Prospectus re Admission to the Official List - Heritage Oil

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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
RPS EnergyHeritage Oil – Competent Persons Reportsteadily declined and during 2007 the average condensate yield was 40.9 stb/MMscf, while the LPG yieldhas increased to 27.2 stb/MMscf in 2007.3.2.4.2. DevelopmentThe Bukha field has been developed using a minimum facilities, unmanned platform with one sub-sea well(Bukha-1) and one platform-completed well (Bukha-2). Bukha-1 is tied to the platform via a 6’’ flexibleflow line of 1.2 km. The platform is connected to the onshore gas processing plant via a 16’’ carbon steelpipeline of 34 km.Cumulative production to the end of 2007 was approximately 199 Bscf reservoir gas, 13.1 MMstbcondensate and 4.5 MMstb LPG.3.2.4.3. Production ForecastsTo obtain a forecast for wet gas this year, the 2007 monthly data from January up to September 2007 wereused. RPS had no data for the subsequent months. The historic data suggests a clear decline in the gasproduction. However, field performance has exceeded RPS’s previous forecast (for 2006 year-endreserves). To this end, and honouring the most recent data, linear trends were fitted to a wet gas rate vs.cumulative wet gas plot to obtain 1P and 2P cases, and a hyperbolic trend was fitted for the 3P case(Figure 6).60Wet Gas Rate - HistoryWet gas rate 2007501P Forecast2P ForecastWet Gas Rate (MMscf/d)4030203P ForecastDec-071001998 2000 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019Figure 6: Bukha Wet Gas History and Forecast21FEB200823144965Condensate Gas Ratio (CGR) plotted against cumulative wet gas shows how the condensate yield changesalong with the field production. A clear and unique trend was visible in line with expected behaviour and itis been used for the 1P, 2P and 3P cases (Figure 7).81
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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
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which could have a materially adver
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Failure to obtain additional financ
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contractual or pricing terms, both
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years. In addition, since December
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UgandaUganda is among the poorest c
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Market Price of the Ordinary Shares
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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 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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