Prospectus re Admission to the Official List - Heritage Oil

Arrangement AgreementPursuant to the Arrangement Agreement, Canadian resident holders of HOC Common Shares whoelect to do so will receive ten Exchangeable Shares for each HOC Common Share held. Canadianresident holders of HOC Common Shares who do not elect to receive Exchangeable Shares willreceive ten Ordinary Shares for each HOC Common Share held. Non-residents of Canada will receiveten Ordinary Shares for each HOC Common Share held. Holders of HOC Common Shares whodissent to the Plan of Arrangement will be entitled to receive cash proceeds equal to the fair marketvalue of their HOC Common Shares. Finally, holders of HOC Options will receive ten Options foreach HOC Option held, and the exercise prices of such options will be divided by a factor of ten andconverted into pounds sterling of the United Kingdom.A special meeting of Heritage Securityholders was held on 20 March 2008 at which HeritageSecurityholders entitled to vote in respect of the Plan of Arrangement passed a resolution approvingthe Plan of Arrangement which required the affirmative vote of 66 2 ⁄3 per cent. of votes cast by holdersof HOC Common Shares as well as by Heritage Securityholders present in person or representedby proxy.Following receipt of the approval of Heritage Securityholders, HOC has received from the Court ofQueen’s Bench (Alberta) a final order approving the Plan of Arrangement. The Plan of Arrangementwill become effective upon the Effective Date.The obligation of the parties to complete the Plan of Arrangement is subject to a number ofconditions, including, but not limited to, the regulatory approvals and not more than 3 per cent. ofholders of HOC Common Shares dissenting to the Plan of Arrangement.The Arrangement Agreement may be terminated by the mutual written consent of the parties at anytime prior to the Effective Date.2. RIGHTS OF EXCHANGEABLE SHAREHOLDERSGeneralExchangeable Shareholders will have certain economic rights, and Voting Rights in the managementof the Company, pursuant to the Support Agreement, the Exchangeable Share provisions and theVoting and Exchange Trust Agreement as more fully described below and in section 6.3 of Part X ofthis document.Under the Exchangeable Share provisions, so long as Exchangeable Shares are outstanding, theCompany covenants to the fullest extent permitted by law not to declare or pay any dividend on theOrdinary Shares unless: (i) HOC shall simultaneously declare or pay, as the case may be, anequivalent dividend on the Exchangeable Shares; and (ii) HOC shall have sufficient money or otherassets or authorised but unissued securities available to enable the due declaration and the due andpunctual payment, in accordance with applicable law, of any such dividend on the ExchangeableShares. In the case of a share dividend or a dividend declared in property on the Ordinary Shares(and in certain other circumstances), the Support Agreement provides that the ExchangeableShareholders are entitled to receive the economic equivalent for each Exchangeable Sharefrom HOC.In addition, under the Support Agreement the Company has agreed to ensure that HOC will be in aposition to make all necessary payments in the event of the liquidation, dissolution or winding-up ofHOC, the retraction of the Exchangeable Shares, or the redemption of the Exchangeable Shares.Further, the Company has agreed to ensure that Alberta CallCo will be in funds to make all necessarypayments in the event it exercises its right to acquire any Exchangeable Shares where a holder ofExchangeable Shares has given a redemption notice to HOC and in certain other circumstances.Exchange RightsSubject to certain conditions, each Exchangeable Shareholder has the right to exchange all or any ofits Exchangeable Shares for Ordinary Shares on a one-to-one basis, upon written request of suchExchangeable Shareholder. Notwithstanding the foregoing, holders of the Exchangeable Shares whoare persons or entities in the United States of America or are a ‘‘US Person’’ within the meaning ofRegulation S of the Securities Act as amended may not exercise such exchange right.247