Prospectus re Admission to the Official List - Heritage Oil

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RPS EnergyHeritage Oil – Competent Persons Report50,00045,00040,00035,000Gross Oil Rate (stb/d)30,00025,00020,00015,00010,0005,000027FEB2008043332262007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032Figure 24: 3P Production Profile for Zapadno ChumpasskoyeThe summary output from the three RPS cases, combined with the STOIIP estimates from 4.3, above isgiven in Table 20:1P 2P 3PSTOIIP (MMstb) .............................................. 90.3 233.0 419.0URR (11) (MMstb) .............................................. 24.9 64.4 172.8URR/well (MMstb) ............................................ 0.509 0.767 0.971Table 20: Summary of Results for Zapadno Chumpasskoye (12)This range of outcomes is reasonable for the range of reservoir quality expected to be encountered inthe block.Developmental RiskWe have categorised these volumes as reserves despite the absence of formal approval of the FFD as thereis a reasonable expectation that all required internal and external approvals will be forthcoming, and thereis evidence of firm intention to proceed with development within a reasonable time frame (as requiredunder SPE et al. guidelines).At this pre-production stage, there are developmental risks, in addition to the obvious reservoir risks.These risks, which may impact the timing and amount of future cash flow—all standard at this stage of adevelopment and by no means specific to for Zapadno Chumpasskoye—include but may not be limited tothe following: The timing and any conditions of the formal approval by the Russian authorities of the developmentplan efficient functioning of the facilities; The timing and operation of a replacement drilling rig; we note that Heritage is in receipt of acommercial tender for a superior rig; The timing, location and results of the numerous development wells to be drilled;(11) Ultimately Recoverable Resources—this may not be the finally quoted reserves (see economics section) if economic analysisterminates the profile before this cumulative is reached.(12) There are no commercial gas reserves as all gas is and will be used in the field for fuel, flare pilot and so on, with the remainderflared. We are not aware of any limitations to the volume of gas that can be flared.104
RPS EnergyHeritage Oil – Competent Persons ReportThe installation and commissioning of new facilities of appropriate size for the production, processingand transportation of the produced oil; (Heritage advise that CND’s plan is currently in front ofregulators for their approval)The raising of sufficient capital funds to cover these development costs.4.5. Facilities and CostsCommercial production commenced in 2007 on a small scale from two wells. The current plan is to drill upto 84 producers in the p50 case along with 46 Water Injection wells for reservoir support. Two drilling rigswill eventually be required with a planned 16 wells in years 2010 to 2012. The p50 Case is expected toproduce over 60 MMstb peaking at about 16,000 bopd in 2014. Capital expenditure (facilities costs) for themost likely case is estimated at US$180 MM including a 20 per cent. contingency. The 130 wells will bedrilled at a cost of average US$2 MM each. In the p10 case, with over 200 wells. RPS has assumed anadditional drilling rig is required from 2011. Production would be over 170 MMstb with a capitalexpenditure of over US$300 MM. Operating costs are assumed to be US$12 MM per annum during theplateau years plus a further US$1.5 MM per annum for G&A.5. UGANDA—BLOCKS 1 & 3A5.1. OverviewUgandan Block 3A is located in the south of Lake Albert and covers the southern part of the Ugandan sideof Lake Albert. Block 1 is located on land to the north of Lake Albert. Lake Albert is a largest lake in thenorthern sector of the Western Rift. The lake surface is approximately 618 m above sea level and its riftedmargins are more than 2,200 m above sea level in the west and more than 1,300 m in the east. Here, thegraben has an average width of 45 km and is approximately 190 km long. Whilst many of the Western Riftsegments contain deepwater lakes, such as Lake Malawi (750 m) and Lake Tanganyika (1,500 m), LakeAlbert has relatively shallow water depths (approximate maximum of 60 m) but is believed to have similarsediment thicknesses as the other lakes.The Albert Basin is the most petroleum prospective area in Uganda and is a classical active rift basin of theEast African Rift system.5.2. Data AvailableThe seismic database in Block 3A comprises 16 widely spaced 2D seismic lines of varying vintages2003-2005. The data quality in the northern half of the block is fair with well defined reflections down tothe base of the Tertiary basin fill. To the south of the block the regional data becomes increasingly poor andmapping of the deeper levels is particularly difficult. A 3D survey also exists over the Kingfisher discoverycovering 450 sq km along the south eastern lake shore, data quality is reasonable. Shallow data atKingfisher lose coherency but this is above the zones of interest in the wells. Well data from 3 wells;Kingfisher-1, Kingfisher-1A and Kingfisher-1B were made available. Full log suites were made availablefor these wells as well as geological and test data.Block 1 is currently covered by 17 2D seismic lines across the southern portion of the block. Data quality isgenerally very good with retention of amplitudes, coherent reflector packages and fairly crisp faultterminations. As noted above, seismic acquisition in Blocks 1 and 3A is not due for completion untilMarch 2008. Much of the area outside the 3D seismic in Block 3A will be covered by additional infill 2Dlines and data will be available for the northern part of Block 1A.Tullow has been exploring a fault terrace in Block 2, to the north of Heritage’s Block 3A and has a numberof reported discoveries but RPS has no access to data from these wells.105
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This document comprises a prospectu
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SUMMARY INFORMATIONThis summary mus
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Summary Consolidated Income Stateme
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Summary Consolidated Cash Flow Stat
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Production from the Zapadno Chumpas
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Given the geographic spread of the
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RISK FACTORSAny investment in the O
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wells may change as a result of low
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which could have a materially adver
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Failure to obtain additional financ
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contractual or pricing terms, both
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years. In addition, since December
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UgandaUganda is among the poorest c
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Market Price of the Ordinary Shares
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DIRECTORS, CORPORATE SECRETARY, SEN
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EXPECTED TIMETABLE OF PRINCIPAL EVE
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CurrenciesAll references in this do
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PART I—INFORMATION ON THE GROUPOV
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Strong management and technical tea
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the availability of existing infras
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In 2005, the Group acquired a 95 pe
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The Group acquired a 10 per cent. i
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The Group is the operator and has a
