Prospectus re Admission to the Official List - Heritage Oil

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