Prospectus re Admission to the Official List - Heritage Oil

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As it is statistically incorrect to sum the p90, p50 and p10 volumes, the risked recoverable Contingent andProspective resources in Blocks 1A and 3 have been consolidated stochastically and are quoted on a100 per cent. basis (i.e. gross) in Table 5.Gross Risked Recoverable Resources (MMstb)p90 p50 p10 Mean280 793 1,731 923Table 5:Consolidation of Gross Risked Recoverable Resources in Blocks 1 and 3A Reviewed by RPSHeritage has estimated potential resources in areas of their Ugandan blocks beyond seismic control. Thiswas beyond the scope of the RPS evaluation given the time available. Conceptual leads are based onHeritage’s regional and structural knowledge. At the time of this report, Heritage carry three conceptualleads in their portfolio: two of which are located in the northern part of Block 1 and one in the southwesternextremity of Block 3A. The unrisked mean STOIIP estimates from these evaluations are reportedfor completeness (Table 6) but RPS does not warrant these estimates and is not in a position to commenton the hydrocarbon potential of these areas.Mean STOIIP (MMstb)Block 3A, Conceptual Structure D ........... 464Block 1, Conceptual Structure F ............ 2,925Block 1, Conceptual Structure G ............ 2,925Total ........................... 6,314Table 6:Heritage Unrisked Conceptual Leads (Not Reviewed by RPS)Economic EvaluationEconomic valuation of reserves and resources are linked to a long term price forecast for Brent. The BaseCase price forecasts, used for all valuations presented in this report, are given in. Table 7.US$/bbl, MOD4Q 2007 ........................... 88.62008 .............................. 85.02009 .............................. 82.02010 .............................. 80.02011 .............................. 78.02012 .............................. 77.02013 .............................. 77.32014 .............................. 78.82015 .............................. 80.42016 .............................. 82.02017 .............................. 83.72018 .............................. 85.32019 .............................. 87.02020 .............................. 88.82021 .............................. 90.62022 onwards ....................... +2% p.a.Table 7:RPS Price Base Case Forecasts (US$/bbl Money of the Day)66
The post tax Net Present Value (NPV) at various discount rates 4 applying the RPS Base Case priceforecasts are tabulated in Table 8.Post-Tax Net Present ValueEconomic(US$ Million, Money of the Day)Limit (1) 5% 7.5% 10% 12.5% 15%Net Heritage ShareBukha Field, OmanProved Reserves (1P) ...................... 2029 2.2 1.7 1.4 1.2 1.0Proved plus Probable Reserves (2P) ........... 2029 2.8 2.1 1.7 1.4 1.2Proved plus Probable plus Possible Reserves (3P) . . 2029 3.0 2.3 1.7 1.4 1.2West Bukha Field, OmanProved Reserves (1P) ...................... 2037 15.5 13.2 11.4 9.9 8.7Proved plus Probable Reserves (2P) ........... 2037 39.9 35.1 31.3 28.3 25.7Proved plus Probable plus Possible Reserves (3P) . . 2037 79.7 68.6 60.2 53.6 48.3Zapadno Chumpasskoye Field, RussiaProved Reserves (1P) ...................... 2025 69.1 40.2 17.5 0.2 32.9Proved plus Probable Reserves (2P) ........... 2029 413.6 308.0 226.6 163.5 46.7Proved plus Probable plus Possible Reserves (3P) . . 2031 1356.2 1013.7 762.2 574.5 238.2Note(1) Economic limit represents last year of input forecast production.Table 8: Post-Tax Valuation (Net Heritage Share) of Heritage’s Reserves as of 30 th September 2007The only 1C, 2C and 3C contingent and prospective resources in the portfolio are in Block 1 and 3A,Uganda and, at the request of Heritage, were not valued.Heritage was awarded a PSC for the Miran block in Kurdistan on 2 nd October 2007. There is insufficientdata to estimate volumes of prospective resources in Miran at this stage. However in order to indicatepossible value of the block RPS has, based on its detailed understanding of fields in the vicinity, made anestimate of the relationship between field size and value in the success case. Based on a low-mid-highrange of 900 1,950 3,500 MMstb notional STOIIP, RPS has developed production and cost profilesand a relationship between field size and value in the success case. Average success case NPV 10 perrecoverable barrel is given in Table 9:Miran ........................Table 9:Value (NPV 10 )per recoverable barrelUS$2.6Success Case NPV 10 US$/per Recoverable Barrel (p50 case)QualificationsRPS is an independent consultancy specialising in petroleum reservoir evaluation and economic analysis.Except for the provision of professional services on a fee basis, RPS does not have a commercialarrangement with any other person or company involved in the interests that are the subject of this report.Mr Roy Kelly, Technical Director, Reservoir Engineering for RPS Energy, has supervised the evaluation.Mr. Kelly has over 25 years oil and gas experience with international oil companies, as well as withinternational consultancies. He is a Member of the Society of Petroleum Engineers and a Fellow of theEnergy Institute, as well as being a Chartered Petroleum Engineer. Other RPS Energy employees involvedin this work hold at least a Masters degree in geology, geophysics, petroleum engineering or a relatedsubject or have at least five years of relevant experience in the practice of geology, geophysics or petroleumengineering.Basis of OpinionThe evaluation presented herein reflects our informed judgement based on accepted standards ofprofessional investigation, but is subject to generally recognised uncertainties associated with theinterpretation of geological, geophysical and engineering data. The evaluation has been conducted within67
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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
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 and 46: The Group is the operator and has a
Page 47 and 48: exploration wells. The total estima
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: ResourcesA summary of the gross Con
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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