Prospectus re Admission to the Official List - Heritage Oil

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Accountant’s report on the illustrative cash flow projectionsThe following is the full text of a report on the Illustrative Projections of the Company from KPMG LLPas reporting accountants:KPMG LLP8 Salisbury Square,London, EC4Y 8BB,United KingdomThe DirectorsHeritage Oil LimitedOrdnance House31 Pier RoadSt. HelierJersey JE4 8PWChannel Islands28 March 2008Dear SirsHeritage Oil LimitedWe report on the illustrative cash flow projections of Heritage Oil Limited (‘‘the Company’’) and itssubsidiaries (‘the Group’) for the two year period ending 31 December 2010 (the ‘‘IllustrativeProjections’’). The Illustrative Projections, and the material assumptions upon which they are based, areset out on pages 240-243 of the prospectus (the ‘‘Prospectus’’) issued by the Company and will be dated28 March 2008.The Illustrative Projections have been prepared by the directors of the Company, for illustrative purposesonly, in order to show a possible outcome and they should be read in conjunction with the assumptions andbasis of preparation accompanying them. The Illustrative Projections have been presented solely for thepurposes of complying with the Committee of European Securities Regulators (‘‘CESR’’)recommendations for the consistent implementation of the European Commission’s Regulations onProspectuses No.809/2004 (the ‘‘CESR recommendations’’), paragraph 133. This report is required byparagraph 133(b)(iii) of the CESR recommendations and is given for the purpose of complying with thatparagraph and for no other purpose.ResponsibilitiesIt is the responsibility of the directors of the Company to prepare the Illustrative Projections in accordancewith the requirements of paragraph 133(b)(ii) of the CESR recommendations.It is our responsibility to form an opinion as required by paragraph 133(b)(iii) of the CESRrecommendations, as to whether the Illustrative Projections have been stated after due care and enquiryand to report that opinion to you.Save for any responsibility imposed by law or regulation to any person as and to the extent there provided,to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability toany other person for any loss suffered by any such other person as a result of, arising out of, or inconnection with this report or our statement, required by and given solely for the purposes of complyingwith paragraph 23.1 of Annex I of the Prospectus Directive Regulation, consenting to its inclusion inthe Prospectus.Basis of preparation of the Illustrative ProjectionsThe Illustrative Projections have been prepared on the basis stated on page 240 of the Prospectus.The Illustrative Projections, which are unaudited, are intended to show a possible outcome based on statedassumptions. The length of the period covered by the Illustrative Projections, means that the outcomebased on the assumptions should be treated with even more caution than would be the case for a forecast.244
Accordingly, the Illustrative Projections do not constitute any form of forecast, whether of cash, profit orotherwise. The Illustrative Projections relate to an extended future period and accordingly the estimatesand assumptions underlying the projections are inherently uncertain, based on events that have not takenplace, and are subject to significant economic, competitive and other uncertainties and contingenciesbeyond the Group’s control. Further, given the nature of the Group’s business and industry which issubject to a number of significant risk factors, there can be no assurance that the projected cash flows canbe realised. Since the Illustrative Projections relate to the future actual cash flows are likely to differ fromthose projected because events and circumstances frequently do not occur as expected and the differencemay be material. Attention is drawn to the ‘‘Risk Factors’’ section of the Prospectus.Basis of opinionWe conducted our work in accordance with the Standards for Investment Reporting issued by the AuditingPractices Board in the United Kingdom to the extent that such standards are applicable in respect of thiswork. Our work included discussing with the directors of the Company the processes undertaken by themin identifying the key matters, risks and assumptions affecting cash flows and in compiling the IllustrativeProjections based upon the disclosed assumptions. The assumptions upon which the Illustrative Projectionsare based are solely the responsibility of the directors of the Company.We planned and performed our work so as to obtain the information and explanations we considerednecessary in order to provide us with reasonable assurance that the Illustrative Projections have beenstated by the Company after due care and enquiry.Since the Illustrative Projections and the assumptions on which they are based relate to the future and maytherefore be affected by unforeseen events, we can express no opinion as to whether the outcome shown inthe Illustrative Projections will correspond with actual results to be reported and the differences maybe material.Our work has not been carried out in accordance with auditing or other standards and practices generallyaccepted in the United States of America or other jurisdictions and accordingly should not be relied uponas if it had been carried out in accordance with those standards and practices.OpinionIn our opinion the Illustrative Projections have been stated by the Company after due care and enquiry.DeclarationFor the purposes of Prospectus Rule 5.5.3R(2)(f) we are responsible for this report as part of theprospectus and declare that we have taken all reasonable care to ensure that the information contained inthis report is, to the best of our knowledge, in accordance with the facts and contains no omissions likely toaffect its import. This declaration is included in the prospectus in compliance with paragraph 1.2 ofAnnex 1 of the Prospectus Directive Regulation.Yours faithfully(Signed) ‘‘KPMG LLP’’KPMG LLP28 March 2008245
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This document comprises a prospectu
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SUMMARY INFORMATIONThis summary mus
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Summary Consolidated Income Stateme
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Summary Consolidated Cash Flow Stat
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Production from the Zapadno Chumpas
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Given the geographic spread of the
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RISK FACTORSAny investment in the O
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wells may change as a result of low
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which could have a materially adver
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Failure to obtain additional financ
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contractual or pricing terms, both
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years. In addition, since December
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UgandaUganda is among the poorest c
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Market Price of the Ordinary Shares
