Prospectus re Admission to the Official List - Heritage Oil

Third Party Contractors and Providers of Capital Equipment Can Be ScarceThe Group contracts or leases services and capital equipment from third party providers. Such equipmentand services can be scarce and may not be readily available at times and places required. In addition, costsof third party services and equipment have increased significantly over recent years and may continue torise. Scarcity of equipment and services and increased prices may in particular result from any significantincrease in exploration and development activities on a region by region basis which might be driven byhigh demand for oil and gas. In the regions in which the Group operates there is significant demand forcapital equipment and services. The unavailability and high costs of such services and equipment couldresult in a delay or restriction in the Group’s projects and adversely affect the feasibility and profitability ofsuch projects and therefore have an adverse affect on the Group’s business, financial condition, results ofoperations and prospects.Reliance on other Operators and Stakeholders Limits the Group’s Control Over Certain ActivitiesTo the extent the Group is not the operator of its oil and gas properties, including in Oman where RAKPetroleum is the operator and in the DRC where Tullow is the operator, it will be dependent on suchoperators for the timing of activities related to such properties and will be largely unable to direct orcontrol the activities of the operators or the costs of production and exploration of such operations. Inaddition, the success of the Group will be largely dependent upon the performance of the operator’s keyemployees. Any mismanagement of an oil or gas property by the operator may result in delays or increasedcosts to the Group’s non-operated exploration, development and production activities, which couldmaterially and adversely affect the Group’s business, financial condition, results of operationsand prospects.The terms of any relevant operating agreement generally impose standards and requirements in relation tothe operator’s activities. While the Group has deliberately acquired interests in oil and gas properties thatare operated by operators it believes to be reputable, there can be no assurance that any such operator willobserve such standards or requirements.There is a risk that other parties with interests in the Group’s oil and gas properties may elect not toparticipate in certain activities relating to those properties and which require that party’s consent. In thesecircumstances, it may not be possible for such activities to be undertaken by the Group alone or inconjunction with other participants at the desired time or at all.Other participants who have invested in the Group’s oil and gas properties may default in their obligationsto fund capital or other funding obligations in relation to such properties. In such circumstances, theGroup may be required under the terms of the relevant operating agreement to contribute all or part ofany such funding shortfall.After the twelve month period from the date of this document, any such delay or inability to undertakesuch activities, increased cost or obligation to provide further funding could adversely affect the Group’sbusiness, financial condition, results of operations and prospects.Permits, Approvals, Authorisations, Consents and Licences May Be Difficult to Obtain, Sustain or RenewThe operations of the Group require licences, approvals, authorisations, consents and permits and in somecases renewals of existing licences, approvals, authorisations, consents and permits from variousgovernmental authorities. The Directors believe that the Group currently holds or has applied for allnecessary licences, approvals, authorisations, consents and permits to carry on the activities which it iscurrently conducting under applicable laws and regulations in respect of its properties, and also believethat the Group is complying in all material respects with the terms of such licences, approvals,authorisations, consents and permits or extensions thereof. However, the Group’s ability to obtain, sustainor renew such licences, approvals, authorisations, consents and permits on acceptable terms are subject tochanges in regulations and policies and to an extent, on the discretion of the relevant governments.To the extent any such approvals, permits, authorisations, licences and consents are required and notobtained or maintained, the Group may be curtailed or prohibited from proceeding with plannedexploration or development of oil and gas properties.Amendments to current laws, regulations and permits, authorisations, licences, consents and approvalsgoverning operations and activities of oil and gas companies, or more stringent implementation thereof,could result in increases in capital expenditure or production costs or a reduction in levels of productionfrom producing properties or require abandonment or delays in development of new properties, all of14