Prospectus re Admission to the Official List - Heritage Oil

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RPS EnergyHeritage Oil – Competent Persons ReportWet Gas Rate (MMscf/d)706050403020Wet Gas Rate - HistoryWet gas rate 2007October 2007 cut offCondensate YieldCondensate yield 2007Condensate match140120100806040Condensate yield (bbls/MMscf)HistoryForecast1020000 50 100 150 200 250 300Cumulative Gas (Bscf)Figure 7: Condensate Yield vs. Cumulative Wet Gas Production21FEB200823150473In order to create a LPG forecast, a plot of LPG yield vs. cumulative wet gas was inspected (Figure 8). Inprevious years, the historical data appeared to be following a quite steady line, but in recent years it hascome to follow the typical behaviour of C 3 and C 4 fractions in a typical gas condensate reservoir. Apolynomial equation was fitted to the historical data for the 1P case and another polynomial equation wasfitted for the 2P and 3P cases.LPG is split into its components C 3 and C 4 based on sales statements from 2007, that being 43 per cent. forpropane and 57 per cent. for butane.6035503025Wet gas rate (MMscf/d)40302010Wet Gas Rate - HistoryWet gas rate 2007October cut offLPG Yield1P Forecast2P & 3P ForecastHistoryForecast2015105LPG yield (bbls/MMscf)000 50 100 150 200 250 300Cumulative wet gas (Bscf)Figure 8: LPG yield vs. Cumulative Wet Gas Production21FEB2008231538503.2.5. Interaction with the West Bukha FieldAfter considering the impact of the West Bukha production coming on stream via the Bukha platform,changes were made to make the forecast more realistic (4) . West Bukha will flow at high pressures initially,such that the Bukha wells, now flowing at low wellhead pressures with chokes fully open, will not be able to82
RPS EnergyHeritage Oil – Competent Persons Reportflow against the higher back-pressure. The forecast for the West Bukha production start-up has beenassumed, conservatively, by RPS to be January 2009 although the Operator has advised Heritage thatproduction is targeted for 3 rd Quarter 2008. It has been assumed that Bukha will cease productiontemporarily while West Bukha pressures remain high.West Bukha will reach a point when the flowing pressure will be sufficiently low that the Bukha field wouldbe brought back into production and both fields would produce at the same time through the samepipeline to the Ras Al Khaimah Gas Commission (‘‘RAKGAS’’) plant.3.3. West Bukha FieldThe West Bukha/Henjam gas field is located in the Straits of Hormuz approximately 22 km west of theBukha field in about 90m of water. The field straddles the border between Iran and Oman. The field wasdiscovered in 1975 by the Henjam-1 well in Iran and was subsequently appraised with Khasab-1, drilled byElf in Oman in 1977. Khasab-1 was drilled off structure and encountered water. A second appraisal well,West Bukha 1, drilled in 1987 by IPC found gas condensate but at the time failed to produce commercialrates. The National Iranian Oil Company (NIOC) acquired 3D seismic over the field and approximately80 per cent. of the area covered was made available to the Block 8 licence holders.It is understood that attempts to negotiate a possible joint field development with Iran and Oman failed toproduce an agreement. Although such negotiations are continuing, the Block 8 partnership has sincedecided to pursue an Oman only development. Heritage advises that the Operator has secured agreementfrom the Sultan of Oman’s government to develop the field. However, public domain data from NIOC inIran suggests that an Iranian development is likely to proceed imminently. RPS is not in a position to opineon the legal status of the development.3.3.1. DatabaseThe West Bukha field is covered by 2D seismic acquired from 1974-1986, this data is poor quality. TheIranian National Oil Company acquired a 3D survey over the West Bukha field which covers the Omanand Iranian parts of the field. This survey is high frequency in the upper section but very good quality atthe reservoir depth. The West Bukha 3D has been depth migrated, this data was used prior to the drillingof the West Bukha-2 well where it was found that velocities had been inaccurately modelled. Well Datafrom four wells was made available, West Bukha-1, West Bukha-2, Henjam-1 and Khasab-1. Full log suiteswere made available for these wells as well as geological and test data. A static geological modelwas provided.3.3.2. Geology & GeophysicsThe field consists of a single contiguous NW-SE trending fault and dip closed structure covering an area ofapproximately 62 sq km. Fractured carbonate reservoirs occur within the Cretaceous Ilam, Mishrif,Mauddud and Thamama Formations at depths of between 3,600 and 4,200 m TVDSS. There isconsiderable variation in thickness of the Ilam and Mishrif Formations linked to sedimentary depositionalong a carbonate shelf edge. The Ilam and Mishrif Formations are thickest in Iran where, in Henjam 1,they attained a gross thickness of more than 100 m whilst within the field boundary in Oman theseformations thin to around 50 m. The Mauddud Formation has an average thickness of approximately 80 mthroughout the field and is separated from the underlying Sabsab and Thamama Formations by the NahrUmr shale with an average thickness of 136 m. The Sabsab and Thamama reaches a total thickness ofaround 400 m.The Operator and Heritage have interpreted three horizons across the West Bukha field; Top Ilam, TopNahr Umr and Top Thamama. The first two horizons define the structural envelope of theMishrif-Mauddud reservoir (Figure 9).(4) We note that this consequence has been previously ignored. However, the operator has stated (Sept.07 OCM Minute) that heexpects Bukha production to cease once West Bukha comes on stream.83
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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
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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
Page 83: 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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