Prospectus re Admission to the Official List - Heritage Oil

The gain on disposal of discontinued operations has been derived as follows:31 December2006$Consideration received or receivableCash ......................................................... 27,052,515Warrants ...................................................... 719,380Total disposal consideration .......................................... 27,771,895Less carrying amount of net assets sold .................................. (18,571,195)Gain on disposal .................................................. 9,200,7009 DisposalsOn 9 March 2007, the Group disposed of its previously consolidated 65% interests in Natural PipelayWorldwide Limited (‘‘NPWL’’) and Naturalay Technologies Limited (‘‘Naturalay’’) in considerationfor 605,000 common shares in a private company named SeaDragon. The fair value of the commonshares consideration received of $2,420,000, which was based on the most recent private placement bySeaDragon in October 2006, resulted in a gain of $1,077,132 on the disposal. The Group’s CFO is adirector and CFO of SeaDragon.Below is an analysis of the assets and liabilities of NPWL and Naturalay as at 9 March 2007, the dateof sale completion:AssetsIntangible development costs ........................................... 1,642,868LiabilitiesTrade and other payables ............................................. 300,000Net assets ........................................................ 1,342,868$The gain on disposal of the previously consolidated subsidiary has been derived as follows:$Consideration received or receivableFair value of shares ................................................ 2,420,000Total disposal consideration ............................................ 2,420,000Less: carrying amount of net assets sold ................................... 1,342,868Gain on disposal of subsidiaries ......................................... 1,077,13210 Intangible exploration assets31 December 30 September2005 2006 2006 2007$ $ $ $(Unaudited)Balance—Beginning of period ............. 32,725,642 43,503,704 43,503,704 54,767,332Exchange differences ................... — 64,121 36,270 117,189Additions ........................... 10,778,062 20,656,473 11,519,132 40,355,455Assets transferred to property, plant andequipment (note 12) .................. — (1,133,000) (1,133,000) (9,493,106)Assets transferred to disposal group held forsale (note 8) ........................ — (8,323,966) (8,323,966) —Balance — End of period ................ 43,503,704 54,767,332 45,602,140 85,746,870198