Prospectus re Admission to the Official List - Heritage Oil

As part of an agreement reached in connection with the European Union directive on thetaxation of savings income in the form of interest payments, and in line with steps taken byother relevant third countries, Jersey introduced with effect from 1 July 2005 a retentiontax system in respect of payments of interest, or other similar income, made to anindividual beneficial owner resident in an EU Member State by a paying agent establishedin Jersey. The retention tax system applies for a transitional period prior to theimplementation of a system of automatic communication to EU Member States ofinformation regarding such payments. During this transitional period, such an individualbeneficial owner resident in an EU Member State will be entitled to request a payingagent not to retain tax from such payments but instead to apply a system by which thedetails of such payments are communicated to the tax authorities of the EU Member Statein which the beneficial owner is resident.The retention tax system in Jersey is implemented by means of bilateral agreements witheach of the EU Member States, the Taxation (Agreements with European Union MemberStates) (Jersey) Regulations 2005 and Guidance Notes issued by the Policy & ResourcesCommittee of the States of Jersey. Based on these provisions and our understanding of thecurrent practice of the Jersey tax authorities, any dividend distributions to shareholders bythe Company and income realised by shareholders upon the sale, refund or redemption ofshares do not constitute interest payment for the purpose of the retention tax andtherefore neither the Company nor any paying agent appointed by the Company in Jerseyis obliged to levy the retention tax in Jersey under those provisions in respect thereof. Tothe extent that the Company makes distributions in the form of interest in the future, theobligations set out above may apply.(c)Taxation Implications for a Canadian Resident InvestorTHIS SUMMARY IS OF A GENERAL NATURE ONLY AND IS NOT INTENDED TOBE, NOR SHOULD IT BE CONSTRUED TO BE, LEGAL, BUSINESS OR TAX ADVICETO ANY PARTICULAR SHAREHOLDER. CONSEQUENTLY SHAREHOLDERS AREURGED TO CONSULT THEIR OWN TAX ADVISORS FOR ADVICE AS TO THE TAXCONSEQUENCES OF AN INVESTMENT IN THE ORDINARY SHARES HAVINGREGARD TO THEIR PARTICULAR CIRCUMSTANCES.The following is a summary of the principal Canadian federal income tax considerations underthe ITA generally applicable to persons who, for purposes of the ITA, (i) are or are deemed tobe resident in Canada, (ii) hold Ordinary Shares as capital property, and (iii) deal at arm’slength with the Company and are not affiliated with the Company (‘‘Canadian Shareholder’’).Ordinary Shares will generally constitute capital property to the holder unless such personholds such securities in the course of carrying on a business, an adventure or concern in thenature of trade or as ‘‘mark to market’’ property for purposes of the ITA.This summary does not apply to a holder (i) that is a ‘‘financial institution’’ or a ‘‘specifiedfinancial institution’’, as defined in the ITA, (ii) an interest in which would be a ‘‘tax shelterinvestment’’, as defined in the ITA, or (iii) in respect to whom the Company is or will be aforeign affiliate within the meaning of the ITA. Such holders and those who do not hold theirOrdinary Shares as capital property should consult their own tax advisers regarding theirparticular circumstances.This summary is based upon the current provisions of the ITA, the regulations thereunder(the ‘‘Regulations’’) and counsel’s understanding of the current published administrativepolicies and assessing practices of the CRA, all in effect as of the date hereof. This summaryalso takes into account all proposed amendments to the ITA publicly announced by or onbehalf of the Minister of Finance (Canada) prior to the date hereof (‘‘Tax Proposals’’), andassumes that all such Tax Proposals will be enacted substantially as proposed. However, noassurances can be given that the Tax Proposals will be enacted in the form proposed, or at all.This summary is not exhaustive of all possible Canadian federal income tax considerations anddoes not otherwise take into account or anticipate any changes in law, administrative policy orassessing practice, whether by judicial, governmental or legislative action or decision, nor doesit take into account provincial, territorial or foreign income tax legislation or considerations,which may differ from the Canadian federal income tax considerations described herein. No289