas, United States: the Stewart
Lease, Manahuilla Creek and Whatley Prospect. We will be vulnerable to a
disproportionate impact of delays or interruptions of production until we
develop a more diversified production base. Once we have more producing
properties, a disruption in one property will have less of an impact on our
overall production. In addition, we are not the operator of the Manahuilla Creek
and Whatley properties. As such, our plans, commitments and obligations are
dependent on the operator's plans and on how well the operator executes such
plans.  Insurance and Uninsured Risk to Horizons
Assets and Operations.  Our business is subject to a number of
risks and hazards, including the risk of fire, explosions, equipment failure,
abnormally pressured formations, environmental hazards, industrial accidents,
changes in the regulatory environment, labor disputes, the occurrence of any of
which could result in  losses to us due to injury or loss of life, severe
damage to or destruction of property, natural resources and equipment, pollution
or other environmental damage, clean-up responsibilities, regulatory
investigation and penalties and suspension of operations. Our insurance will not
cover all the potential risks associated with an oil and gas company's
operations. We may also be unable to maintain insurance to cover these risks at
economically feasible premiums. Insurance coverage may not be available or may
not be adequate to cover any resulting liability. There are risks against which
we cannot insure or against which we may elect not to insure. We, and the
operators of our properties, maintain insurance in amounts that we believe to be
reasonable. The occurrence of a significant event that is not fully insured
could have an adverse effect on our results of operation and our financial
condition.  Commodity Price Fluctuations may Affect
Profitability or Production.  Our revenues and profitability are
dependent upon prevailing prices for crude oil, natural gas and natural gas
liquids. For much of the past decade, the markets for crude oil and natural gas
have been extremely volatile. These markets are expected to continue to be
volatile in the foreseeable future. In general, future prices of crude oil,
natural gas and natural gas liquids are dependent upon numerous external factors
such as various economic, political and regulatory developments and competition
from other sources of energy. The unsettled nature of the energy market and the
unpredictability of worldwide political developments, including, for example,
the Iraq war and the actions of the Organization of Petroleum Exporting
Countries members, make it particularly difficult to estimate future prices of
crude oil, natural gas and natural gas liquids.  Exploration Risks may Limit Horizons
Success.  Our results of operations are heavily
dependent on how successful we are in the exploration for crude oil and natural
gas. Exploration activities involve more risk than development or exploitation
activities. Exploratory drilling is a speculative activity. The use of
three-dimensional seismic data and other advanced technologies may increase the
probability of success of exploratory wells, and reduce the average finding
costs through the elimination of prospects that might otherwise be drilled
solely on the basis of two-dimensional seismic data and other traditional
methods. Even when fully utilized and properly interpreted, three-dimensional
seismic data and visualization techniques only assist geoscientists in
identifying subsurface structures and hydrocarbon indicators and do not
conclusively allow the interpreter to know if hydrocarbons will in fact be
present, or present in economic quantities, in such structures. Failure of our
exploration activities would have an adverse effect on our results of operations
and financial condition.  Operating Risks to Property, Equipment and
Operations.  The oil and gas industry involves a variety
of operating risks, including the risk of fire, explosion, blowout, pipe
failure, casing collapse, stuck tools, abnormally pressured formations and
environmental hazards such as oil spills, gas leaks, pipeline ruptures and
discharges of toxic gases, the occurrence of any of which could result in losses
to us due to injury and loss of life, loss of or damage to well bores and/or
drilling or production equipment, costs of overcoming down hole problems, severe
damage to and destruction of property, natural resources and equipment,
pollution and other environmental damage, clean-up responsibilities, regulatory
investigation and penalties and suspension of operations. Gathering systems and
processing facilities are subject to many of the same hazards and any
significant problems related to those facilities could adversely affect our
ability to market our production. Moreover, offshore operations are subject to a
variety of operating risks peculiar to the marine environment, such as
hurricanes or other adverse weather conditions. The occurrence of a significant
event not fully insured or indemnified against could materially and adversely
affect our financial condition and results of operations.  Shortage of Supplies and Equipment may
Limit or Reduce Production.  Our ability to conduct operations in a
timely and cost effective manner is subject to the availability of crude oil and
natural gas field supplies, rigs, equipment and service crews. There presently
exists a general tightening of supplies, equipment and personnel available to
conduct operations in a timely manner. As we may not receive priority in
ordering and shipping over other companies who may place larger and more
frequent orders, we anticipate this shortage of certain types of supplies and
equipment will result in delays in our operations as well as in higher operating
and capital costs.  8   Capital
Requirements may Limit Horizons Growth.  We will be required to make capital
expenditures to develop reserves and to discover new crude oil and natural gas
reserves. If our cash and cashflow from operating activities is insufficient to
fund such additional expenditures, we may be required to sell equity, issue
debt, sell properties or offer interests in the properties to be earned by
another party or parties carrying out further exploration or development
thereof. There can be no assurance that capital will be available to us from any
source or that, if available, it will be at prices or on terms acceptable to us.
Should sufficient capital not be available, the development and exploration of
our properties could be delayed and, accordingly, the implementation of our
business strategy would be adversely affected. If we are unable to meet our
share of costs incurred under agreements to which we are a party, our interest
in the properties subject to such agreements may be reduced.  Replacement of Reserves may Reduce Future
Production.  Producing oil and natural gas reservoirs
generally are characterized by declining production rates that vary depending
upon reservoir characteristics and other factors. Our future success depends
upon our ability to find, develop and/or acquire crude oil and natural gas
reserves at prices that permit profitable operations. Except to the extent that
we conduct successful development, exploitation or exploration activities or
acquire properties containing proved reserves, our proved reserves will decline.  Estimates of Reserves and Related Data may
Prove Inaccurate.  Numerous uncertainties are inherent in
estimating quantities of proved and other reserves of oil and gas and in
projecting future rates of production and timing of development expenditures,
including many factors beyond the control of the producer. The reserve data
presented in this Annual Report represents only estimates based on available
geological, geophysical, production and engineering data, the extent, quality
and reliability of which vary. Oil and gas reserve engineering is a subjective
process of estimating accumulations of oil and gas that cannot be measured in an
exact manner, and estimates of other engineers might differ materially from
those shown.  Additional Capital Contributions Could
Result in Dilution to Existing Shareholders.  We do not know if we will be able to
generate material revenue from oil and gas operations. Historically, the primary
source of funds available to us has been through the sale of our equity
securities. Any future additional equity financing could cause dilution to
current stockholders.  Limited and Volatile Trading Volume may
Limit Stock Resale Ability.  Our shares trade on the TSX Venture
Exchange, the volume of trading has been limited and volatile in the past and is
likely to continue to be so in the future, making it difficult for investors to
readily sell their shares in the open market. Without a liquid market for the
our shares, investors may be unable to sell their shares at favorable times and
prices and may be required to hold their shares in declining markets or to sell
them at unfavorable prices. Our shares do not trade on an established market in
the United States and we cannot make any assurances that our shares will ever
trade in such a market, or if they do so trade, that a United States market for
our shares will be sustained.  Volatility of Share Price may Limit Stock
Resale Value.  The market price of many resource
companies, particularly resource exploration companies like us, have experienced
wide fluctuations in price, resulting in losses to investors who have sold their
shares at a low price point. These fluctuations are based only in part on the
level of progress of exploration, and can reflect general economic and market
trends, world events or investor sentiment, and may sometimes bear no apparent
relation to any objective factors or criteria. Significant fluctuation in our
share price is likely to continue, and could potentially increase, in the
future.  The Company Does not Intend to Issue
Dividends.  No dividends on our common shares have been
paid to date. We currently plan to retain all future earnings and other cash
resources, if any, for the future operation and development of our business.
Payment of future dividends, if any, will be at the discretion of our board of
directors after taking into account many factors, including our operating
results, financial condition, and current and anticipated cash needs.  Future Sales of Common Shares by Existing
Shareholders may Limit Stock Resale Ability and Price.  Sales of a large number of our common
shares in the public markets, or the potential for such sales, could decrease
the trading price of the common shares and could impair our ability to raise
capital through future sales of common shares.  9   Incorporation in
Canada may Cause Difficulty for U.S. Investors to Effect Service of Process.  We are incorporated under the laws of the
Province of British Columbia, Canada. Consequently, it will be difficult for
United States investors to effect service of process in the United States upon
our directors or officers, or to realize in the United States upon judgments of
United States' courts predicated upon civil liabilities under the Exchange Act.
All of our directors are residents of Canada, and a significant portion of our
assets are located outside of the United States. A judgment of a United States
court predicated solely upon such civil liabilities would probably be
enforceable in Canada by a Canadian court if the United States court in which
the judgment was obtained had jurisdiction, as determined by the Canadian court,
in the matter. There is doubt whether an original action could be brought
successfully in Canada against any of such persons or us predicated solely upon
such civil liabilities.  Conflicts of Interest may Hamper Officer
and Director Effectiveness.  There may be potential conflicts of
interest for certain of our officers and directors who are or may become engaged
from time to time in the crude oil and natural gas business on their own behalf
or on behalf of other companies with which they may serve in the capacity as
directors or officers. Certain of our independent directors are officers and/or
directors of other publicly traded crude oil and natural gas exploration and
production companies.  Clear Title to Properties is subject to
many factors.  Title to oil and gas properties is subject
to royalty, overriding royalty, carried, net profits, working and other similar
interests and contractual arrangements, to liens for current taxes not yet due
and to other encumbrances. Only cursory investigation of record title is made at
the time of acquisition. Drilling title opinions are usually prepared before
commencement of drilling operations. The Company has no basis to believe that
such will occur, there can be no assurance that our title to oil and gas
properties may not be challenged through legal proceedings.  ITEM 4. INFORMATION ON THE
COMPANY  A. HISTORY AND DEVELOPMENT OF THE
COMPANY  Incorporation, Amalgamation and Name
Change. The Company was incorporated under the provisions of the Company Act of
the Province of British Columbia on February 24, 1997 as J.P.T. Resources Ltd.,
and changed its name to Horizon Industries, Ltd. on June 7, 1999.  On December 22, 2003, the Company formed a
wholly-owned subsidiary, Horizon Industries (USA), Ltd. which was incorporated
in the State of Nevada. All current and future U.S. based petroleum and natural
gas interests will be legally held by this wholly-owned U.S. subsidiary.  CONTACT INFORMATION. Our head office is
located at Suite 1710-1040 West Georgia Street Box 83, Vancouver BC Canada V6E
4H1. Telephone: 604-488-3900. Fax: 604-488-3910. Our contact person is Patrick
Forseille.  PRINCIPAL EXPENDITURES.  Our principal capital expenditures over the
last 3 years are: During fiscal 2008, Horizon acquired a 25 to 37.5% interest in
the Waverly prospect located in San Jacinto County, Texas for $78,750 and
200,000 shares of Horizon.  One gas well was completed on the property.
 During fiscal 2006, Horizon acquired the Funk lease located in Goliad
County, Texas, for $40,000.  3D seismic data was acquired and two gas wells
were drilled on the lease.  During fiscal 2005, Horizon acquired the
Stewart leases in Goliad County, Texas for $93,404.   3D seismic data
was acquired one well was drilled on the property. During the 2005 fiscal year,
Horizon acquired a 12% interest in the Whatley #1 Development prospect in the
Spartan Field, San Patricio County, Texas for $19,200.  One well was
drilled on the prospect.  All of these are in the U.S. and were financed
internally through the sale of the Companys stock.  Our principle capital divestitures over the
last three years were the Manahuilla Creek project, the Minton prospect and the
Beaver Dam Creek project which were written off in fiscal 2006 all of which are
in the U.S.  The Whatley prospect was written off in fiscal 2008 and is
also in Texas.  DEVELOPMENT OF OUR BUSINESS. We are in the
business of exploring, developing and producing crude oil and natural gas
properties.  STEWART LEASE. During the 2005 fiscal year,
the Company's wholly owned subsidiary, Horizon Industries U.S.A. Ltd. acquired
544 acres composed of two contiguous 272 acre leases in Goliad County, Texas
expiring between January 12, and July 5, 2008.  10   The Stewart
prospect is within the Jobar field, which was discovered by Edge Petroleum in
late 1997 with production from the middle Yegua formation between 5,300 and
5,500 feet. To date, there are 9 wells in the Jobar field with cumulative gas
production of 5.9 Bcf of gas. The average initial production for the wells in
the field has been 1.8Mmcf per day to a maximum of 5 Mmcf per day from the
Swickheimer #2 well. The closest well to the Stewart lease is the V. Albrecht #1
well, which is located 900 feet east of the lease. Total production from this
well is 650 Mmcf with an initial production rate of 1.85Mmcf per day.  The
Company has not entitlement to this property and the locality of the property
does not assure it will experience similar recoveries.  The Jobar field appears to be a series of
isolated bar deposits trending in a north-east/south-west direction. Some
faulting may have occurred between the bars. The average area of the individual
bar is approximately 40 acres. The Jobar field was discovered using seismic
amplitude analysis. 2D Seismic over the Stewart lease indicates the existence of
at least three and up to five untested sand bars.  Even when properly
interpreted, seismic data and visualization techniques are not conclusive in
determining if hydrocarbons are present in economically producible amounts.
 Horizon has purchased a 3D data set over this prospect to further refine
these targets prior to drilling.  During 2006, the Company completed drilling
of the 5,700 foot Stewart #1 well at the Stewart East Prospect. The well was put
online in February 2006 and is currently not producing gas.  The Company is
considering drilling a shallow well on the Stewart West acreage.  During 2006, the Company acquired all
deeper rights on the Stewart lease in Goliad County, TX. Recently gas and
condensate was discovered by Chesapeake Energy Corporation in 2003 in the
Marshall Field in the Middle Wilcox formation, which is located approximately
1.5 miles north of the Stewart lease.  Preliminary interpretation shows several
defined structural targets comprising approximately 200 acres in the Wilcox
formation situated within the Stewart West acreage. The target appears
consistent with other successful Wilcox wells in the immediate vicinity.
 Even when properly interpreted, seismic data and visualization techniques
are not conclusive in determining if hydrocarbons are present in economically
producible amounts.  There are currently several producing
Wilcox wells within one half mile of the Stewart leases. The Etoco Heard #1 well
located one half mile due North, came on line in February of 2005 having an
initial production rate of 8.9 Million Cubic Feet Per Day (MMCF/ D). This well
produced a cumulative 2/26BCF of gas plus 47,300 Bbl of condensate to date. The
Chesapeake Eichman #1 Well, situated less than one half mile North West of
Horizon's Stewart leases, came on line in April 2005 having an initial
production rate of 21MMCF/D. The well has produced a cumulative 3.5BCF of gas
plus 45,000 Bbls of condensate. The Chesapeake Hawkins Deep #1 well located
1,000 feet due west of Horizon's Stewart leases has produced a cumulative 2.9
BCF and 33,000 barrels of condensate. The Hawkins Deep #2 located directly south
of the Hawkins Deep #1 has produced .9 BCF and 10,000 barrels of condensate.
 The Company has not entitlement to this property and the locality of the
property does not assure it will experience similar recoveries.  Based on the recent Wilcox activity in the
area, Horizon acquired and processed the 3D data covering the Wilcox horizons on
the Stewart lease. The data is of high quality and shows that the Stewart lease
is on the next down faulted block from the wells in the Marshall Field.
 These amplitudes appear to be at least as strong or stronger that the
Marshall Field anomalies.  Even when properly interpreted, seismic data and
visualization techniques are not conclusive in determining if hydrocarbons are
present in economically producible amounts.  MANAHUILLA CREEK. The Company's wholly
owned subsidiary, Horizon Industries U.S.A. Ltd. acquired a 20% working interest
in the Manahuilla Creek Prospect in Goliad County, TX.  A 6,700 foot test
well was drilled in May 2004. Several zones were tested with no significant flow
obtained. During fiscal 2006, the Company abandoned the well and all related
costs were added to the capitalized costs subject to depletion.  WHATLEY PROSPECT. The Company's wholly
owned subsidiary, Horizon Industries, U.S.A. Ltd. owns a 9% working interest in
the Whatley #1 Development Prospect, in the Spartan Field, San Patricio County,
Texas.  The Whatley #1 well is located on a 312 acre lease in the Spartan
Field, San Patricio County Texas. The Spartan Field was discovered in the 1940's
by 2D seismic exploration. The Company paid approximately US$192,000 for its
ownership share of a development well on the property which was drilled in
September 2004. The well was put online in January 2005 and since that time,
several zones have been perforated tested and flowed to sales with limited
production. During the current fiscal year, the well was abandoned and the
prospect was written off.  WAVERLY PROSPECT.  During the current
fiscal year, the Company's wholly-owned subsidiary, Horizon Industries U.S.A.
Ltd. entered into a Joint Venture agreement to participate with Pan American
Development Company, Inc. in a drilling program in San Jacinto County, Texas,
approximately 50 miles north of Houston Texas. The Company acquired a 25%
working interest in the initial phase of the prospect with an option to acquire
up to 37.5% working interest in the balance of the prospect currently comprising
a total of 3,100 acres (75% net revenue interest).  11   The initial
phase calls for the development of 400 acres of Jackson sands at a depth of
approximately 2,800 feet.  The acreage may also host a second gas charged
Jackson sand at approximately 3,100 feet based on logs from nearby wells.
 Well log indications of hydrocarbon saturation do not assure productivity
and that the locality of your property does not assure it will experience
similarities in well log response. No reserves have been assigned to this
stratigraphic trap, but the sand has produced gas in several wells in the
immediate area.  There is geological evidence for an additional 40 location
on existing leasehold and the possibility for even more (up to 80) potential
locations if the geologic model associated with this prospect is accurate.  An initial test well was drilled in June
2007 and perforation and flow testing of the first of several primary zones of
interest as identified by logs and side wall cores was completed.  Four
feet of perforations were shot in this first zone.  The well was flow
tested for 2 hours each on a 6/64ths choke, an 8/64ths choke and for 4 hours on
a 10/64ths choke.  The well flowed at stable rates of 264 MCF, 461 MCF and
611 MCF dry gas per day respectively, with stabilized flowing tubing pressures
of 1,135 PSI, 1,120 PSI and 1,080 PSI respectively.  The well is currently
flowing approximately 60 MMCFPD.  The Hammond #1 well is the first of up to
five wells proposed to be drilled on the initial 400 acre phase of the New
Waverly prospect.  FUNK LEASE.  During the previous
fiscal year, the Company's wholly-owned subsidiary, Horizon Industries U.S.A.
Ltd., acquired a 100% working interest in the Funk property consisting of two
oil and gas leases totaling 400 acres located in Goliad County, Texas.  The
leases expire on March 31, 2009.  The property is situated in the prolific
Middle Yegua gas trend which has produced gas and condensate in the nearby
Naetze Yegua, Perdido Creek and Jobar fields.  The Company has acquired 3D data covering
Funk and surrounding lands to further define and identify prospective targets on
the lease previously defined by 2d seismic data.  Analysis and
interpretation of the 3d data has identified several prospective targets
throughout the property. Even when properly interpreted, seismic data and
visualization techniques are not conclusive in determining if hydrocarbons are
present in economically producible amounts.  The Perdido Creek field, discovered in 1985
is located one and one half miles northeast of the Funk Prospect.  Perdido
Creek hosts seven producing wells with cumulative production from Yega sands of
approximately 3-4 Bcf of gas and 80,000 bbl. of oil and condensate.  The
most prolific well in Perdido Creek, the Vrazel #1 produced 1.8 BCF together
with 3,000 barrels of oil and condensate from a 90' sand covering 36 acres.
 The Company has not entitlement to this property and the locality of the
property does not assure it will experience similar recoveries.  These
Yegua sands appear to be similar to that underlying the Funk Prospect which
hosts 2D defined Yegua sand bodies of 35 to 50 acres in aerial extent.
 Even when properly interpreted, seismic data and visualization techniques
are not conclusive in determining if hydrocarbons are present in economically
producible amounts.  During fiscal 2006, the Company drilled the
Horizon Funk #1 well to a total depth of 2,530 feet.  Logs were completed
indicating fifteen feet of pay extending from a depth of 2,018 feet to 2,033
feet.  On August 22, 2006, a four foot interval was perforated between
2,020 feet and 2,024 feet.  The Funk #1 well is currently shut in after
producing minor amounts of gas from various zones.  During the previous year, the Horizon Funk
#2 well was drilled cased and completed at a depth of 6,060 feet.  Log
results showed four highly prospective pay zones in the well in the Yegua, Cook
and Frio formations.  The Funk #2 well was perforated in August 2007 and
put to sales at that time.   It is currently producing at
approximately 100 MCF/D as of August 2008.  B. BUSINESS OVERVIEW  Nature of Our Operations. Our principal
business is acquiring, exploring and developing crude oil and natural gas
properties. In the United States, we are currently acquiring, exploring or
developing crude oil and natural gas properties located in Texas. We intend to
continue to pursue the acquisition of crude oil and natural gas properties and
pursue strategic opportunities to buy or sell assets or otherwise contract with
other companies in our industry.  Our success will depend on whether we are
able to locate and successfully negotiate for crude oil and natural gas
opportunities in countries which meet our criteria and then successfully develop
and produce crude oil and natural gas in those countries. Our success will also
depend on how well our prospects in the United States perform. All of our
production is currently from properties located in the United States.  In the United States, we will continue to
acquire properties where we can exploit lower-risk missed pay, increased density
and behind casing reserves by using modern technologies: three dimensional
seismic data, cased hole logging, under balanced drilling, horizontal drilling
and fracture stimulation.  Principal Markets. As of February 29,2008,
we operate in one reportable segment, the exploration for and the development
and production of crude oil and natural gas.  Seasonality. Seasonality has no material
effect on our financial condition or results of operations. However, our crude
oil and natural gas exploration and development activities may be timed to meet
seasonal conditions.  12   Marketing
Channels. Crude oil production is sold under market sensitive or spot price
contracts. Natural gas production is sold to purchasers under varying
percentage-of-proceeds and percentage-of-index contracts or by direct marketing
to end users or aggregators. By the terms of the percentage-of-proceeds
contracts, we receive a percentage of the resale price paid to the purchaser for
sales of residue gas and natural gas liquids recovered after gathering and
processing the natural gas. The residue gas and natural gas liquids sold by
these purchasers are sold primarily based on spot market prices. The revenue
from the sale of natural gas liquids is included in natural gas sales.  Material Effects of Governmental
Regulations. Government regulations have a material effect on us to the extent
that they require us to conduct field operations and hydrocarbon extraction
activities according to prescribed environmentally-safe, sensitive regulations.
Also, government regulations may restrict the commencement or re-commencement of
field activities in certain properties in which we hold an interest for the
purpose of exploration. Examples of types of governmental laws and regulations
that may have a material effect on our business include:  · requirements to acquire
permits before commencing drilling operations;  · requirements to
restrict the substances that can be released into the environment in connection
with drilling and production activities;  · limitations on, or
prohibitions to, drilling in protected areas such as wildlife preserves; and  · requirements to
mitigate and remediate the effects caused by drilling and production
operations.  C. ORGANIZATIONAL STRUCTURE  We conduct the majority of our business
through a subsidiary incorporated outside of Canada. The following table
presents the name, the percentage of voting securities owned and the
jurisdiction of incorporation of our principal subsidiaries:  Percent

