Prospectus re Admission to the Official List - Heritage Oil

7.14 Capital ExpendituresAdditions to plant, property and equipment were $20,554,465 in 2005, compared to $37,318,136 in 2004.Capital expenditures in 2005 and 2004 may be analysed by country and category as follows:Year ended 31 December2004 2005$ $UgandaDrilling ................................................... 6,653,966 2,466,385Seismic ................................................... 4,130,388 1,059,395Other ..................................................... 1,647,725 2,123,45712,432,079 5,649,237CongoDrilling ................................................... 1,030,931 1,683,333Other ..................................................... 498,793 1,007,595Acquisition of licence interest ................................... 7,000,000 —8,529,724 2,690,928OmanOther ..................................................... 172,788 398,316172,788 398,316RussiaAcquisition of licence interest and other ........................... 871,950 6,558,966871,950 6,558,966OtherUndeveloped lands ........................................... 2,218,319 3,952,033Eagle Drill Rig refurbishment ................................... 640,812 638,613Corporate ................................................. 12,452,464 666,37215,311,595 5,257,018Total capital expenditures ...................................... 37,318,136 20,554,4658. FIXED PRICE CONTRACTS AND DERIVATIVE FINANCIAL INSTRUMENTSThe Group periodically adopts a hedging policy to mitigate certain exposure to commodity pricing risk. Noderivative instruments were entered into in the financial years ended 31 December 2004, 2005, 2006 or thenine-month period ended 30 September 2007.9. CONTRACTUAL OBLIGATIONS AND COMMITMENTSThe tables below set out the Group’s net share of outstanding commitments for the respective periods.Work programme obligations comprise the estimated costs of minimum work programmes set out incertain of the Group’s licences in Russia, Uganda and Oman.The Group did not enter into any off-balance sheet arrangements in the financial years ended31 December 2004, 2005, 2006 or the nine-month period ended 30 September 2007, that would adverselyimpact on the Group’s financial position or results of operations.At 30 September 2007, in Canada, Russia and Uganda the Group has available tax deductions of$25,418,994 and tax losses of $70,286,702 of which $23,452,398 expires from 2008 to 2027, and theremaining $46,834,304 does not have an expiry period.155