Prospectus re Admission to the Official List - Heritage Oil

RPS EnergyHeritage Oil – Competent Persons ReportThis forecast price was used as the basis for all other price forecasts required for the valuation. Theseprices are summarised in Table 32. Details of how each price deck was derived can be found in the sectionsbelow for each asset.Oman Russia KurdistanOil Condensate LPG GasBukha/ Bukha/Bukha/ West West West UralsWest West Saudi Saudi Bukha Bukha Bukha Bukha Export KirkukBukha NWS Bukha Propane Butane Propane Butane Gas Gas Blend Domestic BlendYear $/bbl $/bbl $/bbl $/tonne $/tonne $/tonne $/tonne $/MMBTU $/MMBTU $/bbl $/bbl $/bbl2007 . . . . . . . . . . . . . 88.59 85.75 83.05 662.74 675.85 530.19 540.68 0.00 1.00 84.16 42.08 82.392008 . . . . . . . . . . . . . 85.00 82.35 79.65 640.97 653.51 512.77 522.81 0.00 1.00 80.75 40.38 79.052009 . . . . . . . . . . . . . 82.00 79.51 76.81 622.78 634.84 498.22 507.87 0.00 1.00 77.90 38.95 76.262010 . . . . . . . . . . . . . 80.00 77.62 74.92 610.65 622.39 488.52 497.91 0.00 1.00 76.00 38.00 74.402011 . . . . . . . . . . . . . 78.00 75.72 73.02 598.52 609.95 478.82 487.96 0.00 1.00 74.10 37.05 72.542012 . . . . . . . . . . . . . 77.00 74.77 72.07 592.45 603.72 473.96 482.98 0.00 1.00 73.15 36.58 71.612013 . . . . . . . . . . . . . 77.29 75.05 72.35 594.21 605.53 475.37 484.42 0.00 1.00 73.43 36.71 71.882014 . . . . . . . . . . . . . 78.83 76.51 73.81 603.55 615.11 482.84 492.09 0.00 1.00 74.89 37.44 73.312015 . . . . . . . . . . . . . +2%pa +2%pa +2%pa +2%pa +2%pa +2%pa +2%pa 0.00 1.00 +2%pa +2%pa +2%paTable 32:Table of Base Case Forecast Prices7.2. Valuation Methodology7.2.1. Reserves1P, 2P and 3P reserves were valued using spreadsheet based discounted cash flow models. Each model wasbased on the applicable contract terms and a forecast of future production and costs.7.2.2. Contingent and Prospective ResourcesThe only 1C, 2C and 3C contingent and prospective resources in the portfolio are in Block 1 and 3A,Uganda and, at the request of Heritage, were not valued.7.2.3. Other (Miran)In the case of the Miran Contract area in Kurdistan no prospect or lead has yet been properly defined. Thevaluation therefore involved illustrating the value of a number of notional fields on a recoverable volumevs. value plot as an indication of the potential value of success in this block.7.3. Oman—Block 87.3.1. Fiscal Regime and Contract TermsThe Block 8 Petroleum Agreement was signed in February 1985 and has a Development Period of 30 yearsfrom date of first commercial discovery. There is also an option to extend this for a further 10 years underterms to be negotiated which shall be no less favourable than those under which other oil companies arethen operating in Oman.The extended details of the Block 8 PSC are subject to confidentiality agreements. However, RPS Energyconfirms that it has had full access to the final, signed copy of PSC under the terms of such agreements andthat the commercial terms therein have been built into our economics models. The RPS valuation honoursfully these commercial terms.The commercial structure of the Block 8 PSC is in our opinion, very similar to standard PSC’s with theContractor’s entitlement revenue comprising of Cost Oil (defined as a maximum percentage of the totalrevenue) and Profit Oil (shared between the Contractor and the Government based on a fixed percentageof the revenue less any cost oil). There are no royalty payments due under the contract and theContractor’s Income Tax liability is paid by the Government out of its share of Profit Oil.7.3.2. Price Assumptions7.3.2.1. CondensateThe current Bukha condensate contract price for the current month is based on the average mean quotesof APPI NWS oil during the previous month plus the mean of the Platts NWS differential for the month120