LONDON, UNITED KINGDOM--(Marketwired - Oct. 24, 2013) -
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Heritage Oil Plc ("Heritage" or the "Company") (TSX:HOC)(LSE:HOIL), an independent upstream exploration and production company, announces today that it has agreed with Kina Petroleum Limited ("Kina Petroleum") to farm-in to two licences onshore Papua New Guinea ("PNG").
- Two licences, Petroleum Prospecting Licence No:337 ("PPL 337") and Petroleum Prospecting Licence No:437 ("PPL 437") have gross areas of approximately 5,508 and 1,530 square kilometres respectively
- Heritage will earn a 70% working interest in PPL 337 and be appointed operator
- Heritage will initially earn a 30% working interest in PPL 437, with an option to acquire a further 20% interest and operatorship
- PPL 337 is an exploration licence with identified drillable prospects
- PPL 437 is located in a proven hydrocarbon system east of the Stanley Field and directly north of the Elevala and Ketu Fields and the recent Tingu-1 exploration discovery well
- The work programmes on both licences will progress rapidly with wells slated for 2014 on PPL 337
Heritage has agreed to acquire interests in two exploration blocks, PPL 337 and PPL 437, from Kina Petroleum. In return for earning a 70% working interest and operatorship in PPL 337, Heritage will fund the costs of drilling two shallow exploration wells. In addition, Heritage will make a $500,000 contribution to Kina Petroleum's back costs on the licence. In the event of a discovery, Heritage will carry Kina Petroleum's costs of up to 100 kilometres of appraisal seismic data.
In return for initially earning a 30% working interest in PPL 437, Heritage will carry Kina Petroleum's seismic acquisition costs for a minimum of 100 kilometres of data and make a $300,000 contribution to Kina Petroleum's back costs on the licence. Heritage will be the operator of the seismic work programme during this phase. In addition Heritage has an option to acquire a further 20% working interest from Kina Petroleum and operatorship of the licence by carrying them through the drilling of an exploration well.
Farm-in completion is expected within the short term, subject to customary conditions precedent including governmental approvals which the Company expects will be met.
PPL 337 is located within the south eastern part of the North New Guinea Basin, in the Ramu Sub Basin. Prospectivity has been confirmed within PPL 337 and to date three prospects and one lead have been identified on the licence. A local depocentre has been identified in proximity to mapped prospects in clastic and carbonate reef geological settings and the presence of gas seeps within the licence indicates an active petroleum system. The principal targets are the large Banam anticline with an area of over 200 square kilometres and potential reef structures in the north of the licence.
Legacy datasets, which include regional gravity and magnetic data and surface geological mapping, in addition to c.140 kilometres of 2D seismic acquired in 1997 and offset well data have been evaluated.
The two prospects proposed for drilling are the Kwila prospect, where a Pleistocene age clastic target has been mapped in the footwall of the Banam anticline, and the Raintree prospect where a Pliocene/Miocene age reef target has been identified in the north of the licence. Initial well planning has commenced to enable the testing of these prospects by the drilling of two shallow wells in 2014.
The licence has good access by road and is located near potential local gas markets as well as being close to the deep water port of Madang, which could be suitable for LNG export.
The licence was awarded to Kina Petroleum in 2009 and has an initial term of 6 years.
PPL 437 is located in a proven hydrocarbon system less than 20 kilometres north of the Elevala and Ketu c.1.0 TCF gas condensate fields and the recent Tingu-1 exploration discovery well.
Legacy datasets, which include regional gravity and magnetic data and surface geological mapping, in addition to c.250 kilometres of 2D seismic, have been evaluated.
The assessment of PPL 437 has confirmed prospectivity with several structural leads identified on legacy seismic. Heritage is now actively involved in the planning of the acquisition of further seismic data over these leads to mature them to drillable prospects.
The licence is located close to an existing gas pipeline from PNG LNG gas fields to the LNG plant in Port Moresby.
The licence was awarded to Kina Petroleum 80% and Cott Oil and Gas Limited 20% in February 2013 and has an initial term of 6 years.
Tony Buckingham, Chief Executive Officer, commented:
"We are pleased to announce the expansion of our acreage in Papua New Guinea which we consider to be an exciting region providing an excellent opportunity for highly commercial exploration in prolific hydrocarbon provinces. We believe these farm-ins to be key additions to our existing licence portfolio in Papua New Guinea, entered into earlier this year, and view this region as a core area of our exploration portfolio. The work programmes across the licences are progressing with a number of high impact wells slated for 2014."
A map of Heritage's licences in PNG is available on its website at www.heritageoilplc.com
Notes to Editors
- Heritage is listed on the Main Market of the London Stock Exchange. The trading symbol is HOIL. Heritage has a further listing on the Toronto Stock Exchange (TSX:HOC).
- Heritage is an independent upstream exploration and production company engaged in the exploration for, and the development, production and acquisition of, oil and gas internationally.
- Prior to the farm-in approval Kina Petroleum is the operator of both licences with 100% interest in PPL 337 and 80% interest in PPL 437. Cott Oil and Gas Limited holds the remaining 20% interest in PPL 437
- Heritage has producing assets in Nigeria and Russia and exploration assets in Tanzania, Papua New Guinea, Malta, Libya and Pakistan.
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Except for statements of historical fact, all statements in this news release - including, without limitation, statements regarding production estimates and future plans and objectives of Heritage - constitute forward-looking information that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from those anticipated in such statements. Factors that could cause actual results to differ materially from anticipated results include risks and uncertainties such as: risks relating to estimates of reserves and recoveries; production and operating cost assumptions; development risks and costs; the risk of commodity price fluctuations; political and regulatory risks; and other risks and uncertainties as disclosed under the heading "Risk Factors" in its Prospectus dated 6 August 2012, as supplemented by a supplementary prospectus dated 23 August 2012, and elsewhere in Heritage documents filed from time-to-time with the London Stock Exchange and other regulatory authorities. Further, any forward-looking information is made only as of a certain date and the Company undertakes no obligation to update any forward-looking information or statements to reflect events or circumstances after the date on which such statement is made or reflect the occurrence of unanticipated events, except as may be required by applicable securities laws. New factors emerge from time to time, and it is not possible for management of the Company to predict all of these factors and to assess in advance the impact of each such factor on the Company's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking information.