JurisdictionSubsidiary

Owned

of IncorporationHorizon Industries (USA), Ltd.

100

Nevada   13   D. PROPERTY, PLANT AND
EQUIPMENT  See ITEM 4.   DEVELOPMENT OF OUR BUSINESS  Property and Equipment  Year Ended

Year EndedFebruary 28,

February 29,2007

2008Petroleum and Natural Gas Interest--Beginning of Year
$
503,063
$
1,250,029Manahuilla Creek, TexasDeferred exploration costsnet of recoveries

-Write-off dry hole costs

(30,000)

-Whatley Prospect, TexasDeferred exploration
costsnet of
recoveries

1,869

-Write-off dry hole costs

-

(222,481)Beaver Dam Creek, Louisiana

-

-Deferred exploration costsnet of recoveries

-

-Write-off dry hole costs

-

--Minton Prospect, SaskatchewanDeferred exploration
costs,net of recovery

-

-Write-off dry hole costs

-

-Stewart Leases, TexasDeferred exploration cost,net of
recovery

45,152

(3,725)FunkDeferred exploration cost,net of recovery

542,389

48,916Depletion

(47,404)

(230,314)Write-off dry hole costs

30,000

(180,856)Coleto CreekDeferred exploration cost,net of recovery

204,960

(204,960)WaverlyDeferred exploration cost,net of recovery



395,524Depletion



(12,122)Write-off dry hole costs



(283,229)Petroleum and Natural Gas Interest--End of Year
$
1,250,029
$
556,782   14   Property
acquisitions:  See  ITEM 4.   DEVELOPMENT
OF OUR BUSINESS  Estimated Reserves of Crude Oil and Natural
Gas. As a Canadian issuer, we are required under Canadian law to comply with
National Instrument 51-101 "Standards of Disclosure for Oil and Gas Activities"
(NI 51-101) implemented by the members of the Canadian Securities Administrators
in all of our reserves related disclosures. Under NI 51-101, proved reserves are
those reserves that can be estimated with a high degree of certainty to be
recoverable. Reported proved reserves should target, under a specific set of
economic conditions, at least a 90% probability that the quantities of oil and
natural gas actually recovered will equal or exceed the estimated proved
reserves.  In the United States, registrants,
including foreign private issuers like us, are required to disclose proved
reserves using the standards contained in Rule 4-10(a) of the United States
Securities and Exchange Commission's ("SEC") Regulation S-X. Proved reserves
estimated and reported below pursuant to NI 51-101 also meet the definition of
estimated proved reserves required to be disclosed under Rule 4-10(a) of
Regulation S-X. The crude oil and natural gas industry commonly applies a
conversion factor to production and estimated proved reserve volumes of natural
gas in order to determine an "all commodity equivalency" referred to as barrels
of oil equivalent ("boe"). The conversion factor we have applied in this Annual
Report is the current convention used by many oil and gas companies, where six
thousand cubic feet ("mcf") of natural gas is equal to one barrel ("bbl") of
oil. The boe conversion ratio we use is based on an energy equivalency
conversion method primarily applicable at the burner tip. It may not represent a
value equivalency at the wellhead and may be misleading, particularly if used in
isolation.  There are currently proved + probably
undeveloped reserves from the Hammond #1 well and the Funk #2 wells.  The Hammond #1 well was drilled was drilled
and completed to a depth of 3,200 feet.  The well was perforated and has
flowed gas since September 2007.  The Funk #2 well was drilled and
completed to a depth of 6,060 feet. The well was perforated and flowed gas from
various formations since 2007.  (1) "Gross Reserves" are
our working interest (operating or non-operating) share before deducting of
royalties and without including our royalty interests. "Net Reserves" are our
working interest (operating or non-operating) share after deduction of royalty
obligations, plus our royalty interests in reserves.  (2) "Proved" reserves are
those reserves that can be estimated with a high degree of certainty to be
recoverable. It is likely that the actual remaining quantities recovered will
exceed the estimated proved reserves.  (3) "Probable" reserves are
those additional reserves that are less certain to be recovered than proved
reserves. It is equally likely that the actual remaining quantities recovered
will be greater or less than the sum of the estimated proved plus probable
reserves.  (4) "Possible" reserves are
those additional reserves that are less certain to be recovered than probable
reserves. It is unlikely that the actual remaining quantities recovered will
exceed the sum of the estimated proved plus probable plus possible reserves.  (5) "Developed" reserves
are those reserves that are expected to be recovered from existing wells and
installed facilities or, if facilities have not been installed, that would
involve a low expenditure (e.g. when compared to the cost of drilling a well) to
put the reserves on production.  (6) "Developed Producing"
reserves are those reserves that are expected to be recovered from completion
intervals open at the time of the estimate. These reserves may be currently
producing or, if shut-in, they must have previously been on production, and the
date of resumption of production must be known with reasonable certainty.  (7) "Developed
Non-Producing" reserves are those reserves that either have not been on
production, or have previously been on production, but are shut in, and the date
of resumption of production is unknown.  (8) "Undeveloped" reserves
are those reserves expected to be recovered from know accumulations where a
significant expenditure (for example, when compared to the cost of drilling a
well) is required to render them capable of production. They must fully meet the
requirements of the reserves classification (proved, probable, possible) to
which they are assigned.  ITEM 4A. UNRESOLVED STAFF
COMMENTS  Not applicable.  15   ITEM 5. OPERATING AND FINANCIAL
REVIEW AND PROSPECTS  A. OPERATING RESULTS  The
Company incurred a net loss before other items of $1,003,403 for the year ended
February 29, 2008 compared to a net loss of $789,625 in the previous year
and $513,262 in 2006. The increase during the current period is mainly due
to increases in consulting fees of $199,358 (2007-$161,609)
(2006- $80,645), shareholder communication fees of $130,618 (2007-$138,200)
(2006-$85,130), direct operating expense of $151,130
(2007-$108,362)(2006-$6,651).  Consulting fees increased over the period
due to the Company expanding its property base requiring more usage of technical
consultants to explore and develop its increasing land position. 
Shareholder communications fees increased over the period to better communicate
the results from the Companys expanding property base.  Direct operating
expenses also increased over the period due to gas wells being brought online
incurring expenses associated with operating gas producing wells. 
Professional fees increased from $106,604 for the year ended February 28, 2007
to $153,185 for the year ended February 29, 2008 due to the Company expanding
its property base requiring more professional expertise such as property
management and legal representation.  Office and administration fees
decreased from $57,250 for the year ended February 28, 2007 to $47,733 for the
year ended February 29, 2008 due to decreased overhead activity related to the
development of the Companys resources properties.  The company also incurred a future
income tax recovery of $nil compared to a future income tax recovery of $55,427
the previous year. The Company renounced $163,020 of income tax credits from CEE
to the 2006 flow through shareholders. The recovery of future income taxes of
$55,427 in 2007 represents the income tax effect of this
renouncement.  Our revenue has increased from 2007 to 2008
due to the Company's ability to find and develop natural gas
reservoirs.  We cannot be certain whether this revenue will continue due to
the uncertainty involved in producing from new reservoirs.  Without long
term engineering analysis, it is difficult to determine the life span of the
reservoirs  Every year end, the Company is required to
file a Form 51-101F Statement of reserves data. As of February 29, 2008 the
Company has proved reserves of natural gas.  B. LIQUIDITY AND CAPITAL RESOURCES  The Company has financed its operations to
date primarily though the issuance of common shares and exercise of stock
options. The Company continues to seek capital through various means including
the issuance of equity and/or debt.  The Company anticipates that as
additional equity/debt financing continues along with increasing revenues from
production, the Companys working capital deficiency shall be eliminated.
 The Company anticipates that current financing along with cash flow from
production shall be sufficient for the Company to operate without additional
arrangements for funding for at least the next 12 months.  The financial statements have been prepared
on a going concern basis which assumes that the Company will be able to realize
its assets and discharge its liabilities in the normal course of business for
the foreseeable future. The continuing operations of the Company are dependent
upon its ability to continue to raise adequate financing and to commence
profitable operations in the future.  February 28

