Prospectus re Admission to the Official List - Heritage Oil

26 Non-cash investing and financing activitiesYear ended Nine-month periods ended31 December 30 September2005 2006 2006 2007$ $ $(Unaudited)Capitalised portion of stock-based compensation ...... — (940,000) — (8,957,752)Non-cash property, plant and equipment additionsrelating to the capitalised portion of stock-basedcompensation .............................. — 940,000 — 8,957,752Non-cash portion of sales proceeds on disposal ofdiscontinued operations ...................... — 719,380 — —Receipt of warrant as part of the sales proceeds fromthe disposal of discontinued operations ........... — (719,380) — —Disposition of subsidiaries (note 9) ................ — — — (1,342,868)Gain on disposal of subsidiaries (note 9) ............ — — — (1,077,132)Receipt of SeaDragon shares as a proceeds for disposalof subsidiaries (note 9) ....................... — — — 2,420,000Receipt of SeaDragon shares as a result of the issuanceof the Corporation’s guarantee for a third party’s debt — — — 435,000Accrual of payable representing the fair value of theCorporation’s guarantee issued for a third party’s debt — — — (435,000)27 Subsequent eventsIn October 2007, a wholly-owned subsidiary of the Corporation received a loan of U.S.$9,450,000 torefinance the corporate jet acquisition. Interest on the loan is variable at a rate of LIBOR plus1.6 per cent. The loan, which is secured on the corporate jet, is scheduled to be repaid by19 consecutive quarterly installments of principal. Each installment equals to $117,500 with the finalinstallment being $7,217,500. The Corporation provided a corporate guarantee to the lender.In October 2007, a wholly-owned subsidiary of the Corporation executed a Production SharingContract with the Kurdistan Regional Government (KRG) over Miran Block in the southern region ofthe Kurdistan Region of Iraq. Heritage will also be operating as a 50/50 partner with the KRG tosupply and operate a 20,000 barrel per day oil refinery in the vicinity of the licence area (‘‘RefineryAgreement’’). The Production Sharing Contract and Refinery Agreement include minimum workprogram and contractual commitments estimated at approximately $40 million and $140 millionrespectively, over four years.On 14 November, 2007, the Corporation closed an equity offering of 3,000,000 Common Shares whichwere issued at a price of Cdn $60.50 per Common Share for gross proceeds of Cdn $181.5 million tothe Company. In addition, Albion Energy Limited sold 3,000,000 Common Shares at a price ofCdn $60.50 per Common Share for gross proceeds of Cdn $181.5 million. The ultimate owner ofAlbion Energy is Mr. Anthony Buckingham, a Director and Chief Executive Officer of theCorporation.In November 2007, a wholly-owned subsidiary of the Group was awarded a 60 per cent. participatinginterest in the Sanjawi Block in Zone II (Baluchistan), in Pakistan. The onshore exploration licencehas a gross area of 2,258 square km. The exploration licence and PSC were executed on16 November 2007. The Group has been appointed as an operator. The work programme shall befully completed during initial three year term with financial commitment of $3.3 million in the firstyear, $0.4 million in the second year and $6.5 million in the third year.In December 2007, the Group executed a Production Sharing Contract with the Maltese Governmentfor Areas 2 and 7 in the southeastern offshore region of Malta. Under the terms of the agreement, awholly-owned subsidiary of the Group will serve as operator with a 100% interest. Areas 2 and 7 coverapproximately 9,190 square km and 8,778 square km respectively. The total minimum contractualwork programme has financial commitment of $22 million, distributed over the first three-yearexploration phase, which can be extended for a further three years thereafter.210