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DIRECTORS, CORPORATE SECRETARY, SEN
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EXPECTED TIMETABLE OF PRINCIPAL EVE
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CurrenciesAll references in this do
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PART I—INFORMATION ON THE GROUPOV
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Strong management and technical tea
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the availability of existing infras
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In 2005, the Group acquired a 95 pe
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The Group acquired a 10 per cent. i
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The Group is the operator and has a
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exploration wells. The total estima
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The Group has also entered into a s
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Pakistan has current proved hydroca
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operational by drawing up an Enviro
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Mr. Buckingham has never had any as
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Date2007 ........ On 18 January 200
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(3) One common share of Heritage Ho
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(f) General Sir Michael WilkesGener
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Remuneration CommitteeThe Remunerat
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Goldsworth House, Denton Way, Golds
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ResourcesA summary of the gross Con
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The post tax Net Present Value (NPV
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RPS EnergyHeritage Oil - Competent
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Summary Consolidated Balance Sheets
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Summary Consolidated Balance Sheets
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locks during the first three and a
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On 2 October 2007, the Group execut
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of amplitude anomalies, further sup
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The increase in operating expenses
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5.11 Discontinued OperationsThe res
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6. RESULTS OF CONTINUING OPERATIONS
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6.7 Foreign Exchange LossesThere wa
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6.14 Capital ExpendituresThe follow
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7.3 Petroleum and Natural Gas Reven
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7.14 Capital ExpendituresAdditions
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10. LIQUIDITY AND CAPITAL RESOURCES
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Year Ended 31 December 2005 Prepare
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Intangible E&E assets related to ea
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11.2 The year ended 31 December 200
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(c) Reconciliation of loss for the
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Year Ended 31 December 2004 Prepare
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PART VII—FINANCIAL INFORMATIONA.
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DeclarationFor the purposes of Pros
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HERITAGE OIL LIMITEDNOTES TO BALANC
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AUDITED AND UNAUDITED FINANCIAL INF
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HERITAGE OIL CORPORATIONCONSOLIDATE
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HERITAGE OIL CORPORATIONCONSOLIDATE
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HERITAGE OIL CORPORATIONNOTES TO CO
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Intangible E&E assets related to ea
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k) InvestmentsThe Group classifies
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usually when legal title passes to
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iii) IFRIC 12, ‘‘Service conces
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v) Liquidity riskLiquidity risk is
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Page 197 and 198: 5 Other finance costsNine-month per
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Page 203 and 204: 31 December 30 September2005 2006 2
Page 205 and 206: 16 Trade and other payables31 Decem
Page 207 and 208: A reconciliation of the asset retir
Page 209 and 210: 21 Loss per shareThe following tabl
Page 211 and 212: 25 Commitments and contingenciesHer
Page 213 and 214: In November 2007, the Group farmed-
Page 215 and 216: Reconciliation of loss for the year
Page 217 and 218: At the end of the last reporting pe
Page 219 and 220: Reconciliation of cash flow stateme
Page 221 and 222: At 31 December 2006, this has resul
Page 223 and 224: AUDITED FINANCIAL STATEMENTS RELATI
Page 225 and 226: AUDITORS’ REPORT TO THE SHAREHOLD
Page 227 and 228: HERITAGE OIL CORPORATIONCONSOLIDATE
Page 229 and 230: HERITAGE OIL CORPORATIONNOTES TO CO
Page 231 and 232: effective as hedges, both at incept
Page 233 and 234: A ceiling test was undertaken at De
Page 235 and 236: 6. Share capital:(a) Authorized:Unl
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Page 239 and 240: C. PRO FORMA FINANCIAL INFORMATION
Page 241 and 242: PRO FORMA NET ASSET STATEMENTThe fo
Page 243 and 244: Production assumptionsProduction du
Page 245: Macroeconomic assumptionsThe Direct
Page 249 and 250: Arrangement AgreementPursuant to th
Page 251 and 252: PART X—ADDITIONAL INFORMATION1. R
Page 253 and 254: (ii) no share or loan capital of th
Page 255 and 256: (j)In Alberta, the principal jurisd
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Page 261 and 262: up on all the shares conferring tha
Page 263 and 264: (B) may be a director or other offi
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Page 267 and 268: (c)have sufficient moneys, assets o
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Page 273 and 274: (g)(ii) by arranging for the credit
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Page 279 and 280: 7.5 None of the major shareholders
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Page 285 and 286: All rights of a holder of Exchangea
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declared and unpaid dividends on ea
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‘‘DTR’’‘‘DutchCo’’
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‘‘ISIN’’‘‘ITA’’‘
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anniversary of the Effective Date a
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‘‘Support Agreement’’‘‘
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emaining quantities recovered will
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Prospectus re Admission to the Official List - Heritage Oil

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