February 292007

2008Working Capital (Deficiency)
$
(263,982)
$
139,840Deficit

3,156,417

4,823,787  Net cash used in operating activities for
the year period ended February 29, 2008 was $571,209 compared to $369,074 used
during the year ended February 28, 2007. The cash used in operating activities
for the current year consists primarily of operating loss and a change in
non-cash working capital.  Net cash used by investing activities for
the year ended February 29, 2008 was $930,228 compared to $372,767 used during
the prior year. Net cash used during the current period consists primarily of
expenditures on oil and gas properties.  Net cash provided by financing activities
for the year ended February 29, 2008 was $1,290,370 compared to $953,368
provided during the prior year. The cash provided by financing activities for
the current period was primarily raised by private placements, and the exercise
of warrants and options.  16   C. RESEARCH AND
DEVELOPMENT, PATENTS AND LICENSES, ETC.  We have no material research and
development programs or policies.  D. TREND INFORMATION  There are a number of trends in the crude
oil and natural gas industry that are shaping the near future of the business.
Crude oil prices are dependent upon the world economy and the global
supply-demand balance. Demand for crude oil continues to grow, particularly in
developing countries. The current environment of geopolitical unrest has
increased prices well above those supported by current supply-demand balances
based on perceived risk. While pricing in the future may more accurately reflect
supply-demand fundamentals, it would appear that the current tight supply
environment is highly sensitive to political and terrorist risks as evidenced by
the risk premium in the current price structure.  The magnitude of this
risk premium changes over time. Natural gas prices have been somewhat volatile
over the past year, particularly due to shut-ins and damages to production
facilities in the Gulf of Mexico as a result of adverse weather conditions. With
the supply and demand balance for natural gas being tight, the market has
experienced volatility in pricing due to a number of factors, including weather,
drilling activity, declines, storage levels, fuel switching and demand. In
addition, in the next few years liquid natural gas terminals are anticipated to
add natural gas supplies to the United States, resulting in a moderation of
natural gas prices. It appears that prices of crude oil and natural gas no
longer rise and fall in tandem. Any disruptive event could cause crude oil or
natural gas prices to spike.  Similarly, resolution of certain geopolitical
tensions, such as the crisis with Iran concerning the development of nuclear
weapons capability, could cause such prices to moderate.  E. OFF-BALANCE SHEET ARRANGEMENTS  As at February 29, 2008, we had no
off-balance sheet arrangements.  F. TABULAR DISCLOSURE OF CONTRACTUAL
OBLIGATIONS  None.  G. SAFE HARBOR  Certain statements in this Annual Report,
including those appearing under this Item 5, constitute "forward-looking
statements" within the meaning of the United States Private Securities
Litigation Reform Act of 1995, Section 21E of the United States Securities
Exchange Act of 1934, as amended, Section 27A of the United States Securities
Act of 1933, as amended and within the meaning of applicable Canadian securities
legislation. Additionally, forward looking statements may be made orally or in
press releases, conferences, reports, on our website or otherwise, in the
future, by us on our behalf. Such statements are generally identifiable by the
terminology used such as "plans", "expects, "estimates", "budgets", "intends",
anticipates", "believes", "projects", "indicates", "targets", "objective",
"could", "may" or other similar words.   As the Company is currently
defined as a penny stock under the Securities Exchange act of 1934, the
Company cannot rely on the safe harbor provision for forward-looking statements
under the Private Securities Litigation Reform Act of 1995.  By their very nature, forward-looking
statements require us to make assumptions that may not materialize or that may
not be accurate. Forward-looking statements are subject to known and unknown
risks and uncertainties and other factors that may cause actual results, levels
of activity and achievements to differ materially from those expressed or
implied by such statements. Such factors include, among others: market prices
for natural gas, natural gas liquids and oil products; the ability to produce
and transport natural gas,  natural gas liquids and oil; the results of
exploration and development drilling and related activities; economic conditions
in the countries and provinces in which we carry on business, especially
economic slowdown; actions by governmental authorities including increases in
taxes, changes in environmental and other regulations, and renegotiations of
contracts; political uncertainty, including actions by insurgent groups or other
conflict; the negotiation and closing of material contracts; and the other
factors discussed in Item 3 Key Information - "Risk Factors", and in other
documents that we file with the United States Securities and Exchange Commission
and with Canadian securities regulatory authorities. The impact of any one
factor on a particular forward-looking statement is not determinable with
certainty as such factors are interdependent upon other factors; our course of
action would depend upon our assessment of the future considering all
information then available. In that regard, any statements as to future natural
gas, or oil production levels; capital expenditures; the allocation of capital
expenditures to exploration and development activities; sources of funding for
our capital program; drilling of new wells; demand for natural gas and oil
products; expenditures and allowances relating to environmental matters; dates
by which certain areas will be developed or will come on-stream; expected
finding and development costs; future production rates; ultimate recoverability
of reserves; dates by which transactions are expected to close; cash flows; uses
of cash flows; collectability of receivables; availability of trade credit;
expected operating costs; and changes in any of the foregoing are
forward-looking statements, and there can be no assurance that the expectations
conveyed by such forward-looking statements will, in fact, be realized.  17   We believe that
the expectations conveyed by the forward-looking statements are reasonable based
on information available to us on the date such forward-looking statements were
made, no assurances can be given as to future results, levels of activity,
achievements or financial condition. Readers should not place undue reliance on
any forward-looking statement and should recognize that the statements are
predictions of future results, which may not occur as anticipated. Actual
results could differ materially from those anticipated in the forward-looking
statements and from historical results, due to the risks and uncertainties
described above, as well as others not now anticipated. The foregoing statements
are not exclusive and further information concerning us, including factors that
potentially could materially affect our financial results, may emerge from time
to time. We do not intend to update forward-looking statements to reflect actual
results or changes in factors or assumptions affecting such forward-looking
statements.  ITEM 6. DIRECTORS, SENIOR
MANAGEMENT AND EMPLOYEES  A. DIRECTORS AND SENIOR MANAGEMENT  Name
Position Held
AgeChristopher J. Wensley
President and Director
51Patrick Forseille
Director and CFO
43J. Paul Sorbara
Director
55Ron Bourgeois
Director and Secretary
57  CHRISTOPHER J. WENSLEY Mr. Wensley holds a
Diploma of Technology in Administrative Management from the British Columbia
Institute of Technology. Following graduation in 1981, Mr. Wensley began an 18
year career in commercial and investment real estate. During this period, he was
actively involved in: the acquisition and disposition of income properties
including office buildings, industrial facilities, and development sites; office
portfolio leasing for a major Canadian pension fund group; and managing sales
and project marketing of high-end recreational real estate property in British
Columbia. In the late nineties, Mr. Wensley left the real estate business to
become an independent business management and venture capital consultant. In
1999, he began providing investor relations, corporate communication, and
corporate finance services to numerous public companies.  Mr. Wensley became involved with the
Company in the fall of 2003 since which time he has made significant investment
in Horizon and has given valuable assistance in the ongoing funding of the
company and its prospects.  Mr. Wensley also owns and oversees several
private interests in a number of North American oil and gas properties.
 Mr. Wensley devotes approximately 30 hours per week to the Companys
activities.  Mr. Wensley spends his remaining 10 hours per week consulting
with and reviewing information from the above private interests.  Mr. Wensley is not a director of any other
public companies.  See CONFLICTS OF INTEREST in Risk
Factors.  PATRICK FORSEILLE Mr. Forseille has worked
in the oil and gas and mining industry for over ten years. Most recently he has
been Chief Financial Officer of Olympic Resources, Ltd., an oil and gas
producing company since 1997 and has also concurrently served as a director for
various other public companies in differing capacities including comptroller and
exploration manager. Mr. Forseille is a Professional Geoscientist with a
Bachelor of Commerce degree in accounting. Previously, he was employed as an
accountant and geologist with Cameco Corp and Imperial Oil Resources Ltd.  Mr. Forseille devotes approximately 30
hours per week to the Companys activities.  Mr. Forseille is currently a director of
the following public companies:  Company
ExchangeFirst Star Resources, Inc.
TSXV  See CONFLICTS OF INTEREST in Risk
Factors  18   J. PAUL SORBARA
Mr. Sorbara holds a Master of Science Degree from the University of Toronto and
is also a Professional Geologist. Following graduation, he conducted Caldera
Reconnaissance Programs for Cominco Ltd. In both British Columbia and the Seirra
Madre Occidental range in Northern Mexico, spending a number of years in
Cominco's Guadalajara office. In the mid nineteen-eighties, Mr. Sorbara left
Cominco to establish a successful geological consultant practice. In 1992, Mr.
Sorbara started his own private Mexican exploration company, Minera Delta S.A.
de C.V. which has now grown to become a substantial operation. Mr. Sorbara is
presently the President of Golden Goliath Resources Ltd. a junior mining
exploration company exploring for gold in Mexico.  Mr. Sorbara is currently a director of the
following public companies:  Company
ExchangeGolden Goliath Resources Ltd.
TSXV  See CONFLICTS OF INTEREST in Risk Factors  RON BOURGEOIS A Chartered Accountant, Ron
Bourgeois brings over 25 years of executive and managerial experience to the
Company. He has held numerous and varying management and public company
positions with extensive experience in the development and financing of major
oil and gas resource and infrastructure assets internationally. Mr. Bourgeois
has been deeply involved in the acquisition, administration and development of
oil and gas projects in Texas and Louisiana where these activities have
showcased his rigorous due diligence and negotiation abilities. As the founding
Chief Financial Officer, Mr. Bourgeois managed and coordinated the merger of two
public corporations; Optima Petroleum Corporation and American Explorer LLC to
create PetroQuest Energy Inc. which currently trades on the NYSE with a market
valuation exceeding US$500 million.   Mr. Bourgeois served as CFO for
Optima Petroleum Corporation.  The date of the merger was 1998.  His long term experience in the U.S. oil
patch has given Mr. Bourgeois a keen understanding of local issues relating to
tax and corporate structure as well as state and federal policy. He has played a
hands-on role overseeing the exploration, financing and administration of
numerous exploration and development oil and gas properties and
transactions.  Mr. Bourgeoise is currently a director of the following
public companies:  Company
ExchangeRolland Energy Inc.
TSXV  See CONFLICTS OF INTEREST in Risk Factors  LARRY HARGRAVE graduated from Lamar
University in 1973, with a degree in Geology. Earlier in his career, Mr.
Hargrave was chief geologist for Damson Oil in the Rocky Mountains, where he
supervised the geology, drilling and development of several thousand wells in
Montana. In addition, Mr. Hargrave has designed and installed significant gas
gathering systems in South Texas as well as vapor recovery systems in gas
condensate reservoirs in Siberia.  Utilizing his extensive drilling, and
downhole experience, Mr. Hargrave has been very successful not only in new
completions but also in identifying bypassed potential production, reentering,
and reengineering well bores and surface facilities to develop and improve net
cash flows.  Mr. Hargrave is currently a director of the following
public companies:  Company
ExchangeBest Energy Services Inc.
NYSE  See CONFLICTS OF INTEREST in Risk Factors  The Directors of the Company devote times
as Directors of the Company as needed.   They have no interests which
require a devotion of time which would hamper their full devotion of times as
Directors to the Company as needed.  19   B.
COMPENSATION  The following table sets forth all annual
and long-term compensation for services in all capacities in the year ended Feb.
29, 2008 for our directors, chief executive officer and chief financial
officer.  OptionsOther

GrantedAnnual

ExerciseFees
Bonus
Compensation
Number
Price
Expiry
DateChristopher WensleyPresident, Chief ExecutiveOfficer and Director
$
115,586
nil
nil
150,000
0.30
Oct. 5  201175,000
0.25
Dec. 5, 201040,000
0.30
Aug. 3, 200970,000
0.17
Oct. 6, 201050,000
0.20
Mar. 15 201085,000
0.30
Apr. 12 2011Patrick ForseilleCFO, Secretary and Director
$
77,124
nil
nil
50,000
0.20
Mar. 15, 201075,000
0.17
Oct. 6, 201025,000
0.25
Dec. 5, 201040,000
0.30
Aug. 200960,000
0.30
Apr. 12
 2011  The Companys Directors currently receive
no compensation for their work as directors other than being compensated for
expenses incurred in their duty as directors.  The following are the options exercised by
executive officers during the Company's completed financial year ended Feb 29,
2008.  Securities
Aggregate
Unexercised
ValueAcquired
Value Realized
Options/SARs at FY-End
the-Money Options/SARSName
On Exercise
($)
Exercisable/Unexcercisable
at FY-End Exerc/UnexercChristopher Wensley
45,000
7,650
470,000 / nil
nil / nil  C. BOARD PRACTICES  Term of Office. At the end of Fiscal 2007,
we had four directors. The terms of all four expire at the annual meeting of
shareholders:  Christopher Wensley Patrick Forseille Paul Sorbara Jim Pettit  D. EMPLOYEES  As of February 29, 2008, we had no full
time employees including our executive officers.  E. Share Ownership.  The following list all officer and director
beneficial share ownership in excess of 1%.  Christopher Wensely

2,615,000

9.70%Patrick Forseille

268,000

1.00%  For a description of our Amended and
Restated Stock Option Plan (2006), please see Part II, Item 10.C - Material
Contracts and Agreements.  20   ITEM 7. MAJOR SHAREHOLDERS AND
RELATED PARTY TRANSACTIONS  A. MAJOR SHAREHOLDERS  To the best of our knowledge, no person
beneficially owns, directly or indirectly, or exercises control or direction
over shares constituting more than five percent of the voting rights of our
shares, other than as set forth below:  Shareholder

