Prospectus re Admission to the Official List - Heritage Oil

locks during the first three and a half year term includes the acquisition of 2D seismic and the drilling oftwo exploration wells, at a minimum gross cost of more than $10.275 million. The exploration termcommences on receipt of the presidential decree.KRGThe Group has executed a PSC with the KRG over the Miran Block in the south-west of the KRI. TheGroup also agreed to be a 50/50 partner with the KRG to design and build a 20,000 bopd oil refinery in thevicinity of the licence area. Under the terms of the agreement, Heritage Middle East, a wholly-ownedsubsidiary of the Company, will serve as operator. The Miran licence area is 1,015 square km andencompasses a structure as expressed at surface which constitutes an area of approximately 500 square kmand appears to have three separate culminations. Reservoir potential exists at numerous zones thatmanagement estimate could contain significant quantities of oil. The minimum work programme in thePSC during the first three year term comprises the acquisition of 2D seismic and the drilling of oneexploration well, at a minimum cost of more than $8.5 million.MaliThe Group farmed-in to two onshore exploration licences in Mali, in North-West Africa, with a gross areaof over 72,000 square km in November 2007. The Group has been appointed as operator. The Group hasthe right to acquire a 75 per cent. working interest in each of Block 7 and Block 11 from Centric EnergyCorporation in return for funding the working interest. The Group will fund all costs of the obligatorywork programmes for the next two years in both blocks, comprising the acquisition of 2D seismic and thedrilling of one exploration well, at a total estimated cost for the two licences of between $15 million and$20 million.MaltaThe Group was awarded 100 per cent. of Areas 2 and 7 offshore to Malta in December 2007. The licenceareas encompass almost 18,000 square km and are situated approximately 80 km (Area 2) and 140 km(Area 7) from the Maltese coast in water depths ranging from between 80 metres and 300 metres. Theminimum work programme in the PSC during the first three year term comprises the acquisition of 2Dseismic and the drilling of one exploration well, at a minimum cost in excess of $22 million.PakistanA wholly-owned subsidiary of the Group was awarded a 60 per cent. participating interest in the SanjawiBlock (No. 3068-2) in Zone II (Baluchistan), in Pakistan. The onshore exploration licence has a gross areaof 2,258 square km. The exploration licence and PSC were executed on 16 November 2007. The Group hasbeen appointed operator. The joint venture partners are two companies incorporated in Pakistan, SprintEnergy (Pvt) Limited, a subsidiary of the JS Group, and Trakker Energy (Pvt) Limited.2. ACQUISITIONS, DISPOSALS AND FINANCINGThe Group’s portfolio and financial position has changed in several material aspects over the last threeyears, including the following principal changes.Year Ended 31 December 2004In 2004, the Group was awarded a 50 per cent. working interest in Blocks 3A and 1 in the Albert Basin inUganda, and was appointed operator in both blocks. Block 3A, which ordinarily encompassed most of theexploration acreage which previously constituted Block 3, which had been awarded in 1997 and afterdrilling three test wells at the same Turaco drill site, which were not considered commercial discoveries, itwas subsequently relinquished, was re-licensed in 2004 for a term of six years and now covers an area of2,033 square km. Block 1 licence covers an area of 3,659 km.On 9 June 2004, the Group sold a call option for proceeds of $1.2 million entitling the purchaser to acquirethe overriding royalty in the Congo for proceeds of $30.4 million by 30 July 2004. An additional contingentconsideration of up to A8.3 million (approximately $10 million) was payable on the sale of all or a portionof the interest by the purchaser by 31 December 2005, although this did not take place. Concurrent withthe exercise of the option, the purchaser would be required to sell a seven per cent. working interest in137