X0202 4 2004-10-22 0 0001015293 HOUSTON EXPLORATION CO THX 0001030191 KARNES JOHN H JR THE HOUSTON EXPLORATION COMPANY 1100 LOUISIANA, SUITE 2000 HOUSTON TX 77002-5215 0 1 0 0 Sr. VP and CFO common stock ($0.01 par value) 2004-10-22 4 A 0 5000 59.16 A 5000 D employee stock options (right to buy) 59.16 2004-10-22 4 A 0 11000 59.16 A 2005-10-22 2014-10-22 common stock 11000 89900 D Restricted shares were granted on October 22, 2004 pursuant to the Company's 2004 Long-Term Incentive Plan and are restricted from sale or transfer until fully vested. Restricted shares will vest if Employee continuously remains an employee of the Company or an Affiliate through the earlier of (i) five years from the date of grant or (ii) Employee?s continuous service as a Employee with the Company or an Affiliate terminates by reason of death, disability or retirement. Employee stock options vest in five equal annual installments beginning on the first anniversary of the grant date and expire 10 years from the grant. /s/ John H. Karnes 2004-10-26