Number of Shares

PercentageChristopher Wensley

2,615,000

9.70%  Approximately 22,376,550 of the companys
outstanding shares or 82.44% are currently listed under deposit with CDS &
Co.  Our major shareholders do not have
different voting rights than any other shareholders. As of February 29, 2008,
our shareholders list showed 25,088,800 common shares outstanding with 14
registered shareholders in Canada holding common shares. We are not controlled,
directly or indirectly, by any corporation, foreign government or other
person.  B. RELATED PARTY TRANSACTIONS  The aggregate amount of expenditures made
to parties not at arms length to the Company consist of the following:  a) Paid consulting fees of
$115,586 (2007-$108,565) to Chris Wensley as a director and officer of the
company for services during the year.  b) Paid professional fees
of $77,124 (2007-$72,110) to Patrick Forseille as a director and officer of the
Company.   C. INTERESTS OF EXPERTS AND COUNSEL  Not applicable.  ITEM 8. FINANCIAL
INFORMATION  A. CONSOLIDATED STATEMENTS AND OTHER
FINANCIAL INFORMATION FINANCIAL STATEMENTS ARE PROVIDED UNDER PART III, ITEM
17.  Legal or Arbitration Proceedings. As of the
date of this Annual Report, we are, to the best of our knowledge, not subject to
any material active or pending legal proceedings or claims against us or any of
our properties. However, from time to time, we may be subject to claims and
litigation generally associated with any business venture. Additionally, our
operations are subject to risks of accident and injury, possible violations of
environmental and other regulations, and claims associated with the risks of
exploration operations some of which cannot be covered by insurance or other
risk reduction strategies.  Dividend Policy. We have not paid any cash
dividends on our common stock and have no present intention of paying dividends.
Our current policy is to retain earnings, if any, for use in operations and in
business development.  B. SIGNIFICANT CHANGES  None  ITEM 9. THE OFFER AND
LISTING  A. OFFER AND LISTING DETAILS  Not Applicable  21   B. PLAN OF
DISTRIBUTION  Not Applicable  C. MARKETS  Our shares of common stock are traded in
Canada on the Toronto Stock Exchange ("TSX-V") under the symbol "HRZ.V." As of
February 29, 2008, we had 25,088,800 shares of common stock outstanding. Our
shares of common stock are issued in registered form and the number of shares of
common stock reported to be held by record holders in Canada and the United
States is taken from the records of Pacific Corporate Trust Company of Canada,
the registrar and transfer agent for our shares of common stock. For U.S.
reporting purposes, we are a foreign private issuer. We currently have no
established market for trading our shares in the United States. The high and low
prices for our common stock from January 1, 2001 through December 31, 2007 on
the TSX are as follows:  High

LowJanuary 1, 2001 through December 31, 2001

$0.12

$0.10January 1, 2002 through December 31, 2002

$0.10

$0.03January 1, 2003 through December 31, 2003

$0.40

$0.04January 1, 2004 through December 31, 2004

$0.48

$0.13January 1, 2005 through December 31, 2005

$0.28

$0.13January 1, 2006 through December 31, 2006

$0.40

$0.18January 1, 2007 through December 31, 2007

$0.53

$0.19  The high and low prices for our common stock for the most
recent six months on the TSX-V are as follows:  High

LowMarch 1, 2008 through March 31, 2008

$0.19

$0.12April 1, 2008 through April 30, 2008

$0.11

$0.08May 1, 2008 through May 31, 2008

$0.14

$0.10June 1, 2008 through June 30, 2008

$0.13

$0.10July 1, 2008 through July 31, 2008

$0.11

$0.08  D. SELLING SHAREHOLDERS  Not Applicable  E. DILUTION  Not Applicable  F. EXPENSES OF THE ISSUE  Not Applicable  22   ITEM
10. ADDITIONAL INFORMATION  A. SHARE CAPITAL  Our authorized share capital consists of
100,000,000 common shares without par value. All issued shares are fully paid
and non-assessable. As of February 29,2008 we had 25,088,800 shares issued and
outstanding and had19,094,250 shares outstanding at the beginning of the year
(March 1, 2007). As of February 29, 2008, we have outstanding an aggregate of
1,695,000 options to purchase shares pursuant to our Amended and Restated Stock
Option Plan (2006). We also have outstanding 7,282,750 share purchase warrants
related to several private placements which closed in the past two years.  On February 28, 2007 we had a total of
19,094,250 shares issued and outstanding as compared to 14,894,250 issued and
outstanding on February 28, 2006.  There are no shares of the company which
are currently under option or upon which there is an agreement to be put under
option in the future.  The Companys flow through shares have the
following characteristics: Canadian tax legislation permits a company to issue
flow-through shares whereby the deduction for tax purposes relating to qualified
resource expenditures is claimed by the investors rather than the Company.
 Recording these expenditures for accounting purposes gives rise to taxable
temporary differences.  Emerging Issues Committee 146 Flow-Through
Shares requires that, whcn flow-through expenditures are renounced, a portion
of the future income tax assets that were not recognized in previous years, due
to the recording of a valuation allowance, be recognized as a recovery of income
taxes in the statement of operations.  B. ARTICLES OF INCORPORATION AND BYLAWS  The Companys Articles are included as an
Exhibit hereto.  There are no limitations in the Articles upon the
Companys Objects and purposes.   All shares have equal dividend
rights and there is no time limit at which any dividend entitlement expires.
  The entire Board of Directors stands for election at the same time
and there is no cumulative voting.  All shares have equal rights to share
in the companys profits, rights to surplus in the event of liquidation.
 There are no redemption provisions, sinking fund provisions, liability to
further capital calls by the company and no provisions discriminating against
any existing or prospective holder of such securities as a result of such
shareholder owning a substantial number of shares.  The Board has found that the fiduciary
duties placed on individual directors by the Company's governing corporate
legislation and the common law and the restrictions placed by applicable
corporate legislation on a individual director's participation in decisions of
the Board in which the director has an interest have been sufficient to ensure
that the Board operates independently of management and in the best interests of
the Company.  Under the corporate legislation, a director
is required to act honestly and in good faith with a view to the best interests
of the Company and exercise the care, diligence and skill that a reasonably
prudent person would exercise in comparable circumstances, and disclose to the
board the nature and extent of any interest of the director in any material
contract or transaction, is a director of officer (or an individual acting in a
similar capacity) of a party to the contract or transaction or has a material
interest in a party to the contract or transaction. The director must then
abstain from voting on the contract or transaction unless the contract or
transaction (i) relates primarily to their remuneration as a director, officer,
employee or agent of the Company or an affiliate of the Company (ii) is for
indemnity or insurance for the benefit of the director in connection with the
Company, or (iii) is with an affiliate of the corporation. If the director
abstains from voting after disclosure of their interest, the directors approve
the contract or transaction and the contract or transaction was reasonable and
fair to the Company at the time it was entered into, the contract or transaction
is not invalid and the director is not accountable to the Company for any profit
realized from the contract or transaction. Otherwise, the director must have
acted honestly and in good faith, the contract or transaction must have been
reasonable and fair to the Company and the contract or transaction be approved
by the shareholders by a special resolution after receiving full disclosure of
its terms in order for the director to avoid such liability or the contract or
transaction being invalid.  Shareholder votes are required on any
action which changes the rights of holders of the Companys stock as required by
law.  Annual general meetings shall be held once
every calendar year at a time not being more than 13 months after the holding of
the last preceding annual general meeting, and at a place as the Directors shall
appoint.  The Directors may, whenver they think fit, convene a general
meeting.  A general meeting, if requisitioned in accordance with The Act,
shall be convened by the Directors or, if not convened by the Directors, may be
convened by the requisitionists.  23   C. MATERIAL
CONTRACTS AND AGREEMENTS  Amended and Restated Stock Option Plan
(2006). Our only equity compensation plan is the Amended and Restated Stock
Option Plan (2006) (the "Option Plan"), which has been approved and adopted by
our shareholders. Pursuant to the Option Plan, we may grant stock options to our
directors, officers, employees and consultants or to directors, officers,
employees or consultants of our subsidiaries. The stock options enable such
persons to purchase our common shares at the exercise price fixed by our Board
at the time the option is granted. Our Board determines the number of common
shares purchasable pursuant to each option and such exercise price within the
guidelines established by the Option Plan. These guidelines allow the Board to
authorize the issuance of options with a term not to exceed 10 years and to set
other conditions to the exercise of options, including any vesting provisions.
Consistent with the rules of the Toronto Stock Exchange, our Option Plan
requires that the exercise price of the options at the time of grant may not be
lower than the market price of our common shares, which is the closing price of
our common shares on the Toronto Stock Exchange on the trading day immediately
prior to the date the stock option is granted.  Stock Options.  As of February 29, 2008, the following
stock options are outstanding:  Number of Shares

Exercise Price

Expiry Date25,000

0.32

August 4, 200880,000

0.30

August 3, 2009100,000

0.20

March 15, 2010145,000

0.17

October 6, 2010100,000

0.25

December 5, 201050,000

0.20

January 31, 2011420,000

0.30

April 12, 2011250,000

0.30

October 5, 2011100,000

0.35

January 18, 2012100,000

0.35

January 29, 201250,000

0.33

August 30, 2012275,000

0.35

September 30,
2012  Warrants.  As of February 29, 2008, the following warrants are
outstanding:  Number of Shares

