Prospectus re Admission to the Official List - Heritage Oil

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The Kingfisher appraisal drilling programme is scheduled to commence in the first half of 2008, followingthe release of the Nabors 221 rig from neighbouring Block 2. Management expects this land rig to have thecapability to reach the depth of the primary target horizon not reached by previous Kingfisher drilling. Theprevious Kingfisher-1 well produced approximately 13,900 bopd from shallower, secondary target horizons.Drilling of the Pelican prospect and other prospects in the lake identified by recent seismic programmes isplanned to commence in the first quarter of 2009. Expression of interest documents to obtain a bargemounted rig have been issued recently.A 2D seismic survey has been carried out on in Block 1, where relatively shallow structures have beenidentified with associated amplitude anomalies. Oil is known to have migrated into Block 1, as evidencedby the active oil seep within the block located at Paraa. This oil seep together with the presence ofamplitude anomalies, further supports the potential presence of hydrocarbons within the block.The drilling programme in Block 1 has been accelerated following drilling results in neighbouring licences,as well as the results from the current seismic programme. Management expects an exploration drillingprogramme to commence in or after the summer of 2008, concentrated on the shallower targets in thesouthern part of the block. A mobile rig has recently been contracted by the operator of the neighbouringlicence which will be used for this drilling programme rig.Capital expenditures in Uganda between 2005 and 2007 under (IFRS) may be summarised as follows:Nine-month periods endedYear ended 31 December30 September2005 2006 2006 2007$ $ $ $(Unaudited)Drilling ................................. 2,466,385 11,999,638 5,327,637 7,814,808Seismic .................................. 1,059,395 — — 12,720,495Other ................................... 2,123,457 1,665,298 1,171,610 1,543,3425,649,237 13,664,936 6,499,247 22,078,645Independent Resources at Block 3A and 1RPS estimated that the gross risked recoverable contingent and prospective resources in Blocks 3A and 1are as follows:Gross Risked Recoverable Resources (MMstb)p90 p50 p10 Mean280 793 1,731 923The Group has a 50 per cent. working interest. The Government of Uganda has a back-in right whichcould, if exercised, reduce the Group’s working interest to 42.5 per cent.Democratic Republic of CongoThe DRC is located in West and Central Africa. Oil production is located in the western part of thecountry from the restricted Atlantic offshore and adjacent coastal onshore Congo Basin. The Group’sinterests cover the entire area of Lake Albert that lies within the DRC, plus a smaller area onshore to thesouth of the lake adjacent to the Semliki flats in Uganda.Blocks 1 and 2, adjacent to the Ugandan blocks, in the DRC are held under a single PSC with thegovernment of DRC, which was signed in July 2006. The Group holds a 39.5 per cent. interest in bothblocks, with Tullow, the operator, holding 48.5 per cent. and the DRC state oil company, COHYDRO,holding the remaining 12 per cent. The initial exploration term is five years, during which seismic data willbe acquired and exploration wells drilled. However, such works will only commence following the receiptof a presidential decree, the timing of which is uncertain.The Group has agreed to a total minimum contractual work programme which includes collecting and reanalysingexisting seismic data, conducting one 400 km and two 200 km seismic surveys, and drilling four44
exploration wells. The total estimated gross financial commitment amounts to $18.6 million spread overthe five year exploration period.Given the proximity of the DRC licences to the Uganda licences in the Albert Basin, there should be costbenefits from sharing certain operating, capital and infrastructure development costs, including thedevelopment and construction of a potential international export pipeline to Mombasa on the east coastof Kenya.Map of Blocks I and II and Surrounding Area22MAR200811412237Iraq and the Kurdistan Region of IraqIraq has the second largest light oil reserves in the world, estimated at 112 billion bbls of oil and 100 trillioncubic feet of gas (as stated in the CIA World Factbook as at 1 January 2006). The KRI is an underexploredarea with potential resources. The area has had political stability and has relatively low securityrisk compared to other areas of Iraq.45
Page 1 and 2: This document comprises a prospectu
Page 3 and 4: SUMMARY INFORMATIONThis summary mus
Page 5 and 6: Summary Consolidated Income Stateme
Page 7 and 8: Summary Consolidated Cash Flow Stat
Page 9 and 10: Production from the Zapadno Chumpas
Page 11 and 12: Given the geographic spread of the
Page 13 and 14: RISK FACTORSAny investment in the O
Page 15 and 16: wells may change as a result of low
Page 17 and 18: which could have a materially adver
Page 19 and 20: Failure to obtain additional financ
Page 21 and 22: contractual or pricing terms, both
Page 23 and 24: years. In addition, since December
Page 25 and 26: UgandaUganda is among the poorest c
Page 27 and 28: Market Price of the Ordinary Shares
Page 29 and 30: DIRECTORS, CORPORATE SECRETARY, SEN
Page 31 and 32: EXPECTED TIMETABLE OF PRINCIPAL EVE
Page 33 and 34: CurrenciesAll references in this do
Page 35 and 36: PART I—INFORMATION ON THE GROUPOV
Page 37 and 38: Strong management and technical tea
