Prospectus re Admission to the Official List - Heritage Oil

RPS EnergyHeritage Oil – Competent Persons ReportFigure 17:Well P3 Production History27FEB200804271079Whist decline has clearly set in, it is very early in the producing life of the well and the field, and anydecline will change when water injection commences and downhole pumps are installed. The declinesobserved so far seem to be hyperbolic in nature, as might be expected under purely natural decline,although well P3 has been damaged as a result of killing the well to retrieve a packer during which thetubing fell downhole. This resulted in a bullhead kill.Permeability varies from 5 to 25 mD across the block and the initial well rates that will likely beencountered are 300 to 600 stb/d.As one of the measures to improve drilling performance and improve well performance by minimizing wellimpairment, Heritage intends to replace the current rig and contractor in order to improve drillingprocedures and avoid damaging the future wells—the new rig and contractor will arrive some time afterthe currently active well (P4).4.4.3. Development Plan (Subsurface)In May 27, 2007, the Russian authorities approved phase 1 of the development, consisting of reservoirstudies and early wells to establish the efficacy of a full field development (‘‘FFD’’) using an inverted5-spot pattern. The initial approval covers the drilling of up to 53 wells including 13 injection wells. Thatapproval permits ongoing development and production activities during which it is expected that in 2010the Company will present an evaluation of the results obtained and present its plan for furtherdevelopment. Whilst the FFD has not yet been approved we believe it is reasonably certain that suchapproval will be forthcoming.The long-term development plan is to drill a number of inverted 5-spot patterns, consisting of injectorsinside a ‘‘square’’ with a producer ion each corner of this square. Figure 18 illustrates how several of thesepatterns might look (source: Heritage).99