Exercise Price

Expiry Date1,370,000

$     0.35

May 5, 20083,025,000

0.35

June 25, 2008192,000

0.30

June 25, 20082,695,750

0.30

December 27,
2009 Joint Venture.  During the 2008 fiscal year, the Companys
wholly-owned subsidiary, Horizon Industries U.S.A. Ltd. entered into a Joint
Venture agreement to participate with Pan American Development Company, Inc. in
a drilling program in San Jacinto County, Texas, approximately 50 miles north of
Houston Texas.  The Company acquired a 25% working interest in the initial
phase of the prospect with an option to acquire up to 37.5% working interest inn
the balance of the prospect currently comprising a total of 3,100 acres (75% net
revenue interest).  The initial phase calls for the development
of 400 acres of Jackson sands at a depth of approximately 2,800 feet.
 Drilling of up to five wells is contemplated on the initial 400 acres.  Management Agreements.  The Company has management agreements with
Christopher Wensley and Patrick Forseille. Mr. Forseilles contract is for a
renewable 1 year term under which is to provide geological, management and
administrative services to the Company. Mr. Forseilles compensation under this
contract is $5,500 per month, plus G.S.T. At the time of this contracts renewal
the compensation is set at a mutually agreed upon amount. Mr. Wensleys contract
is for a renewable 3 year term under which he is to provide leadership,
management and administrative services to the Company. Mr. Wensleys
compensation under this contract is $6,000 per month, plus G.S.T.  24   D. EXCHANGE CONTROLS  There are no governmental laws, decrees, or
regulations in Canada that restrict the export or import of capital or that
affect the remittance of dividends, interest, or other payments to non-resident
holders of our common stock. However, any such remittance to a non-corporate
resident of the United States may be subject to a 15% withholding tax pursuant
to Article XI of the reciprocal tax treaty between Canada and the United States.
Except as provided in the Investment Canada Act (the "Act"), enacted on June 20,
1985, as amended, as further amended by the North American Free Trade Agreement
(NAFTA) Implementation Act (Canada) and the World Trade Organization (WTO)
Agreement Implementation Act, there are no limitations under the laws of Canada,
the Province of British Columbia or in the charter or any other of our
constituent documents on the right of non-Canadians to hold and/or vote our
common stock.  E. TAXATION  The following paragraphs set forth certain
United States and Canadian federal income tax considerations in connection with
the payment of dividends on and purchase or sale of our shares of common stock.
The tax considerations are stated in general terms and are not intended to be
advice to any particular shareholder. Each prospective investor may consult his
or her own tax advisor regarding the tax consequences of his or her purchase,
ownership and disposition of shares of our common stock. The discussion set
forth below is based upon the provisions of the Income Tax Act (Canada) (the
"Tax Act"), the Internal Revenue Code of 1986, as amended (the "Code") and the
Convention between Canada and the United States of America with respect to Taxes
on Income and on Capital (the "Convention"), as well as United States Treasury
regulations and rulings and judicial decisions. Except as otherwise specifically
stated, the following discussion does not take into account or anticipate any
changes to such laws, whether by legislative action or judicial decision. The
discussion does not take into account the provincial tax laws of Canada or the
tax laws of the various state and local jurisdictions in the United States.  Canadian Federal Income Tax Considerations.
The following discussion applies only to citizens and residents of the United
States and United States corporations who are not resident in Canada and will
not be resident in Canada and who do not use or hold nor are deemed to use or
hold such shares of our common stock in carrying on a business in Canada. The
payment of cash dividends and stock dividends on the shares of our common stock
will generally be subject to Canadian withholding tax. The rate of the
withholding tax will be 25% or such lesser amount as may be provided by treaty
between Canada and the country of residence of the recipient. Under the
Convention, the withholding tax generally would be reduced to 15%. Neither
Canada nor any province thereof currently imposes any estate taxes or succession
duties. Provided a holder of shares of our common stock has not, within the
preceding five years, owned (either alone or together with persons with whom he
or she does not deal at arm's length) 25% or more of the shares of common stock,
the disposition (or deemed disposition arising on death) of such shares of
common stock will not be subject to the capital gains provisions of the Tax
Act.  United States Federal Income Tax
Considerations. The following discussion is addressed to US holders. As used in
this section, the term "US holder" means a holder of our common stock that is
for United States federal income tax purposes (1) an individual citizen or
resident of the United States, (2) a corporation created or organized in or
under the laws of the United States, any state of the United States or the
District of Columbia, (3) an estate the income of which is subject to United
States federal income taxation regardless of its source, or (4) a trust if a
court within the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons (as defined in
the Code) have the authority to control all substantial decisions of the trust,
or a trust was in existence on August 20, 1996, and validly elected to continue
to be treated as a United States person. This discussion deals only with the
holders that hold their common stock as capital assets within the meaning of
Section 1221 of the Code. The discussion does not address all aspects of United
States federal income taxation that may be relevant to US holders in light of
their particular circumstances, nor does it address the United States federal
income tax consequences to US holders that are subject to special rules under
the Code, including, but not limited to, (i) dealers or traders in securities,
(ii) financial institutions, (iii) tax-exempt organizations or qualified
retirement plans, (iv) insurance companies, (v) entities that are taxed under
the Code as partnerships, pass-through entities or "Subchapter S Corporations",
(vi) persons or entities subject to the alternative minimum tax, (vii) persons
holding common stock as a hedge or as part of a straddle, constructive sale,
conversion transaction, or other risk management transaction, and (viii) holders
who hold their common stock other than as a capital asset.  25   Dividends.
Subject to the discussion of the "passive foreign investment company" rules
below, a US holder owning shares of common stock must generally treat the gross
amount of dividends paid by us to the extent of our current and accumulated
earnings and profits without reduction for the amount of Canadian withholding
tax, as dividend income for United States federal income tax purposes. To the
extent that distributions exceed our current or accumulated earnings and
profits, they will be treated first as a tax-free return of capital, which will
reduce the holder's adjusted tax basis in his or her common stock (but not below
zero), then as capital gain. The dividends generally will not be eligible for
the "dividends received" deduction allowed to United States corporations. The
amount of Canadian withholding tax on dividends may be available, subject to
certain limitations, as a foreign tax credit or, alternatively, as a deduction
(see discussion at "Foreign Tax Credit" below). In general, dividends paid by us
will be treated as income from sources outside the United States if less than
25% of our gross worldwide income for the 3-year period ending with the close of
our taxable year preceding the declaration date of the dividends was effectively
connected with a trade or business in the United States. If 25% or more of our
worldwide gross income for the 3-year testing period is effectively connected
with a trade or business in the United States, then for United States federal
income tax purposes our dividends will be treated as U.S. source income in the
same proportion that the U.S. trade or business income bears to our total
worldwide gross income. Dividends paid by us generally will be "passive income,"
or in the case of certain types of taxpayers, "financial services income" for
foreign tax credit purposes.  If we make a dividend distribution in
Canadian dollars, the U.S. dollar value of the distribution on the date of
receipt is the amount includible in income. Any subsequent gain or loss in
respect of the Canadian dollars received arising from exchange rate fluctuations
generally will be U.S. source ordinary income or loss. Long-term capital gain of
noncorporate taxpayers generally is eligible for preferential tax rates.
Additionally, for taxable years beginning after December 31, 2002 and before
January 1, 2011, subject to certain exceptions, dividends received by certain
noncorporate taxpayers from "qualified foreign corporations" are taxed at the
same preferential rates that apply to long-term capital gain. The maximum
federal tax rate on net long-term capital gains recognized by noncorporate
taxpayers currently is 15%. Provided that we are not a "passive foreign
investment company," as discussed below, we currently should meet the definition
of "qualified foreign corporation." As a consequence, dividends paid to certain
noncorporate taxpayers should be taxed at the preferential rates. Sale or
Exchange of Common Stock. Subject to the discussion of the "passive foreign
investment company" rules below, the sale of a share of our common stock
generally results in the recognition of gain or loss to the US holder in an
amount equal to the difference between the amount realized and the US holder's
adjusted tax basis in such share. Gain or loss upon the sale of the share will
be long-term or short-term capital gain or loss, depending on whether the share
has been held for more than one year. The maximum federal tax rate on net
long-term capital gains currently is 15% for noncorporate taxpayers and 35% for
corporations. Capital gain that is not long-term capital gain is taxed at
ordinary income rates. The deductibility of capital losses is subject to certain
limitations. Gain recognized by a US holder on the sale or other disposition of
our common stock will generally be treated as United States source income.  Foreign Tax Credit. Subject to the
limitations set forth in the Code, as modified by the Convention, a US holder
may elect to claim a credit against his or her U.S. federal income tax liability
for Canadian income tax withheld from dividends received in respect of shares of
our common stock. Holders of our common stock and prospective US holders of our
common stock should be aware that dividends we pay generally will constitute
"passive income" for purposes of the foreign tax credit, which could reduce the
amount of foreign tax credit available to them. The rules relating to the
determination of the foreign tax credit are complex. US holders of our common
stock and prospective US holders of our common stock may their own tax advisors
to determine whether and to what extent they would be entitled to such credit.
Holders who itemize deductions may instead claim a deduction for Canadian income
tax withheld.  Information Reporting and Backup
Withholding. Information reporting requirements will generally apply to
dividends on, and the proceeds of a sale or exchange of, our common stock that
are paid within the United States (and, in some cases, outside the United
States) to US holders and certain exempt recipients (such as corporations).
Certain US holders may be subject to backup withholding at the rate of 28% on
dividends paid or the proceeds of a sale or exchange of our common stock.
Generally, backup withholding will apply to a US holder only when the US holder
fails to furnish us with or to certify to us the US holder's proper United
States tax identification number or we are informed by the Internal Revenue
Service of the United States that the US holder has failed to report payments of
interest and dividends properly. US holders may use their own tax advisors
regarding the qualification for exemption from backup withholding and
information reporting and the procedure for obtaining any applicable
exemption.  26   Passive Foreign
Investment Company Considerations. Special rules apply to US holders that hold
stock in a "passive foreign investment company" ("PFIC"). A non-U.S. corporation
generally will be a PFIC for any taxable year in which either (i) 75% or more of
its gross income is passive income or (ii) 50% or more of the gross value of its
assets consists of assets, determined on the basis of a quarterly average, that
produce, or that are held for the production of, passive income. For this
purpose, passive income generally includes, among other things, interest,
dividends, rents, royalties and gains from certain commodities transactions. We
believe that we should not be classified as a PFIC for the current taxable year
or prior taxable years, and we do not anticipate being a PFIC with respect to
future taxable years. However, there can be no assurance that we will not be
considered a PFIC for any taxable year, because (1) the application of the PFIC
rules to our circumstances is unclear and (2) status under the PFIC rules is
based in part on factors not entirely within our control (such as market
capitalization). Furthermore, there can be no assurance that the Internal
Revenue Service will not challenge our determination concerning our PFIC status.
Therefore, US holders and prospective US holders mayo consult with their own tax
advisors with respect to the application of the PFIC rules to them. If, contrary
to our expectations, we were to be classified as a PFIC for any taxable year, a
US holder may be subject to an increased tax liability (including an interest
charge) upon the receipt of certain distributions from us or upon the sale,
exchange or other disposition of our common stock, unless such US holder timely
makes one of two elections. First, if, for any taxable year that we are treated
as a PFIC, a US holder makes a timely election to treat us as a qualified
electing fund ("QEF") with respect to such Holder's interest in common stock,
the electing US holder would be required to include annually in gross income (1)
such Holder's pro rata share of our ordinary earnings, and (2) such Holder's pro
rata share of any of our net capital gain, regardless of whether such income or
gain is actually distributed. In general, a US holder may make a QEF election
for any taxable year at any time on or before the due date (including
extensions) for filing such Holder's United States federal income tax return for
such taxable year. However, Treasury regulations provide that a US holder may be
entitled to make a retroactive QEF election for a taxable year after the
election's due date if certain conditions are satisfied. In the event of a
determination by us or the Internal Revenue Service that we are a PFIC, we
intend to comply with all record-keeping, reporting and other requirements so
that US holders, at their option, may maintain a QEF election with respect to
us. However, if meeting those record-keeping and reporting requirements becomes
onerous, we may decide, in our sole discretion, that such compliance is
impractical, and will notify US holders accordingly.  As an alternative to the QEF election, US
holders may elect to mark their common stock to its market value (a
"mark-to-market election"). If a valid mark-to-market election is made, the
electing US holder generally will recognize ordinary income for the taxable year
an amount equal to the excess, if any, of the fair market value of their common
stock as of the close of such taxable year over the US holder's adjusted tax
basis in the common stock. In addition, the US holder generally is allowed a
deduction for the lesser of (1) the excess, if any, of the US holder's adjusted
tax basis in the common stock over the fair market value of the common stock as
of the close of the taxable year, or (2) the excess, if any of (A) the
mark-to-market gains for the common stock included in gross income by the US
holder for prior taxable years, over (B) the mark-to-market losses for common
stock that were allowed as deductions for prior tax years.  If we were determined to be a PFIC in any
year, a US holder who beneficially owned shares of our common stock during that
year would be required to file an annual return on Internal Revenue Service Form
8621 with the Internal Revenue Service that described any distributions received
from us and any gain realized by that US holder on the disposition of their
shares of our common stock. The PFIC rules are complex. Accordingly, US
holders and prospective US holders of our common stock may consult their own tax
advisors concerning the impact of these rules, including the making of QEF or
mark-to-market elections, on their investment or prospective investment in our
common stock.  F. DIVIDENDS AND PAYING AGENTS  We have not paid any dividends since our
inception and have no plans to pay dividends.  G. STATEMENT OF EXPERTS  Our consolidated financial statements as of
February 28, 2007 and February 29, 2008 and for each of the years in the three
year period ended February 29, 2008, have been included herein and in the Annual
Report, in reliance upon the report of Davidson & Company LLP, 1200 -609
Granville Street, P.O. Box 10372, Pacific Centre, Vancouver, B.C. Canada V7Y
1G6, Tel: 604-687-0947 Fax: 604-687-6172 independent registered public
accounting firm, appearing elsewhere herein, and upon the authority of said firm
as experts in accounting and auditing.  H. DOCUMENTS ON DISPLAY  We have filed this Annual Report on Form
20-F with the SEC, under the Securities and Exchange Act of 1934, as amended,
with respect to our common stock. You may read and copy all or any portion of
this Annual Report or other information in the SEC's public reference room at
100 F Street, N.E. Washington, DC 20549.. You can also request copies of these
documents upon payment of a duplicating fee, by writing the SEC. Please call the
SEC at 1-800-SEC-0330 for further information on the operation of the public
reference rooms. The SEC maintains a web site (http://www.sec.gov) that
contains all of our filings with the SEC. The documents concerning us may also
be viewed at our offices in Vancouver BC and Texas during normal business
hours.  27   I. SUBSIDIARY
INFORMATION  Not applicable.  ITEM 11. QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK  Market risk represents the risk of loss
that may impact our financial position, results of operations, or cash flows due
to adverse changes in financial market prices, including interest rate risk,
foreign currency exchange rate risk, commodity price risk, and other relevant
market or price risks. We do not have activities related to derivative financial
instruments or derivative commodity instruments. We do hold a portfolio of
equity securities resulting from previous business transactions. These
securities are susceptible to equity market risk. The oil and gas industry is
exposed to a variety of risks including the uncertainty of finding and
recovering new economic reserves, the performance of hydrocarbon reservoirs,
securing markets for production, commodity prices, interest rate fluctuations,
potential damage to or malfunction of equipment and changes to income tax,
royalty, environmental or other governmental regulations. We mitigate these
risks to the extent we are able by:  · utilizing competent,
professional consultants as support teams to company employees;  · performing careful and
thorough geophysical, geological and engineering analyses of each prospect;  · maintaining adequate
levels of property liability and other business insurance;  · limiting our prospect
operations to the extent appropriate.  Market risk is the possibility that a
change in the prices for natural gas, natural gas liquids, condensate and oil,
foreign currency exchange rates, or interest rates will cause the value of a
financial instrument to decrease or become more costly to settle. We are exposed
to commodity price risks, credit risk and foreign currency exchange rates.  Commodities Price Risk. Our financial
condition, results of operations and capital resources are highly dependent upon
the prevailing market prices of oil and natural gas. These commodity prices are
subject to wide fluctuations and market uncertainties due to a variety of
factors that are beyond our control. Factors influencing oil and natural gas
prices include the level of global demand for crude oil, the foreign supply of
oil and natural gas, the establishment of and compliance with production quotas
by oil exporting countries, weather conditions which determine the demand for
natural gas, the price and availability of alternative fuels and overall
economic conditions. It is impossible to predict future oil and natural gas
prices with any degree of certainty. Sustained weakness in oil and natural gas
prices may adversely affect our financial condition and results of operations,
and may also reduce the amount of oil and natural gas reserves that we can
produce economically. Any reduction in our oil and natural gas reserves,
including reductions due to price fluctuations, can have an adverse affect on
our ability to obtain capital for our development activities. Similarly, any
improvements in oil and natural gas prices can have a favorable impact on our
financial condition, results of operations and capital resources  Credit Risk. In addition to market risk,
our financial instruments involve, to varying degrees, risk associated with
trade credit and risk associated with operatorship of certain properties as well
as credit risk related to our customers and trade payables. All of our accounts
receivable are with customers or partners and are subject to normal industry
credit risk. We do not require collateral or other security to support financial
instruments nor do we provide collateral or security to counterparties.
Currently, we do not expect non-performance by any counterparty. Foreign
Exchange Risk. Whenever we fund subsidiary company operations, foreign exchange
gains or losses are incurred (upon conversion from Canadian to U.S.
Dollars).  Interest Rate Risk. Interest rate risk
exists principally with respect to our cash invested in short term investments
that bears interest at floating rates.  ITEM 12. DESCRIPTION OF
SECURITIES OTHER THAN EQUITY SECURITIES  Not applicable.  28   PART
II.  ITEM 13. DEFAULTS, DIVIDEND
ARREARAGES AND DELINQUENCIES  The Company has no defaults, dividend
arrearages nor delinquencies in any of its obligations.  ITEM 14. MATERIAL MODIFICATIONS
TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS  The Company has made no material
modifications to the rights of security holders nor does the Company have any
registration statements under the Securities Act of 1933.  ITEM 15. CONTROLS AND
PROCEDURES  Evaluation of
Disclosure Controls and Procedures  As required by Rule 13a-15 under the
Securities Exchange Act of 1934 (the 1934 Act), as of February 29, 2008, we
carried out an evaluation of the effectiveness of the design and operation of
our disclosure controls and procedures.  This evaluation was carried out
under the supervision and with the participation of our Chief Executive Officer
(our principal executive officer) and our Chief Financial Officer (our principal
financial officer), who concluded, that because of the material weakness in our
internal control over financial reporting (ICFR) described below, our
disclosure controls and procedures were not effective as of February 29,
2008.  Disclosure controls and procedures are
controls and other procedures that are designed to ensure that information
required to be disclosed in our reports filed or submitted under the Securities
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commissions rules and forms.
 Disclosure controls and procedures include, without limitation, controls
and procedures designed to ensure that information required to be disclosed in
our reports filed under the Exchange Act is accumulated and communicated to our
management, including our principal executive officer and our principal
financial officer, as appropriate, to allow timely decisions regarding required
disclosure.  Internal Control
Over Financial Reporting  Our management is also responsible for
establishing ICFR as defined in Rules 13a-15(f) and 15(d)-15(f) under the 1934
Act. Our ICFR are intended to be designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with U.S. generally
accepted accounting principles. Our ICFR are expected to include those policies
and procedures that management believes are necessary that:  (i) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect
the transactions and dispositions of the assets of the Company;  (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the Company are being made
only in accordance with authorizations of management and our directors; and  (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition,
use or disposition of the Companys assets that could have a material effect on
the financial statements.  Management recognizes that there are
inherent limitations in the effectiveness of any system of internal control, and
accordingly, even effective internal control can provide only reasonable
assurance with respect of financial statement preparation and may not prevent or
detect misstatements. In addition, effective internal control at a point in time
may become ineffective in future periods because of changes in conditions or due
to deterioration in the degree of compliance with our established policies and
procedures.  As of February 29, 2008, management
assessed the effectiveness of our ICFR based on the criteria for effective ICFR
established in Internal Control--Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) and SEC guidance on
conducting such assessments by smaller reporting companies and non-accelerated
filers.  Based on that assessment, management
concluded that, during the period covered by this report, such internal controls
and procedures were not effective as of February 29, 2008 and that material
weaknesses in ICFR existed as more fully described below.  29   As defined by
Auditing Standard No. 5, An Audit of Internal Control Over Financial Reporting
that is Integrated with an Audit of Financial Statements and Related
Independence Rule and Conforming Amendments, established by the Public Company
Accounting Oversight Board ("PCAOB"), a material weakness is a deficiency or
combination of deficiencies that results more than a remote likelihood that a
material misstatement of annual or interim financial statements will not be
prevented or detected. In connection with the assessment described above,
management identified the following control deficiencies that represent material
weaknesses as of February 29, 2008:  (1) Lack of an independent
audit committee.  Although we have an audit committee it is not comprised
solely of independent directors.  We may establish an audit committee
comprised solely of independent directors when we have sufficient capital
resources and working capital to attract qualified independent directors and to
maintain such a committee.  (2) Inadequate staffing and
supervision within our bookkeeping operations. The relatively small number of
people who are responsible for bookkeeping functions prevents us from
segregating duties within our internal control system. The inadequate
segregation of duties is a weakness because it could lead to the ultimate
identification and resolution of accounting and disclosure matters or could lead
to a failure to perform timely and effective reviews which may result in a
failure to detect errors in spreadsheets, calculations, or assumptions used to
compile the financial statements and related disclosures as filed with the
Securities and Exchange Commission.  (3) Insufficient number of
independent directors.  At the present time, our Board of Directors does
not consist of a majority of independent directors, a factor that is counter to
corporate governance practices as set forth by the rules of various stock
exchanges.  Our management determined that these
deficiencies constituted material weaknesses.  Due to a lack of financial
and personnel resources, we are not able to, and do not intend to, immediately
take any action to remediate these material weaknesses.  We will not be
able to do so until we acquire sufficient financing and staff to do so.  We
will implement further controls as circumstances, cash flow, and working capital
permit.  Notwithstanding the assessment that our ICFR was not effective and
that there were material weaknesses as identified in this report, we believe
that our consolidated financial statements contained in our Annual Report on
form 20-F for the fiscal year ended February 29, 2008, fairly present our
financial position, results of operations and cash flows for the years covered
thereby in all material respects.  This Annual Report does not include an
attestation report of our independent registered public accounting firm
regarding internal control over financial reporting. Managements report was not
subject to attestation by our independent registered public accounting firm
pursuant to temporary rules of the SEC that permit us to provide only
managements report in this Annual Report.  There were no changes in our internal
control over financial reporting during the quarter ended February 29, 2008,
that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.  ITEM 16. [RESERVED]  ITEM 16(A). AUDIT COMMITTEE
FINANCIAL EXPERT  Mr. Patrick Forseille is serving as the
Audit Committee Financial Expert.  Mr. Forseille as an officer of the
corporation is not an independent expert. See Item 6A Directors and Senior
Management for Mr. Forseilles qualifications.  ITEM 16(B). CODE OF ETHICS  The Company has not yet adopted a code of
ethics but is in the process of evaluating and adopting such code.  ITEM 16(C). PRINCIPAL ACCOUNTANT
FEES AND SERVICES  Audit Fees  The following auditing fees have been paid
in the last two years:   2007--$22,000
    2008---$30,000  Audit Related Fees  The following auditing related fees have
been paid in the last two years:  None  30   Tax Fees  The following tax fees have been paid in
the last two years:  2007---$2,400
     2008---$6,000  All other Fees  All other fees for products and services
performed by the principal accountant for the last two years:  2007--$nil
   2008-$12,000  It is the Audit Committees policy to:  i. In accordance with
Section 10A(i) of the Securities Exchange Act of 1934 either:   A. Before the accountant
is engaged by the issuer or its subsidiaries, or the registered investment
company or its subsidiaries, to render audit or non-audit services, the
engagement is approved by the issuer's or registered investment company's audit
committee; or   B. The engagement to
render the service is entered into pursuant to pre-approval policies and
procedures established by the audit committee of the issuer or registered
investment company, provided the policies and procedures are detailed as
to the particular service and the audit committee is informed of each service
and such policies and procedures do not include delegation of the audit
committees responsibilities under the Securities Exchange Act of 1934 to
management; or   C. With respect to the
provision of services other than audit, review or attest services the
pre-approval requirement is waived if:   1. The aggregate amount
of all such services provided constitutes no more than five percent of the total
amount of revenues paid by the audit client to its accountant during the fiscal
year in which the services are provided;   2. Such services were not
recognized by the issuer or registered investment company at the time of the
engagement to be non-audit services; and   3. Such services are
promptly brought to the attention of the audit committee of the issuer or
registered investment company and approved prior to the completion of the audit
by the audit committee or by one or more members of the audit committee who are
members of the board of directors to whom authority to grant such approvals has
been delegated by the audit committee.  Less than 10% of the Audit Related, Tax and Other Accountant fees
were approved by the Audit Committee under section i(c) above.  ITEM 16(D). EXEMPTION FROM THE
LISTING STANDARDS FOR AUDIT COMMITTEES  Not applicable.  ITEM 16(E). PURCHASES OF EQUITY
SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS  Not applicable.  ITEM 17. FINANCIAL STATEMENTS  The Company's financial statements are
stated in Canadian Dollars (CDN$) and are prepared in accordance with Canadian
Generally Accepted Accounting Principles (GAAP), the application of which, in
the case of the Company, conforms in all material respects for the periods
presented with United States GAAP, except as discussed in footnotes to the
financial statements.  The financial statements as required under
ITEM #17 are attached hereto and found immediately following the text of this
Annual Report.  The interim financial statements do not vary materially
from US GAAP.  31   A. Audited Financial
Statements  Auditor's Report, dated
6/17/2008  Consolidated Balance
Sheets at 2/28/2007 and 2/29/2008  Consolidated Statements
of Operations and Deficit for
the years ended 2/29/2008, 2/28/2007, and 2/28/2006  Consolidated Statements
of Cash Flows for
the years ended 2/29/2008, 2/28/2007, and 2/28/2006  Notes to Consolidated
Financial Statements  ITEM 18. FINANCIAL STATEMENTS  The Company has elected to provide
financial statements pursuant to ITEM #17.  Not Applicable.  ITEM 19. EXHIBITS  See Exhibit Index.  32      HORIZON INDUSTRIES LTD.   CONSOLIDATED FINANCIAL STATEMENTS   FEBRUARY 29, 2008     F-1    DAVIDSON &
COMPANY LLP
A Partnership of Incorporated
ProfessionalsChartered
Accountants  INDEPENDENT AUDITORS REPORT   To the Shareholders of Horizon Industries Ltd.  We have audited the consolidated balance
sheets of Horizon Industries Ltd. as at February 29, 2008 and February 28, 2007
and the consolidated statements of operations and deficit and cash flows for the
years ended February 29, 2008 and February 28, 2007 and 2006. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.  We conducted our audits in accordance with
Canadian generally accepted auditing standards and with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform an audit to obtain reasonable assurance whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation.  In our opinion, these consolidated
financial statements present fairly, in all material respects, the financial
position of the Company as at February 29, 2008 and February 28, 2007 and the
results of its operations and cash flows for the years ended February 29, 2008
and February 28, 2007 and 2006 in accordance with Canadian generally accepted
accounting principles.  DAVIDSON & COMPANY LLP  Vancouver, Canada
Chartered AccountantsJune 17, 2008  COMMENTS BY AUDITORS FOR U.S. READERS ON CANADA  U.S.
REPORTING DIFFERENCE  In the United States, reporting standards
for auditors require the addition of an explanatory paragraph (following the
opinion paragraph) when the financial statements are affected by conditions and
events that cast substantial doubt on the Company's ability to continue as a
going concern, such as those described in Note 1 to the financial statements.
 Our report to the shareholders dated June 17, 2008 is expressed in
accordance with Canadian reporting standards which do not permit a reference to
such events and conditions in the auditors' report when these are adequately
disclosed in the financial statements.  DAVIDSON & COMPANY LLP  Vancouver, Canada
Chartered AccountantsJune 17, 2008  F-2   HORIZON INDUSTRIES
LTD. CONSOLIDATED BALANCE SHEETS AS AT  February 29,
2008