Page 39 and 40: the availability of existing infras
Page 41 and 42: In 2005, the Group acquired a 95 pe
Page 43 and 44: The Group acquired a 10 per cent. i
Page 45: The Group is the operator and has a
Page 49 and 50: The Group has also entered into a s
Page 51 and 52: Pakistan has current proved hydroca
Page 53 and 54: operational by drawing up an Enviro
Page 55 and 56: Mr. Buckingham has never had any as
Page 57 and 58: Date2007 ........ On 18 January 200
Page 59 and 60: (3) One common share of Heritage Ho
Page 61 and 62: (f) General Sir Michael WilkesGener
Page 63 and 64: Remuneration CommitteeThe Remunerat
Page 65 and 66: Goldsworth House, Denton Way, Golds
Page 67 and 68: ResourcesA summary of the gross Con
Page 69 and 70: The post tax Net Present Value (NPV
Page 71 and 72: RPS EnergyHeritage Oil - Competent
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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 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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ii) DerivativesDerivatives are reco
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5 Other finance costsNine-month per
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Congo to the other partners in the
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No assets have been pledged as secu
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31 December 30 September2005 2006 2
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16 Trade and other payables31 Decem
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A reconciliation of the asset retir
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21 Loss per shareThe following tabl
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25 Commitments and contingenciesHer
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In November 2007, the Group farmed-
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Reconciliation of loss for the year
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At the end of the last reporting pe
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Reconciliation of cash flow stateme
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At 31 December 2006, this has resul
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AUDITED FINANCIAL STATEMENTS RELATI
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AUDITORS’ REPORT TO THE SHAREHOLD
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HERITAGE OIL CORPORATIONNOTES TO CO
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effective as hedges, both at incept
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A ceiling test was undertaken at De
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6. Share capital:(a) Authorized:Unl
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fair value of stock options are amo
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C. PRO FORMA FINANCIAL INFORMATION
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PRO FORMA NET ASSET STATEMENTThe fo
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Production assumptionsProduction du
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Macroeconomic assumptionsThe Direct
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Accordingly, the Illustrative Proje
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Arrangement AgreementPursuant to th
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PART X—ADDITIONAL INFORMATION1. R
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(ii) no share or loan capital of th
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(j)In Alberta, the principal jurisd
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nominal amount has been paid up of
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instrument of transfer (in the case
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up on all the shares conferring tha
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(B) may be a director or other offi
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and is in default for a period of 1
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(c)have sufficient moneys, assets o
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(e)against surrender of the Exchang
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e, to the extent that the same is r
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(g)(ii) by arranging for the credit
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(b) rights, options or warrants oth
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any provision of provincial, territ
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7.5 None of the major shareholders
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Position stillDirector/Senior Manag
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employment or terminates his or her
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All rights of a holder of Exchangea
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agreement of this nature. These cir
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to change. Where the Company pays a
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As part of an agreement reached in
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(x) Foreign Property Information Re
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19. DOCUMENTS AVAILABLE FOR INSPECT
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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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