Prospectus re Admission to the Official List - Heritage Oil

A reconciliation of the asset retirement obligation is provided below:31 December 30 September2005 2006 2006 2007$ $ $ $(Unaudited)Balance—Beginning of period .................. 328,553 434,849 434,849 62,322Additions ................................. — 62,322 — 62,372Revision (in 2006 and 2007 due to change indiscount rate) ............................ 80,012 (41,170) (41,170) 3,204Accretion expense (note 5) .................... 26,284 26,091 26,091 5,376Liabilities transferred to discontinued operations(note 8) ................................ — (419,770) (419,770) —434,849 62,322 — 133,27419 Share capital(a) Share capitalThe authorized share capital has unlimited number of Common Shares without par value.31 December 2005 31 December 2006 30 September 2006 30 September 2007Number Amount Number Amount Number Amount Number Amount$ $ $ $Balance—Beginning ofperiod ......... 21,454,134 21,434,168 21,865,701 22,854,418 21,865,701 22,854,418 22,009,034 24,580,984Issued on exercise ofstock options(note 22) ....... 546,667 1,555,588 143,333 1,726,566 60,000 653,607 32,000 280,300Normal course issuerbids (a) ........ (135,100) (135,338) — — — — — —Issued on conversionof bonds (note 17) . — — — — — — 426,715 16,048,814Balance—End ofperiod ......... 21,865,701 22,854,418 22,009,034 24,580,984 21,925,701 23,508,025 22,467,749 40,910,098(a) Normal course issuer bidsOn 4 November 2004, the Corporation renewed its Normal Course Issuer Bid to acquire up to1,069,506 Common Shares on the open market until 3 November 2005. This was replaced by aNormal Course Issuer Bid program that commenced on 4 November 2005 and expired on3 November 2006 and was not renewed. Pursuant to the Normal Course Issuer Bid, theCorporation could have purchased up to 1,090,785 Common Shares. In 2005, the Corporationacquired 135,100 Common Shares at an average price of Cdn$7.85 per share for cancellation. Noacquisitions under the Normal Course Issuer Bid were made in 2006.205