Prospectus re Admission to the Official List - Heritage Oil

RPS EnergyHeritage Oil – Competent Persons ReportIn previous reserves reports for Heritage, RPS has reviewed the geology of the field. As no new geologicalor geophysical data have been made available, the previous information was used as a basis for this report,updated with the 2006/07 production data.The time to depth conversion of the seismic interpretation is problematical in this region as there are rapidlateral velocity changes over the interval sea level to Top Ilam/Mauddud. The reasons for these velocityvariations are not precisely understood and would appear to be a complex interplay of several contributingfactors. To account for these velocity variations a number of different depth conversion methodologieshave been utilised to generate a range of possible structures and the resulting maps have been used togenerate minimum, most likely and maximum GRVs for reserve determination purpose.The Mauddud reservoir tends to be thin (c.50 m thick), while the Thamama is a thick unit (several hundredmetres), comprising several upward coarsening cycles with few effective intra-formational seals.The reservoirs are fine-grained low porosity limestones, with wackestone and grainstone textures. They arelayered, with dense zones, which may act as horizontal baffles or seals. Background matrix porosity is low(0-4 per cent.), but porosity spikes of up to 10 per cent. do occur. The Thamama tends to be slightly tighterthan the Mauddud reservoir. Stylolites are common, probably concentrated in the tight zones. In Henjam/West Bukha there are two higher porosity horizons, which are believed to be due to karstic erosion, andtherefore may be laterally continuous. The lower is better developed, and is located at the top of theMauddud. The upper karstic horizon is at the top of the Mishrif E unit.The presence and distribution of fractures is crucial to the ability of the reservoirs to sustain commercialflow rates. Fractures appear to be rarely sampled in cores, but are believed to be pervasive. Two issuesconcerning fractures are: 1) whether there is connectivity through the fractures between the verticallystacked reservoirs (so that a common GWC exists), and 2) what porosity cut-off to apply to the matrix,when permeability is so fracture dependant. The Mauddud and Thamama appear to be sealed from eachother by the Nahr Umr shale, which allows for stacked separate reservoirs and thus different GWCs(unless in communication via formations on the downthrown sides of faults).3.2.3. In Place VolumesProduction comes from both the Mauddud and the Thamama Formations, each of which should be treatedas an individual reservoir. In addition to the sensitivity provided by the range of GRVs described aboveseveral other factors affect the possible range of reserves in the Bukha Field. The most important of theseare the porosity cut-off used to define net reservoir and the GWCs assumed. None of the wells in the fieldintersects a GWC and therefore it is only possible to establish a lowest known gas level that can be used asa minimum case. The structural spill point can be used as a maximum case. The field operator (currentlyRak Petroleum PCL) carried out a volumetric evaluation to determine the range of possible GIIP values in2003. These were reviewed by RPS in the 2006 reserves review and they appear to a reasonable attempt tocapture the range of uncertainty. There have been no new data to revise these estimates.GIIP (Bscf)Reservoir p90 p50 p10Mauddud ....................................................... 110 182 284Thamama ....................................................... 143 231 330Total ....................................................... 297 417 565N.B. The totals are the p90, p50 and p10 of the stochastically consolidated distributionsTable 11: Range of GIIP for the Bukha Field (Full Field Interest)—from Novus Volumetrics Study February 20033.2.4. Petroleum Engineering3.2.4.1. Reservoir Temperature, Pressure and Gas PropertiesReservoir properties at the time of discovery were a pressure of 7,147 psig and a temperature of 295F.Currently pressures from Bukha-1 and Bukha-2 are about 350 psia.The Bukha field is a gas ‘‘condensate’’ reservoir (in the Thamama and Mauddud Formation). Historicproduction data indicate that the field came off a plateau (of about 43 MMscf/d) in 2003 and average wetgas rates in 2007 were around 23.3 MMscf/d. The condensate yield from the field was initially above100 stb/MMscf. As the field is produced by depletion only (i.e. without pressure support) the yield has80