February 28, 2007ASSETSCurrentCash
$
130,081
$
341,148Prepaid
deposits

437

11,097Amounts
receivable

18,770

11,200149,288

363,445Petroleum and natural gas
properties (Note 3)

556,782

1,250,029$
706,070
$
1,613,474LIABILITIES AND SHAREHOLDERS
EQUITYCurrentAccounts
payable and accrued liabilities
$
5,057
$
627,427Asset retirement obligation(Note 4)

4,391

-9,448

627,427Shareholders equityShare capital
(Note 5)

5,152,693

3,854,405Contributed
surplus (Note 5c)

367,716

288,059Deficit

(4,823,787)

(3,156,417)696,622

986,047$
706,070
$
1,613,474  Nature and continuance of operations (Note 1) Commitments (Note 8) Subsequent event (Note 11)  On behalf of the Board:Chris Wensley
Director
Patrick Forseille
DirectorChris Wensley

Patrick Forseille  The accompanying notes are an integral part
of these consolidated financial statements.  F-3   HORIZON INDUSTRIES
LTD. CONSOLIDATED STATEMENTS OF OPERATIONS AND DEFICIT YEAR ENDED  February 29, 2008

February 28, 2007

February 28, 2006OIL AND GAS REVENUES
$
163,283
$
137,196
$
-DIRECT COSTSDepletion

242,437

47,404

-Direct
expenses

151,130

108,362

6,651393,567

155,766

6,651(230,284)

(18,570)

(6,651)EXPENSESAccretion

399

-

-Bad
debts

32,776

-

-Bank
and interest charges

885

22,846

3,694Consulting
fees

199,358

161,609

80,645Foreign
exchange loss

-

3,205

6,876Financing
charges

-

27,500

8,500Office
and administration

47,733

57,250

52,669Professional
fees

153,185

106,604

97,484Regulatory
fees and transfer agent

22,753

24,952

16,369Rent

61,265

55,425

50,859Shareholder
communications

130,618

138,200

85,130Stock
option expense

75,159

162,537

101,433Travel

48,988

10,927

2,952(773,119)

(771,055)

(506,611)Loss before other items

(1,003,403)

(789,625)

(513,262)OTHER ITEMSRent income

22,600

-

-Write-off of petroleum and natural
gas properties (Note 3)

(686,567)

-

(917,317)Gain on extinguishment of
debt

-

61,343

-(663,967)

61,343

(917,317)Loss for the year before income taxes

(1,667,370)

(728,282)

(1,430,579)Future income tax recovery

-

55,427

-Loss for the year

(1,667,370)

(672,855)

(1,430,579)Deficit, beginning of year

(3,156,417)

(2,483,562)

(1,052,983)Deficit, end of year
$
(4,823,787)
$
(3,156,417)
$
(2,483,562)Basic and diluted loss per common share
$
(0.08)
$
(0.04)
$
(0.11)Weighted average number of common shares
outstanding

21,780,705

16,754,935

13,330,102  The accompanying notes are an integral part
of these consolidated financial statements.  F-4   HORIZON INDUSTRIES
LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS YEAR ENDED  February 29,
2008

February 28, 2007

February 28, 2006CASH FLOWS FROM OPERATING ACTIVITIESLoss for the year
$
(1,667,370)
$
(672,855)
$
(1,430,579)Items not affecting cash:Accretion

399

-Bad debts

32,776

-Deferred financing fees

-

27,500

2,500Depletion

242,437

47,404

-Stock-based compensation

75,159

162,537

101,433Future income tax
recovery

-

(55,427)

-Gain on extinguishment of
debt

-

(61,343)

-Write-off of resource
properties

686,567

-

917,317Changes in non-cash working capital
items:(Increase) decrease in amounts
receivable

(40,346)

3,865

(14,667)Decrease in prepaid
expenses

10,660

5,628

(1,035)Increase in accounts payable
and accrued liabilities

88,509

173,617

(58,022)Net cash used in operating
activities

(571,209)

(369,074)

(483,053)CASH FLOWS FROM FINANCING ACTIVITIESRepayment of note
payable

-

(6,235)

(11,315)Proceeds from issue of share
capital, net of issuance costs

1,290,370

959,603

669,788Convertible loan

-

-

200,000Net cash provided by financing
activities

1,290,370

953,368

858,473CASH FLOWS FROM INVESTING ACTIVITIESExpenditures on petroleum and
natural gas properties

(930,228)

(372,767)

(289,080)Net cash used in investing
activities

(930,228)

(372,767)

(289,080)Increase (decrease) in cash position during the
year

(211,067)

