Prospectus re Admission to the Official List - Heritage Oil

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RPS EnergyHeritage Oil – Competent Persons Report7.4.2. Price AssumptionsHeritage has assumed that the gross field production will be split between export (via Black Sea) anddomestic sales in the proportion 35 per cent./65 per cent. respectively. The export price has been based onthe Urals (Mediterranean) price. This has been derived from the Brent forecast using a relationship basedon an analysis of historical prices. A 5 per cent. discount to Brent has been assumed for the valuation. Thedomestic price was assumed to be 50% of the Urals price.$100.0$90.0$80.0URALS (Mediterranean), $/bbl$70.0$60.0$50.0$40.0$30.0$20.0$10.0$0.0$0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 $90.0 $100.0Brent ($/bbl)Figure 33: Plot of Brent vs. URALS (Mediterranean)—1997 to 200722FEB2008034351817.4.3. Transportation CostsEstimates of the transportation costs for export via the Transneft pipeline system and for domestic saleswere provided by Heritage Oil and Gas. A figure of US$4.53/bbl was used for export costs and US$1.78/bblfor domestic transportation costs.7.4.4. Tax LossesThe total tax loss carry forward at 30/09/2007 of US$22.5 MM was included in the valuation as a deductionagainst future profits tax liabilities. This sum was provided by Heritage.7.4.5. Valuation SummaryAlthough the licence expiry date is 2024, the value and reserves have been reported up to their economiclimit on the assumption that the licence will be extended full economic recovery of all the reserves. Thevaluation includes the cost of abandonment of the wells and all facilities, which has been estimated to beUS$25.0 MM, US$40.0 MM and US$55.0 MM (in 2007US$) for the 1P, 2P and 3P cases, respectively.Post-Tax Net Present ValueEconomic(US$ Million, Money of the Day)Limit (1) 5% 7.5% 10% 12.5% 15%Proved Reserves (1P) ..................... 2025 69.1 40.2 17.5 0.2 32.9Proved plus Probable Reserves (2P) ........... 2029 413.6 308.0 226.6 163.5 46.7Proved plus Probable plus Possible Reserves (3P) . 2031 1356.2 1013.7 762.2 574.5 238.2Table 39:Zapadno Chumpasskoye Post-Tax Valuation (Net Heritage Share)124
RPS EnergyHeritage Oil – Competent Persons ReportZapadno Chumpasskoye reserves are summarised in Table 40, below.Heritage Net Heritage NetGross Working EntitlementRemaining Interest Reserves at BaseReserves Reserves Case Price Forecast(MMstb) (MMstb) (MMstb)OilProved Reserves (1P) ............................. 24.4 23.1 23.1Proved plus Probable Reserves (2P) .................. 63.6 60.5 60.5Proved plus Probable plus Possible Reserves (3P) ......... 169.9 161.4 161.4Table 40:Zapadno Chumpasskoye Reserves Summary7.4.6. Sensitivity to Oil PriceSensitivity of the NPV 10 of the future net revenue in Zapadno Chumpasskoye to changes in oil price isshown in Table 41.Net Present Value 10 of Future Net RevenuePrice Case 1P 2P 3P(US$ Million, Money of the Day)Low Price ($50/bbl real) .............................. 46.2 71.4 378.4Base Price ($70/bbl real) .............................. 17.5 226.6 762.2High Price ($90/bbl real) .............................. 80.6 383.0 1,150.0Table 41:Sensitivity of Zapadno Chumpasskoye NPV 10 to Oil Price7.5. KURDISTAN—Miran Block7.5.1. Fiscal Regime and Contract TermsThe Miran Block was signed in October 2007. The exploration period is 5 years in duration and issubdivided into an initial sub-period of 3 years with the option of a second sub-period of 2 years. Thedevelopment period lasts for an initial 20 years and can be extended for an additional 5 years.The extended details of the Miran 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 netrevenue) and Profit Oil (shared between the Contractor and the Government based on a R factor, theR factor being defined as the ratio of cumulative revenue divided by cumulative costs). A royalty paymentis due under the contract on gross production and net revenue is defined as the gross revenue less royalty.As is normal, the Contractor’s Income Tax liability is paid by the Government out of its share of Profit Oil.The Government may participate in any future development at a level of up to 25% at the point whencommerciality is declared, but is not required to make any repayment to the Contractor for costs incurredup to that point.7.5.2. Price AssumptionsFor the purposes of the valuation it was assumed that Miran crude would trade at a similar price as Kirkuk.This crude currently trades around 7 per cent. below Brent125
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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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Mr. Buckingham has never had any as
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Date2007 ........ On 18 January 200
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(3) One common share of Heritage Ho
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(f) General Sir Michael WilkesGener
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Remuneration CommitteeThe Remunerat
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Goldsworth House, Denton Way, Golds
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ResourcesA summary of the gross Con
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The post tax Net Present Value (NPV
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RPS EnergyHeritage Oil - Competent
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RPS EnergyHeritage Oil - Competent
Page 75 and 76: RPS EnergyHeritage Oil - Competent
Page 125: 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
Page 155 and 156: 7.3 Petroleum and Natural Gas Reven
Page 157 and 158: 7.14 Capital ExpendituresAdditions
Page 159 and 160: 10. LIQUIDITY AND CAPITAL RESOURCES
Page 161 and 162: Year Ended 31 December 2005 Prepare
Page 163 and 164: Intangible E&E assets related to ea
Page 165 and 166: 11.2 The year ended 31 December 200
Page 167 and 168: (c) Reconciliation of loss for the
Page 169 and 170: Year Ended 31 December 2004 Prepare
Page 171 and 172: PART VII—FINANCIAL INFORMATIONA.
Page 173 and 174: DeclarationFor the purposes of Pros
Page 175 and 176: 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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Prospectus re Admission to the Official List - Heritage Oil

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