Prospectus re Admission to the Official List - Heritage Oil

RPS EnergyHeritage Oil – Competent Persons Report1.2. LiabilitiesThe work programmes associated with the PSAs in Uganda and Kurdistan are discussed in Section 7. Inaddition to the exploration work programme in the Kurdistan PSA, there is also a commitment to build asmall refinery, which should have a capacity of 20,000 barrels of oil per day, in strategic partnership withthe Kurdistan Regional Government (KRG). Heritage has advised that the refinery is scheduled to beoperational to design specification within approximately two years. RPS has not considered the costliability or potential revenues from this refinery project in the notional evaluation of Miran.2. METHODS USED IN THIS REPORT2.1. GeneralThe evaluation presented in this Competent Persons Report (‘‘CPR’’) has been conducted within ourunderstanding of petroleum legislation, taxation and other regulations that currently apply to theseinterests. RPS is not in a position to attest to the property title, financial interest relationships orencumbrances related to the properties.Our estimates of potential resources and risks are based on the limited data set available to, and providedby, Heritage. We have accepted, without independent verification, the accuracy and completeness ofthese data.Volumes and risk factors are presented in accordance with the 2007 SPE/WPC/AAPG/SPEE PetroleumResource Management System (See Section 2.2).2.2. Reserves and Resource ClassificationReserves or resources are estimated according to the 2007 SPE/WPC/AAPG/SPEE Petroleum ResourceManagement System (PRMS). The PRMS Definitions are summarised in Appendix B.In estimating reserves and resources we have used standard petroleum engineering techniques. Thesetechniques combine geological and production data with detailed information concerning fluidcharacteristics and reservoir pressure. RPS has estimated the degree of uncertainty inherent in themeasurements and interpretation of the data and has calculated a range of recoverable reserves. RPS hasassumed that the working interest in each asset advised by Heritage is correct and RPS has not investigatednor does it make any warranty as to Heritage’s interest in these properties.Hydrocarbon resource and reserve estimates are expressions of judgement based on knowledge,experience and industry practice and are restricted to the data made available. They are thereforeimprecise and depend to some extent on interpretations, which may prove to be inaccurate. Estimates thatwere reasonable when made may change significantly when new information from additional explorationor appraisal activity becomes available.2.3. Risk AssessmentFor all prospects and appraisal assets estimates of the commercial chance of success for ContingentResources and estimate of geological chance of success for Prospective Resources have been made. InPRMS the former is called Chance of Development (CoD) and the latter Chance of Discovery (also CoD)in the PRMS system. To avoid confusion with acronyms we have used the term Geological Probability ofSuccess (GPoS) in this document synonymously with Chance of Discovery.2.3.1. Contingent ResourcesThe chance of success in this context means the estimated chance, or probability, that the volumes will becommercially extracted.A Contingent Resource includes both proved hydrocarbon accumulations for which there is currently nodevelopment plan or sales contract and proved hydrocarbon accumulations that are too small or are inreservoirs that are of insufficient quality to allow commercial development at current prices. As a result theestimation of the chance that the volumes will be commercially extracted may have to address bothcommercial (i.e. contractual or oil price considerations) and technical (i.e. technology to address lowdeliverability reservoirs) issues.77