211,527

86,340Cash, beginning of year

341,148

129,621

43,281Cash, end of year
$
130,081
$
341,148
$
129,621  Supplemental disclosures with respect to
cash flows (Note 7)  The accompanying notes are an integral part
of these consolidated financial statements.   F-5   HORIZON INDUSTRIES
LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FEBRUARY 29, 2008   1. NATURE AND
CONTINUANCE OF OPERATIONS  The Company was
incorporated in British Columbia on February 24, 1997 as J.P.T. Resources Ltd.,
and changed its name to Horizon Industries Ltd. on June 7, 1999. The Company is
engaged in the exploration and development of petroleum and natural gas
properties.  On December 22, 2003,
the Company formed a wholly-owned subsidiary, Horizon Industries (USA), Ltd.,
which was incorporated in the State of Nevada.  The Company is in the
process of exploring its petroleum and natural gas properties and has yet to
determine whether its properties contain reserves that are economically
recoverable. The recoverability of amounts shown for petroleum and natural gas
properties is dependent upon the discovery of economically recoverable reserves,
the ability of the Company to obtain the necessary financing to complete
exploration and development of its properties, confirmation of the Companys
interest in the underlying permits and licenses, and future profitable
production or proceeds from the disposition of the Companys properties.  These consolidated
financial statements have been prepared assuming the Company will continue on a
going-concern basis. The Company has incurred losses since inception and the
ability of the Company to continue as a going-concern depends upon its ability
to develop profitable operations and to continue to raise adequate
financing.  There can be no
assurance that the Company will be able to continue to raise funds, in which
case the Company may be unable to meet its obligations. Should the Company be
unable to realize its assets and discharge its liabilities in the normal course
of business, the net realizable value of its assets may be materially less than
the amounts recorded on the balance sheets.  2. SIGNIFICANT
ACCOUNTING POLICIES  Use of estimates  The
preparation of financial statements in conformity with Canadian generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.  Principles of
consolidation  These consolidated
financial statements include the accounts of the Company and its wholly owned
subsidiary, Horizon Industries (USA) Ltd. Significant inter-company transactions
have been eliminated upon consolidation.  Foreign currency
translation  The Companys foreign
operations are of an integrated nature. Monetary assets and liabilities are
translated at the exchange rate in effect at the balance sheet date and
non-monetary assets and liabilities are translated at historical exchange rates.
Revenue and expenses are translated at rates of exchange prevailing on the dates
of the underlying transaction. Gains or losses on translation are included in
the determination of net earnings.  F-6   HORIZON INDUSTRIES
LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FEBRUARY 29, 2008   2. SIGNIFICANT
ACCOUNTING POLICIES (contd)  Petroleum and
natural gas properties  The Company utilizes the full cost method to account for its
investment in oil and gas properties. Under thismethod, all costs of acquisition, exploration and development of oil and
gas reserves, including such costs as leasehold acquisition costs, geological
expenditures, tangible and intangible development costs and direct internal
costs, are capitalized as incurred. The cost of the oil and gas properties with
proved reserves will be depleted and charged to operations using the
unit-of-production method based on the ratio of current production to estimated
proved oil and gas reserves.  Costs directly associated with the acquisition and evaluation of
unproved properties are excluded from the depletion computation until it is
determined whether or not proved reserves can be assigned to the properties or
whether impairment has occurred. If the results of an annual assessment indicate
that the properties are impaired, the amount of the impairment along with the
costs of drilling exploratory dry holes and geological and geophysical costs
that cannot be directly associated with specific unevaluated properties are
added to the capitalized costs subject to depletion. Should the Company not have
properties with proven reserves, these costs are charged to operations for the
year.  In applying the full cost method, the Company performs an annual
cost centre impairment (ceiling test). The Company tests each cost centre for
recoverability by comparing the carrying value of capital costs to the
undiscounted cash flows expected to result from its use and eventual
disposition. The calculation of future net revenues is based on reasonable
estimates of future oil and gas prices and costs. Unproved properties are
included in the cost centre impairment test by adding the cost of the unproved
property, less any impairment, to the estimated future cash flow for the cost
centre. An impairment loss is recognized when the carrying amount of a cost
centre is not recoverable and is measured as the amount by which the carrying
amount of the assets capitalized in a cost centre exceeds the sum of the fair
value of proved and probable reserves plus costs, less any impairment, of
unproved properties.  Any amounts recorded for depletion and amortization of oil and gas
properties and equipment and any provision for future site restoration and
abandonment costs are based on estimates. The ceiling test is based on estimates
of proved reserves, production rates, oil and gas prices, future costs and other
relevant assumptions. By their nature, these estimates are subject to
measurement uncertainty and the effect on the financial statements of changes in
such estimates in future periods could be significant.  Asset retirement
obligations  The Company recognizes
the fair value of a liability for an asset retirement obligation in the year in
which it is incurred when a reasonable estimate of fair value can be made. The
carrying amount of the related long-lived asset is increased by the same amount
as the liability.  Changes in the
liability for an asset retirement obligation due to the passage of time will be
measured by applying an interest method of allocation. The amount will be
recognized as an increase in the liability and an accretion expense in the
statement of operations. Changes resulting from revisions to the timing or the
amount of the original estimate of undiscounted cash flows are recognized as an
increase or a decrease in the carrying amount of the liability for an asset
retirement obligation and the cost of the related long-lived asset.         F-7   HORIZON INDUSTRIES
LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FEBRUARY 29, 2008   2. SIGNIFICANT
ACCOUNTING POLICIES (contd)  Future income
taxes  Future income taxes are
calculated using the asset and liability method. Under the asset and liability
method, future tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Future tax assets and liabilities are measured using the enacted or
substantively enacted tax rates expected to apply when the asset is realized or
the liability settled. The effect on future tax assets and liabilities of a
change in tax rates is recognized in income in the period that substantive
enactment or enactment occurs. To the extent that the Company does not consider
it more likely than not that a future tax asset will be recovered, it provides a
valuation allowance against the excess.  Loss per
share  The Company uses the
treasury stock method to compute the dilutive effect of options, warrants and
similar instruments. Under this method the dilutive effect on loss per share is
recognized on the use of the proceeds that could be obtained upon exercise of
options, warrants and similar instruments. It assumes that the proceeds would be
used to purchase common shares at the average market price during the year. For
the years presented the dilutive effect has not been computed as it proved to be
anti-dilutive.  Basic loss per share is
calculated using the weighted-average number of common shares outstanding during
the year.  Stock-based
compensation  The Company recognizes
compensation expense for all stock options granted, using the fair value based
method of accounting. Any cash paid on the exercise of stock options is added to
the stated value of common shares.  Revenue
recognition  Revenue from the sale
of petroleum and natural gas products is recognized upon the passage of title
and when ultimate collection is reasonably assured, and is recorded net of
royalties and severance taxes.  Comparative
figures  Comparative figures
have been reclassified, where applicable, to conform with the current years
presentation.   Change in accounting
policy   Financial
instruments  Effective March 1,
2007, the Company adopted the new recommendations of the Canadian Institute of
Chartered Accountants (CICA) under CICA Handbook Section 1530 Comprehensive
Income (Section 1530), Section 3251 Equity, Section 3855 Financial
Instruments  Recognition and Measurement (Section 3855), Section 3861
Financial Instruments  Disclosure and Presentation and Section 3865 Hedges.
These new sections, which apply to fiscal years beginning on or after October 1,
2006, provide requirements for the recognition and measurement of financial
instruments and on the use of hedge accounting. Section 1530 establishes
standards for reporting and presenting comprehensive income which is defined as
the change in equity from transactions and other events from non-owner sources.
Other comprehensive income refers to items recognized in comprehensive income
but that are excluded from net income calculated in accordance with Canadian
generally accepted accounting principles.  F-8   HORIZON INDUSTRIES
LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FEBRUARY 29, 2008   2. SIGNIFICANT
ACCOUNTING POLICIES (contd)  Change in accounting
policy(contd)  Financial
instruments (contd)  Under Section 3855, all
financial instruments are classified into one of five categories:
held-for-trading, held-to-maturity investments, loans and receivables,
available-for-sale financial assets or other financial liabilities. All
financial instruments and derivatives are measured in the balance sheet at fair
value except for loans and receivables, held-to maturity investments and other
financial liabilities which are measured at amortized cost. Subsequent
measurement and changes in fair value will depend on their initial
classification as follows: (1) held-for-trading financial assets are measured at
fair value and changes in fair value are recognized in net income; (2)
available-for-sale financial instruments are measured at fair value with changes
in fair value recorded in other comprehensive income until the instrument is
derecognized or impaired; and (3) all derivative instruments, including embedded
derivatives, are recorded in the balance sheet at fair value unless they qualify
for the normal sale normal purchase exemption and changes in their fair value
are recorded in income unless cash flow hedge accounting is used, in which case
changes in fair value are recorded in other comprehensive income.  As a result of the
adoption of these new standards, the Company has classified its cash as
held-for-trading. Receivables are classified as loans and receivables. Accounts
payable and accrued liabilities are classified as other financial liabilities,
all of which are measured at amortized cost. The Company has elected to measure
all derivatives and embedded derivatives at fair value and the Company has
maintained its policy not to use hedge accounting.  Section 3855 also
provides guidance on accounting for transaction costs incurred upon the issuance
of debt instruments or modification of a financial liability. Transaction costs
are now deducted from the financial liability and are amortized using the
effective interest method over the expected life of the related liability.  As a result of the
application of Section 3855, there was no effect on the Companys deficit
position as at March 1, 2007.  Future accounting
changes  Effective March 1,
2008, the Company will adopt new CICA standards relating to assessing going
concern, capital disclosures and financial instruments disclosure and
presentation, and, effective March 1, 2009, a standard relating to goodwill and
intangible assets. The Company is currently assessing the impact of these new
accounting standards on its consolidated financial statements.  Capital disclosures
(Section 1535)  This standard
establishes standards for the disclosure of (i) an entitys objectives, policies
and processes for managing capital; (ii) quantitative data about what the entity
regards as capital; (iii) whether the entity has complied with any capital
requirements and (iv) if it has not complied, the consequences of such
non-compliance.  Financial
instruments  disclosures (Section 3862) and financial instruments 
presentation (Section 3863)  These two standards
replace the current standard Financial Instruments Disclosure and
Presentation (Section 3861), revising and enhancing its disclosure
requirements, and carrying forward unchanged its presentation requirements.
These new Sections place increased emphasis on disclosures about the nature and
extent of risks arising from financial instruments and how the entity manages
those risks.  F-9   HORIZON INDUSTRIES
LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FEBRUARY 29, 2008   2. SIGNIFICANT
ACCOUNTING POLICIES (contd)  Future accounting
changes(contd)  Goodwill and
intangible assets (Section 3064)  This new standard
replaces the current standard for goodwill and intangible assets, Section
3062,and establishes revised standards for the recognition, measurement,
presentation and disclosure of goodwill and intangible assets. The new standard
also provides guidance for the treatment of pre-production and start-up costs
and requires that these costs be expensed as incurred.  Assessing going
concern (Section 1400)  The AcSB amended CICA
Handbook Section 1400, to include requirements for management to assess and
disclose an entitys ability to continue as a going concern. The section applies
to interim and annual financial statements relating to fiscal years beginning on
or after January 1, 2008.  International
financial reporting standards (IFRS)  In 2006, the Canadian
Accounting Standards Board (AcSB) published a new strategic plan that will
significantly affect financial reporting requirements for Canadian companies.
The AcSB strategic plan outlines the convergence of Canadian GAAP with IFRS over
an expected five year transitional period. In February 2008, the AcSB announced
that 2011 is the changeover date for publicly-listed companies to use IFRS,
replacing Canadas own GAAP. The date is for interim and annual financial
statements relating to fiscal years beginning on or after January 1, 2011. The
transition date of March 1, 2011 will require the restatement for comparative
purposes of amounts reported by the Company for the year ended February 28,
2011. While the Company has begun assessing the adoption of IFRS for 2011, the
financial reporting impact of the transition to IFRS cannot be reasonably
estimated at this time.  3. PETROLEUM AND
NATURAL GAS PROPERTIES  2008

2007Balance, beginning of year
$
1,250,029
$
503,063Proved properties 
additions

444,441

542,389Unproved properties
 additions (recovery)

(208,685)

251,981Depletion during
the year

(242,436)

(47,404)Write off of oil
and gas properties

(686,567)

-Balance, end of year
$
556,782
$
1,250,029  The Companys producing
oil and gas properties are located within the state of Texas, USA. As at
February 29, 2008, the oil and gas properties include $293,878 relating to
unproved properties that have been excluded from the depletion calculation.
During the year, the Company abandoned certain unproved properties, and
accordingly the costs relating to the properties were written-off to operations,
in the amount of $222,481.  F-10   HORIZON INDUSTRIES
LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FEBRUARY 29, 2008   3. PETROLEUM AND
NATURAL GAS PROPERTIES(contd)  The full cost ceiling
test results as of February 29, 2008 resulted in an impairment of evaluated oil
and gas properties of $464,086.  The future prices used in the February 29,
2008 ceiling test are as follows:  Oil
(Cdn $/MMbtu)2009
$
11.212010

10.412011

10.112012

10.012013

10.03  4. ASSET RETIREMENT
OBLIGATION  2008

2007Asset retirement obligation 
beginning of year
$
-
$
-Liabilities incurred

3,992

-Accretion expense

399

-Asset retirement obligation  end of
year
$
4,391
$
-  The total undiscounted
amount of estimated cash flows required to settle the obligations is $5,400,
which was adjusted for inflation at the rate of 2% and then discounted at 10%.
 Certain minimum amounts of asset retirement obligations will occur each
year with the significant amounts to be paid on closure of the wells.  5. SHARE CAPITAL  a) Authorized capital
stock: Unlimited common shares without par value  F-11   HORIZON INDUSTRIES
LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FEBRUARY 29, 2008   5. SHARE CAPITAL(contd)  b) Common shares issued
and outstanding:  Number
of Shares

Share
Capital

Contributed
SurplusBalance, February 28, 2005
9,600,000
$
1,753,880
$
63,800Issued by private placement
4,962,000

897,620

-Issued on exercise of stock options
150,000

27,286

(6,286)Issued for debt settlement
182,250

27,350

-Stock-based compensation
-

-

101,433Less:  share issuance costs
-

(19,332)

-Balance, February 28, 2006
14,894,250

2,686,804

158,947Private placement
1,570,000

459,000

-Issuance of shares for debt
575,000

230,000

-Exercise of warrants
1,785,000

451,100

-Exercise of options
270,000

86,374

(33,425)Renunciation of flow-through shares
-

(55,427)

-Stock-based compensation
-

-

162,537Share issuance costs
-

(3,446)

-Balance, February 28, 2007
19,094,250

3,854,405

288,059Private placement
5,720,750

1,295,400

-Exercise of warrants
190,000

47,500

-Exercise of options
45,000

11,688

(4,038)Shares issued for petroleum and natural gas
properties
38,800

12,416

-Share issuance costs
-

(68,716)

8,536Stock-based compensation
-

-

75,159Balance, February 29, 2008
25,088,800
$
5,152,693
$
367,716  During the year ended
February 29, 2008:  a) the Company completed a
non-brokered private placement of 3,025,000 units at $0.25 per unit for gross
proceeds of $756,250. Each unit consists of one common share and one common
share purchase warrant.  One share purchase warrant entitles the holder to
acquire one common share of the Company at $0.30 until September 25, 2007 and at
$0.35 until June 25, 2008.  Directors and officers of the Company purchased
150,000 units for total proceeds of $37,500.  In connection with the
private placement, 192,000 finders warrants were issued, exercisable at a price
of $0.30 per share for a period of one year. The fair  value of the
finders warrants, being $8,536, was determined using the Black-Scholes option
pricing model, with a volatility of 58.42%, risk free rate of 4%, expected life
of one year and a dividend rate of 0%.  b) the Company completed a
non-brokered private placement of 2,695,750 units at $0.20 per unit for gross
proceeds of $539,150.  Each unit consists of one common share and one
common share purchase warrant.  One share purchase warrant entitles the
holder to acquire one common share of the Company at $0.30 until December 27,
2009.  Directors and officers of the Company purchased 50,000 units for
total proceeds of $10,000.  F-12   HORIZON INDUSTRIES
LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FEBRUARY 29, 2008   5. SHARE CAPITAL (contd)  During the year ended
February 28, 2007:  a) the Company completed a
non-brokered private placement of 1,470,000 units at $0.30 per unit for gross
proceeds of $441,000. Each unit consists of one common share and one common
share purchase warrant. One share purchase warrant entitles the holder to
acquire one common share of the Company at $0.35 per share for two years to May
5, 2008. Directors and officers of the Company purchased 131,500 units for total
proceeds of $39,450.  b) the Company completed a
non-brokered private placement of 100,000 units at $0.18 per unit for gross
proceeds of $18,000. Each unit consists of one common share and one common share
purchase warrant. One share purchase warrant entitles the holder to acquire one
common share of the Company at $0.25 per share for one year to March 10,
2007.  Stock options  The Company has a stock
option plan under which it is authorized to grant options to directors,
employees and consultants enabling them to acquire up to 10% of the issued and
outstanding common shares of the Company.  Under the plan, the exercise
price of each option equals the market price, minimum price, or a discounted
price of the Company's shares as calculated on the date of grant.  The
options can be granted for a maximum term of 5 years.  Vesting terms are
determined by the board of directors at the time of grant.  Stock option
transactions and the number of stock options outstanding are summarized as
follows:  Number of Options

Weighted Average Exercise
PriceOutstanding, February 28, 2005
770,000
$
0.30Granted
915,000

0.20Exercised
(150,000)

0.14Cancelled
(540,000)

0.32Outstanding, February 28, 2006
995,000

0.22Granted
995,000

0.31Exercised
(270,000)

0.22Cancelled
(205,000)

0.28Outstanding, February 28, 2007
1,515,000

0.27Granted
425,000

0.36Cancelled /
expired
(200,000)

0.34Exercised
(45,000)

0.17Outstanding, February 29, 2008
1,695,000
$
0.30Options exercisable, February 29,
2008
1,695,000
$
0.30   F-13   HORIZON INDUSTRIES
LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FEBRUARY 29, 2008   5. SHARE CAPITAL (contd)  Stock options(contd)  The following stock
options were outstanding at February 29, 2008:  Number
of options

