Prospectus re Admission to the Official List - Heritage Oil

RISK FACTORSAny investment in the Ordinary Shares or Exchangeable Shares is subject to a number of risks. Before makingany decision to invest in the Ordinary Shares or Exchangeable Shares, prospective investors should carefullyconsider all the information contained in this document including, in particular, the specific risks describedbelow. Some of the following factors relate principally to the Group’s business and the sector in which itoperates. Other factors relate principally to an investment in the Ordinary Shares or Exchangeable Shares. Therisks and uncertainties described below are not intended to be exhaustive and are not the only ones facing theGroup. Additional risks and uncertainties not currently known to the Directors, or that they currently deemimmaterial, may also have an adverse effect on the Group’s business, financial condition, results of operationsand prospects. If this occurs, the price of the Ordinary Shares and/or Exchangeable Shares may decline andinvestors could lose all or part of their investment. Investors should consider carefully whether an investment inthe Ordinary Shares or Exchangeable Shares is suitable for them in light of the information in this documentand their own personal circumstances.Risks Relating to the Group’s OperationsRecovery and Reserve and Resource Estimates May Prove IncorrectUnless stated otherwise, the reserves and resources data contained in this document are taken from theRPS Report, which has been prepared in accordance with the standards established by the PRMS. Thereserves and resources data and the associated estimated future net cash flow from the Group’s propertiescontained in this document have been independently evaluated by RPS and, unless stated otherwise,certified by RPS. There are numerous uncertainties inherent in estimating quantities of reserves and cashflows to be derived therefrom, including many factors that are beyond the control of the Group. Estimatingthe amount of reserves and resources is a subjective process and, in addition, results of drilling, testing andproduction subsequent to the date of an estimate may result in revisions to original estimates.The reserves data and cash flow evaluations set forth in this document represent estimates only and shouldnot be construed as representing exact quantities. These estimates and evaluations include a number ofassumptions relating to factors such as initial production rates, production decline rates, ultimate recoveryof reserves, timing and amount of capital expenditures, marketability of production, future prices of oil andgas, operating costs and royalties and other government levies that may be imposed over the producing lifeof the reserves. These assumptions were based on price forecasts in use at the date the relevant evaluationswere prepared and many of these assumptions are subject to change and are beyond the control of theGroup. Actual production and cash flows derived therefrom will vary from these estimates and evaluations,and such variations could be material. The foregoing evaluations are based in part on the assumed successof exploitation activities intended to be undertaken in future years. The reserves and estimated cash flowsto be derived therefrom contained in such evaluations will be reduced to the extent that such exploitationactivities do not achieve the level of success assumed in the evaluations.The estimates and evaluations contained in this document may prove incorrect and undue reliance shouldnot be placed on the forward-looking statements contained herein by investors (including in datacontained within the RPS Report or extracted or derived from the RPS Report and whether expressed tobe certified by RPS or otherwise) concerning the Group’s reserves and resources or production levels.Whilst reserves are stated in accordance with the PRMS reserve and resource definitions, certaincategories of reserves and resources (such as prospective or contingent resources) are inherently lesscertain than other categories (such as 1P or proved reserves).If the assumptions upon which the estimates of the Group’s reserves or resources have been based prove tobe incorrect, the Group may be unable to recover and produce the estimated levels or quality of oil or gasand the Group’s business, prospects, financial condition or results of operations could be materially andadversely affected.Exploration Activities are Capital Intensive and Involve a High Degree of RiskOil and gas exploration activities are capital intensive and involve a high degree of risk. There is noassurance that expenditures made on future exploration by the Group will result in new discoveries of oilor gas in commercial quantities. It is difficult to estimate the costs of implementing any exploratory drillingprogramme due to the inherent uncertainties of drilling in unknown formations, the costs associated withencountering various drilling conditions such as over-pressured zones, tools lost in the hole and changes indrilling plans and locations as a result of prior exploratory wells or additional seismic data andinterpretations thereof. If exploration activities prove unsuccessful over a prolonged period of time, the11