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exploration wells. The total estima
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The Group has also entered into a s
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Pakistan has current proved hydroca
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operational by drawing up an Enviro
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Page 57 and 58: Date2007 ........ On 18 January 200
Page 59 and 60: (3) One common share of Heritage Ho
Page 61 and 62: (f) General Sir Michael WilkesGener
Page 63 and 64: Remuneration CommitteeThe Remunerat
Page 65 and 66: Goldsworth House, Denton Way, Golds
Page 67 and 68: ResourcesA summary of the gross Con
Page 69 and 70: The post tax Net Present Value (NPV
Page 71 and 72: RPS EnergyHeritage Oil - Competent
Page 105: RPS EnergyHeritage Oil - Competent
Page 135 and 136: Summary Consolidated Balance Sheets
Page 137 and 138: Summary Consolidated Balance Sheets
Page 139 and 140: locks during the first three and a
Page 141 and 142: On 2 October 2007, the Group execut
Page 143 and 144: of amplitude anomalies, further sup
Page 145 and 146: The increase in operating expenses
Page 147 and 148: 5.11 Discontinued OperationsThe res
Page 149 and 150: 6. RESULTS OF CONTINUING OPERATIONS
Page 151 and 152: 6.7 Foreign Exchange LossesThere wa
Page 153 and 154: 6.14 Capital ExpendituresThe follow
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7.14 Capital ExpendituresAdditions
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10. LIQUIDITY AND CAPITAL RESOURCES
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Year Ended 31 December 2005 Prepare
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Intangible E&E assets related to ea
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11.2 The year ended 31 December 200
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(c) Reconciliation of loss for the
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Year Ended 31 December 2004 Prepare
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PART VII—FINANCIAL INFORMATIONA.
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DeclarationFor the purposes of Pros
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HERITAGE OIL LIMITEDNOTES TO BALANC
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AUDITED AND UNAUDITED FINANCIAL INF
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HERITAGE OIL CORPORATIONCONSOLIDATE
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HERITAGE OIL CORPORATIONNOTES TO CO
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Intangible E&E assets related to ea
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k) InvestmentsThe Group classifies
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usually when legal title passes to
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iii) IFRIC 12, ‘‘Service conces
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v) Liquidity riskLiquidity risk is
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ii) DerivativesDerivatives are reco
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5 Other finance costsNine-month per
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Congo to the other partners in the
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No assets have been pledged as secu
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31 December 30 September2005 2006 2
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16 Trade and other payables31 Decem
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A reconciliation of the asset retir
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21 Loss per shareThe following tabl
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25 Commitments and contingenciesHer
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In November 2007, the Group farmed-
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Reconciliation of loss for the year
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At the end of the last reporting pe
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Reconciliation of cash flow stateme
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At 31 December 2006, this has resul
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AUDITED FINANCIAL STATEMENTS RELATI
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AUDITORS’ REPORT TO THE SHAREHOLD
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HERITAGE OIL CORPORATIONNOTES TO CO
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effective as hedges, both at incept
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A ceiling test was undertaken at De
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6. Share capital:(a) Authorized:Unl
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fair value of stock options are amo
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C. PRO FORMA FINANCIAL INFORMATION
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PRO FORMA NET ASSET STATEMENTThe fo
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Production assumptionsProduction du
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Macroeconomic assumptionsThe Direct
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Accordingly, the Illustrative Proje
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Arrangement AgreementPursuant to th
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PART X—ADDITIONAL INFORMATION1. R
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(ii) no share or loan capital of th
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(j)In Alberta, the principal jurisd
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nominal amount has been paid up of
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instrument of transfer (in the case
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up on all the shares conferring tha
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(B) may be a director or other offi
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and is in default for a period of 1
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(c)have sufficient moneys, assets o
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(e)against surrender of the Exchang
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e, to the extent that the same is r
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(g)(ii) by arranging for the credit
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(b) rights, options or warrants oth
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any provision of provincial, territ
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7.5 None of the major shareholders
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Position stillDirector/Senior Manag
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employment or terminates his or her
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All rights of a holder of Exchangea
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agreement of this nature. These cir
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to change. Where the Company pays a
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As part of an agreement reached in
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(x) Foreign Property Information Re
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19. DOCUMENTS AVAILABLE FOR INSPECT
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declared and unpaid dividends on ea
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‘‘DTR’’‘‘DutchCo’’
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‘‘ISIN’’‘‘ITA’’‘
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anniversary of the Effective Date a
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‘‘Support Agreement’’‘‘
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emaining quantities recovered will
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