Exercise
Price

Expiry Date25,000
$
0.32

August 4, 200880,000

0.30

August 3, 2009100,000

0.20

March 15, 2010145,000

0.17

October 6, 2010100,000

0.25

December 5, 201050,000

0.20

January 31, 2011420,000

0.30

April 12, 2011250,000

0.30

October 5, 2011100,000

0.35

January 18, 2012100,000

0.35

January 29, 201250,000

0.33

August 30, 2012275,000

0.35

September 30,
2012  Stock-based
compensation  Compensation costs have
been determined based on the fair value of the options at the grant date using
the Black-Scholes option-pricing model.  During the year ended
February 29, 2008, the Company granted 425,000 (2007  995,000; 2006  915,000)
stock options. Stock-based compensation expense using the Black-Scholes option
pricing model was $75,159 (2007 - $162,537; 2006 - $101,433) which was also
recorded as contributed surplus on the balance sheet.  The weighted average
fair value of the options granted was $0.17 (2007 - $0.16; 2006 - $0.22) per
option.  The following
assumptions were used for the Black-Scholes valuation of stock options
granted:  2008
2007
2006Risk-free interest rate
4.00%
4.00%
3.77%Expected life of options
4.6 years
4  years
5 yearsAnnualized volatility
68.67%
73.26%
69.91%Dividend rate
0.00%
0.00%
0.00%  F-14   HORIZON INDUSTRIES
LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FEBRUARY 29, 2008   5. SHARE CAPITAL (contd)  Share purchase
warrants  Warrant transactions and
the number of warrants outstanding are summarized as follows:  Number of Warrants

Weighted average exercise
priceOutstanding, February 28, 2005
3,010,000
$
0.31Granted
2,770,000

0.25Cancelled
(3,010,000)

0.31Outstanding, February 28, 2006
2,770,000

0.25Granted
1,570,000

0.34Exercised
(1,785,000)

0.25Cancelled
(20,000)

0.20Outstanding, February 28, 2007
2,535,000

0.33Granted
5,912,750

0.33Cancelled / expired
(975,000)

0.32Exercised
(190,000)

0.25Outstanding, February 29, 2008
7,282,750
$
0.33  At February 29, 2008,
the following share purchase warrants were outstanding:  Number of Shares

ExercisePrice
Expiry Date3,025,000
$
0.35
June 25, 20081,370,000

0.35
May 5, 2008192,000

0.30
June 25, 20082,695,750

0.30
December 27,
2009  6. RELATED PARTY
TRANSACTIONS AND BALANCES  The Company entered
into the following transactions with related parties:  a) Paid or accrued
consulting fees of $115,586 (2007 - $108,565; 2006 - $70,870) to a director and
officer of the Company for services during the year.  F-15   HORIZON INDUSTRIES
LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FEBRUARY 29, 2008   6. RELATED PARTY
TRANSACTIONS AND BALANCES  b) Paid
or accrued professional fees of $72,000 (2007 - $67,000; 2006 - $44,000) to a
director and officer of the Company for services during the year.  c) Charged rent of $3,400
(2007 - $Nil; 2006 - $Nil) to directors and officers of the Company.  Included in accounts
payable as at February 29, 2008 is $2,843 (2007 - $nil) due to a director of the
Company. Included in amounts receivable is $2,538 (2007 - $Nil) due from an
officer of the Company.  The amounts charged to
the Company for the services provided have been determined by negotiation among
the parties and, in certain cases, are covered by signed agreements. These
transactions were in the normal course of operations and were measured at the
exchange value, which represented the amount of consideration established and
agreed to by the related parties.  7. SUPPLEMENTAL DISCLOSURE WITH
RESPECT TO CASH FLOWS  2008

2007

2006Cash paid during the year for
interest
$
-
$
-
$
-Cash paid during the year for income
taxes
$
-
$
-
$
-  The significant non-cash
transactions for the year ended February 29, 2008 were as follows:  a) The issuance of 38,800
common shares valued at $12,416 for petroleum and natural gas properties.  b) The Company recorded a
write-off of petroleum and natural gas properties in the amount of $686,567.  c) The accrual of $3,992
for asset retirement obligations with a corresponding increase to petroleum and
natural gas properties and $399 in accretion expense relating to the asset
retirement obligation.  d) The Company previously
accrued $204,960 for certain resource property expenses pursuant to an agreement
entered into in fiscal 2007. During the current year, the Company and the vendor
mutually agreed to terminate the agreement and as a result, the accrual of
$204,960 was reversed in the current year.  e) The Company allocated
$4,038 to share capital upon the exercise of stock options.  f) The Company issued
192,000 finders warrants with a fair value of $8,536 in connection with a
private placement (Note 5b).  The significant
non-cash transactions for the year ended February 28, 2007 were as follows:  a) The issuance of 575,000
common shares to settle $230,000 in convertible loans and related bonus fees  b) Included in oil and gas
expenditures was $505,919 of accounts payable.  F-16   HORIZON INDUSTRIES
LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FEBRUARY 29, 2008   7. SUPPLEMENTAL DISCLOSURE WITH
RESPECT TO CASH FLOWS (cont'd...)  The significant non-cash
transaction for the year ended February 28, 2006 were:  a) Issuance of 182,250
common shares in settlement of $27,350 in accounts payable (Note 6b)  b) Oil and gas
expenditures of $84,316 recorded in accounts payable.  8. COMMITMENTS  a) The Company entered
into a three year agreement on November 1, 2005 with a director and officer for
consulting and administrative services to the Company for consideration of a
minimum of $8,500 per month plus GST, plus reimbursement of all traveling and
direct expenses incurred.  b) The Company entered
into a three year agreement on November 1, 2005 with a director and officer for
consulting and administrative services to the Company for consideration of a
minimum of $5,500 per month plus GST, plus reimbursement of all traveling and
direct expenses incurred.  c) The Company entered
into a five-year office space lease, expiring April 2010. The minimum annual
payment is $31,780 per year.  9. INCOME TAXES  A reconciliation of
income taxes (recovery) at statutory rates with the reported taxes is as
follows:  2008

2007

2006Loss before income taxes
$
(1,667,370)
$
(728,282)
$
(1,430,579)Expected income tax recovery
$
(561,620)
$
(248,490)
$
(547,726)Non-deductible expenses

112,133

48,665

96,927Write-off of oil and gas
properties

231,256

10,236

351,213Differences in foreign tax
rates

-

-

27,856Unrecognized benefits of non-capital
losses

218,231

134,162

71,730Total income taxes (recovery)
$
-
$
(55,427)
$
-   F-17   HORIZON INDUSTRIES
LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FEBRUARY 29, 2008   9. INCOME TAXES
(cont'd...)  Details of future income
tax assets are as follows:  2008

2007Resource deductions
$
301,900
$
138,000Financing costs

15,400

7,400Non-capital losses available for
future periods

838,100

584,6001,155,400

730,000Valuation allowance

(1,155,400)

(730,000)Net future income tax assets
$
-
$
-  The Company has
non-capital losses of approximately $3,224,000 which may be carried forward and
applied against taxable income in future years.  These losses, if
unutilized, will expire through to 2028.  Subject to certain restrictions,
the Company has further resource development and exploration expenditures
totalling approximately $1,718,000 available to reduce taxable income of future
years.  The future income tax benefits of these losses, resource deductions
and other tax assets have not been reflected in these financial statements and
have been offset by a valuation allowance.  10. SEGMENTED
INFORMATION  The Company operates in
one reportable operating segment, being petroleum and natural gas exploration
and development and production.  All of the Companys petroleum and natural
gas exploration properties are located in the United States. All other assets
and expenses are in Canada.  11. SUBSEQUENT
EVENT  Subsequent to February
29, 2008, the Company completed a non-brokered private placement of 2,030,000
units at $0.10 per unit for gross proceeds of $203,000.  Each unit consists
of one common share and one common share purchase warrant. One share purchase
warrant entitles the holder to acquire one common share of the Company at $0.20
until May 27, 2009.  F-18   HORIZON INDUSTRIES
LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FEBRUARY 29, 2008   12. DIFFERENCES BETWEEN
CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES  These consolidated
financial statements have been prepared in accordance with generally accepted
accounting principles in Canada (Canadian GAAP). Material variations in the
accounting principles, practices and methods used in preparing these
consolidated financial statements from principles, practices and methods
accepted in the United States (United States GAAP) are described and
quantified below.  Consolidated financial statement
balances under United States GAAP  2008

2007Consolidated balance sheetsTotal assets under Canadian GAAP and United States
GAAP
$
706,070
$
1,613,474Total liabilities under Canadian GAAP and United
States GAAP
$
9,448
$
627,427Capital stock and contributed surplus under
Canadian GAAP

5,520,409

4,142,464Future income tax
recovery

-

55,427Flow-through share premium paid
in excess of market value

-

(25,080)Capital stock and contributed surplus under United
States GAAP

5,520,409

4,172,811Deficit under Canadian GAAP

(4,823,787)

(3,156,417)Future income tax
recovery

-

(55,427)Flow-through share premium paid
in excess of market value

-

25,080Deficit under United States GAAP

(4,823,787)

(3,186,764)Total shareholders' equity under United States
GAAP

696,622

986,047Total liabilities and shareholders' equity under
United States GAAP
$
706,070
$
1,613,474  F-19   HORIZON INDUSTRIES
LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FEBRUARY 29, 2008   12. DIFFERENCES BETWEEN
CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(contd)  Statements of
operations  The impact of the
differences between Canadian GAAP and United States GAAP on the statements of
operations would be as follows:  2008

2007

2006Loss for the year, Canadian
GAAP
$
(1,667,370)
$
(672,855)
$
(1,430,579)Adjustments:Future income
tax recovery

-

(55,427)

-Flow-through
share premium paid in excess of market value

-

-

25,080Loss for the year, United States
GAAP
$
(1,667,370)
$
(728,282)
$
(1,405,499)Basic and diluted loss per common
share, United States GAAP
$
(0.08)
$
(0.04)
$
(0.11)Weighted average number of common
shares outstanding,
United States
GAAP

21,780,705

16,754,935

13,330,102  Statements of cash
flows  There were no
significant differences between Canadian GAAP and United States GAAP on the
statements of cash flows.  Oil and gas properties  Under both United States and Canadian
GAAP, property, plant and equipment must be assessed for potential impairment.  Under Canadian GAAP, a
ceiling test is applied to ensure that capitalized costs for oil and gas
properties and equipment do not exceed the sum of estimated undiscounted, future
net revenues from proven reserves less the cost incurred or estimated to develop
those reserves, interest and general and administration costs, and an estimate
for restoration costs and applicable taxes. Effective January 1, 2004, the CICA
implemented a new pronouncement on impairment of long-lived assets, which
required the impairment loss as a result of the ceiling test to be measured as
the amount by which the carrying amount of the asset exceeds the expected future
cash flows discounted using a risk free interest rate.  Under United States
GAAP, costs accumulated in each cost center are limited to an amount equal to
the present value, discounted at 10%, of the estimated future net operating
revenues from proved reserves, net of restoration costs and income taxes. Under
United States GAAP an additional write-down was not required for the years ended
February 29, 2008 and February 28, 2007 and 2006.  F-20   HORIZON INDUSTRIES
LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FEBRUARY 29, 2008   12. DIFFERENCES BETWEEN
CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(contd)  Flow-through shares  Under Canadian income
tax legislation, the Company is permitted to issue shares whereby the Company
agrees to incur qualifying expenditures (as defined under the Income Tax Act of
Canada) and renounce the related income tax deductions to the investors.
 Under Canadian GAAP, flow-through shares are accounted for as part of the
issuance of capital stock at the price paid for the shares, net of any future
income tax liability.  Under United States GAAP, any difference between the
market price of the Company's stock and the fair value of the flow-through
shares must be recorded as a liability if a premium is paid by investors or as
an asset if investors are purchasing the shares at a discount.  The asset
or liability is charged to income as the flow-through share proceeds are
expended on qualifying expenditures.  During the 2008 fiscal
year, the Company did not issue any flow-through shares and accordingly there
was no difference between Canadian and United States GAAP.  During the year ended
February 28, 2006, the Company issued 627,000 flow-through shares for total
proceeds of $163,020.  As the market price of the Companys stock was less
than the fair value of the flow-through shares issued, a premium of $25,080 has
been recorded.  New accounting pronouncements  In September 2006, the
FASB issued SFAS No. 157, Fair Value Measurements. SFAS No. 157 establishes a
framework for measuring the fair value of assets and liabilities. This framework
is intended to provide increased consistency in how fair value determinations
are made under various existing accounting standards which permit, or in some
cases require, estimates of fair market value. SFAS No. 157 is effective for
fiscal years beginning after November 15, 2007, and interim periods within
those fiscal years. Earlier application is encouraged, provided that the
reporting entity has not yet issued financial statements for that fiscal year,
including any financial statements for an interim period within that fiscal
year.  FASB Staff Position
157-2 (FSP FAS 157-2) delayed the effective date of FAS 157 until fiscal years
beginning after November 15, 2008, and interim periods within those fiscal
years, for all non-financial assets and non-financial liabilities, except for
items that are recognized or disclosed at fair value in the financial statements
on a recurring basis (at least annually).  The adoption of FAS 157 is not
expected to have a material impact on the Companys consolidated financial
statements.  In February, 2007, the
FASB issued SFAS No. 159 The Fair Value Option for Financial Assets and
Financial Liabilities. SFAS No. 159 permits entities to choose to measure many
financial assets and financial liabilities at fair value. Unrealized gains and
losses on items for which the fair value option has been elected are reported in
earnings. SFAS No. 159 is effective for fiscal years beginning after November
15, 2007.  The Company is currently assessing the impact of SFAS No. 159 on
its consolidated financial position and results of operations.  F-21   HORIZON INDUSTRIES
LTD. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FEBRUARY 29, 2008   12. DIFFERENCES BETWEEN
CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
(contd)  New accounting pronouncements(contd)  In March 2008, the FASB
issued FAS No. 161, Disclosures about Derivative Instruments and Hedging
Activities (FAS 161). FAS 161 changes the disclosure requirements for
derivative instruments and hedging activities by requiring enhanced disclosures
about how and why an entity uses derivative instruments, how derivative
instruments and related hedged items are accounted for under FAS 133, and how
derivative instruments and related hedged items affect an entitys operating
results, financial position, and cash flows. FAS 161 is effective for fiscal
years beginning after November 15, 2008. Early adoption is permitted. The
Company is currently reviewing the provisions of FAS 161 and has not yet adopted
the statement. However, as the provisions of FAS 161 are only related to
disclosure of derivative and hedging activities, the Company does not believe
the adoption of FAS 161 will have a material impact on its consolidated
operating results, financial position, or cash flows.  F-22    SIGNATURES  The registrant hereby certifies that it
meets all of the requirements for filing on Form 20-F and that it has duly
caused and authorized the undersigned to sign this Annual Report on its
behalf.   Horizon Industries LTD.    By: /s/ Christopher J. Wensley Christopher J. Wensley Chief Executive Officer   Date: Sept. 10, 2008  i         INDEX TO EXHIBITSExhibitNumbers

EXHIBITS1.1*

Certificate and Articles of Continuance dated June
10, 19971.2*

Certificate and Articles of Amendment dated
December 12, 19981.3*

By-law No. 1 dated June 2, 19974.1*

Amended and Restated Stock Option Plan
(2006)15.1*

Consent of Davidson & Company
LLP  * Incorporated by reference to the
20-FR12G/A filed September 14, 2007.   ii