Prospectus re Admission to the Official List - Heritage Oil

Reconciliation of loss for the year ended 31 December 2006Effect ofPrevious transitionNotes CGAAP to IFRS IFRS$ $ $RevenuePetroleum and natural gas ................ 3,938,512 — 3,938,512Drilling services ........................ 2,895,727 — 2,895,7276,834,239 — 6,834,239ExpensesPetroleum and natural gas ................ 723,611 — 723,611Drilling rig operating .................... 2,291,585 — 2,291,585General and administrative ................ (e) 8,977,345 (349,218) 8,628,127Foreign exchange losses (gains) ............ (k) 798,194 (171,189) 627,005Depletion, depreciation and amortisation ..... (d)(g) 691,011 660,976 1,351,987Exploration expenditure .................. (a) — 6,066,977 6,066,977Impairment of unproved petroleum andnatural gas .......................... (a) 986,964 (986,964) —14,468,710 5,220,582 19,689,292Finance income (costs)Interest income ........................ (h) 1,767,898 (431,547) 1,336,351Finance costs .......................... (h) (5,996,553) 1,354,427 (4,642,126)Loss on derivative liability ................ (i) — (24,851,295) (24,851,295)Unrealised gain on other financial assets ...... (j) — 195,178 195,178(4,228,655) (23,733,237) (27,961,892)Loss from continuing operations ............ (11,863,126) (28,953,819) (40,816,945)Gain (loss) on disposal of discontinuedoperations .......................... (g)(h) 9,950,968 (750,268) 9,200,700Earnings from discontinued operations ....... 3,248,490 — 3,248,490Net loss ............................. (f) 1,336,332 (29,704,087) (28,367,755)216