Prospectus re Admission to the Official List - Heritage Oil

Given the geographic spread of the Group’s production, development and exploration licences with a corefocus on Africa, the Middle East and Russia, the Directors believe that it would now be more appropriatefor the Group to be based in Europe, where a substantial number of holders of securities in HOC and mostof the management of the Group reside.The Directors believe that admission to the main market of the LSE will raise the Group’s profile andstatus amongst European investors and within the oil and gas sector generally, and will give the Companyaccess to an international market with a broad, relevant peer group and considerable research expertise.Furthermore, the Directors believe that in due course a listing on the main market in London should assistin increasing the trading and liquidity of the Ordinary Shares and the Exchangeable Shares.The HOC Common Shares will be de-listed from the TSX approximately 2 business days (being businessdays in London, England or Toronto, Canada) after the effective date of the Plan of Arrangement.However, in order to give Canadian-resident shareholders in HOC a tax efficient method of participatingin the Plan of Arrangement such shareholders have been offered Exchangeable Shares as an alternative toexchanging their HOC Common Shares for Ordinary Shares on the effective date of the Plan ofArrangement. The TSX has conditionally approved the listing of the Exchangeable Shares on the TSXsubject to the receipt of final documentation.Each HOC Common Share will be exchanged for either ten Ordinary Shares or ten Exchangeable Sharesas part of the Plan of Arrangement to help increase the liquidity, following Admission, of the OrdinaryShares and the Exchangeable Shares in addition to providing a suitable initial trading price of shares onthe LSE.At a future date after 12 months from the date of this document, in order to finance the remainder of theoperation expenditures required to bring the initiated oil and gas exploration activities of the Group intofull production the Group is likely to require additional equity and/or debt financing or the sale of noncoreassets. For the purposes of the ‘‘Illustrative Projections of the Group’’ contained in Part VIII of thisdocument, this additional funding is assumed to be equity finance.9. DIVIDEND POLICYEach of the Company and HOC have not declared or paid any dividends since their inception.For the foreseeable future, the Company anticipates that it will retain future earnings and other cashresources for the operation and development of its business.10. SIGNIFICANT CHANGEThere has been no significant change in the financial or trading position of the Group since30 September 2007, the date to which the historical financial information in Part VII(B) of this documenthas been prepared, save for an equity financing, raising gross proceeds of Cdn $181.5 million from theissue of 3 million HOC Common Shares, which closed on 14 November 2007.11. WORKING CAPITALThe Company is of the opinion that the Group has sufficient working capital for its present requirements,that is for at least the next 12 months from the date of this document.12. THE CITY CODEThe City Code will apply to the Company and, on Admission, the shareholders of the Company will beafforded the protections provided by the City Code, in particular the mandatory takeover provisions inrule 9 of the City Code. In the event of a takeover, the squeeze-out provisions in articles 117 to 119 of theAct would be available subject to, amongst other things, the offeror acquiring the requisite percentage ofthe share capital to which the offer relates.13. CAPITALISATION AND INDEBTEDNESSThe Group’s capitalisation as at 31 December 2007 was $260.3 million and its net funds were $38.5 million.9