Prospectus re Admission to the Official List - Heritage Oil

21 Loss per shareThe following table summarizes the weighted average Common Shares used in calculating netearnings per share:Nine-month periods endedYear ended 31 December30 September2005 2006 2006 2007(Unaudited)Weighted average Common SharesBasic ............................... 21,650,215 21,917,363 21,895,628 22,317,412Diluted ............................. 21,860,371 22,095,507 22,045,516 23,284,968The reconciling item between basic and diluted weighted average number of Common Shares is thedilutive effect of stock options and convertible bonds. A total of nil options (31 December 2005—150,000; 31 December 2006—535,000; 30 September 2006—15,000) and 3,361,702 of shares relating tothe convertible bonds (31 December 2005—nil; 31 December 2006—3,333,333; 30 September 2006—3,333,333) were excluded from the above calculation, as they were anti-dilutive.22 Share-based paymentsStock optionsThe Corporation has a stock option plan whereby certain directors, officers, employees andconsultants of the Group may be granted options to purchase Common Shares. Under the terms ofthe plan, options granted normally vest one third immediately and one third in each of the yearsfollowing the date granted and have a life of five years.Common Share options outstanding and exercisable:31 December 2005 31 December 2006Number Average Number Averageof options exercise price of options exercise price(Cdn) $ (Cdn) $Balance—Beginning of period ............... 476,667 1.31 425,000 9.57Granted ............................... 495,000 10.40 550,000 27.98Exercised (note 19) ...................... (546,667) 3.12 (143,333) 10.27Balance—End of period ................... 425,000 9.57 831,667 21.63Exercisable—End of period ................ 194,998 9.42 350,002 18.8930 September 2006 30 September 2007Number Average Number Averageof options exercise price of options exercise price(Cdn) $ (Cdn) $(Unaudited)Balance—Beginning of period .............. 425,000 9.57 831,667 21.63Granted .............................. 15,000 16.60 1,320,701 29.14Exercised (note 19) ...................... (60,000) 11.06 (32,000) 6.65Forfeited .............................. — — (41,667) 9.70Balance—End of period ................... 380,000 9.61 2,078,701 26.87Exercisable—End of period ................ 225,002 9.30 836,567 23.93Number of optionsRemainingExercise price (Cdn) Outstanding Exercisable life (years)$9.70 ........................................... 210,000 210,000 2.64$16.60 .......................................... 15,000 10,000 3.73$22.00—$29.14 ................................... 1,853,701 616,567 4.202,078,701 836,567 4.04207