Heritage Oil Plc
TSX : HOC
LSE : HOIL

Heritage Oil Plc

June 20, 2013 09:00 ET

Heritage Provides an Operational Update

LONDON, UNITED KINGDOM--(Marketwired - June 20, 2013) -

THIS PRESS RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

Heritage Oil Plc (TSX:HOC)(LSE:HOIL), an independent upstream exploration and production company, provides an operational update to accompany its Annual General Meeting, taking place at 3:00 pm (BST) today at 22 Grenville Street, St. Helier, Jersey.

Highlights

  • Gross production on the OML 30 licence, Nigeria, at rates of over 35,000 bopd with all the key fields in production
  • Work programme on OML 30 continues with the focus on gas lift optimisation
  • Seismic acquisition and processing completed on the Rukwa licence, Tanzania, with the first well planned in 2014
  • Encouraging results from reconnaissance seismic confirming the presence of structural features on the Kyela licence, Tanzania
  • Seismic acquisition has completed on the Tuyuwopi structure, Papua New Guinea, and initial well studies are underway to enable drilling in early 2014

Nigeria

Operations continue in line with expectations on OML 30, as indicated in the release dated 12 June 2013. Gross production from OML 30 has returned to rates of over 35,000 bopd and all of the key fields are in production. The focus for the second half of the year remains on gas lift optimisation and the installation of new equipment which will enable the fields to increase production sharply over the remainder of the year in line with management forecasts. The drilling of new wells, planned to commence in the second half of 2014, should provide a significant increase to production with the longer term potential estimated at approximately 300,000 bopd gross.

Tanzania

The work programmes continue on the Rukwa and Kyela licences. Processing of approximately 600 kilometres of 2D seismic in the Rukwa licence is now complete and interpretation has begun. This consists of both lake and land data and was targeted at leads identified on the legacy seismic data. An initial review is encouraging with good quality seismic enabling imaging of the basin margin fault. A comprehensive drilling logistics study has commenced on the Rukwa licence to identify options for a land-based drilling operation. Drilling is anticipated to commence in 2014.

Interpretation of approximately 100 kilometres reconnaissance seismic survey across the Kyela licence is complete, with seismic data confirming the presence of tilted fault blocks and general structural features identified on high resolution gravity data. Planning is underway for the acquisition of a targeted infill seismic programme to enable detailed mapping of these structural features. This is due to commence later in the fourth quarter. Additionally, a detailed geochemical micro-seep survey on the Kyela licence is due to commence in the second half of 2013. The results of this will assist in the ranking of potential drill locations identified on the seismic and high-resolution gravity survey.

Papua New Guinea

The work programme has begun with the acquisition of 62 kilometres of 2D seismic data over the Tuyuwopi structure in PPL 319. This has confirmed a drilling location and plans are underway to drill the prospect in early 2014. Seismic acquisition has been halted during the current rainy season and is expected to resume in the fourth quarter over the remaining leads identified.

The licences are onshore, and close to multiple producing fields and discoveries, including the multi-TCF Elk/Antelope and Triceratops discoveries. There is also a close proximity to current infrastructure with the Kutubu oil export pipeline and the PNG Liquefied Natural Gas pipeline crossing the acreage.

CORPORATE

As at 31 March 2013, Heritage had a cash position of approximately US$184 million, excluding amounts related to the Uganda tax dispute of approximately US$405 million, which is more than sufficient to cover planned work programmes into 2014. The refinancing of the bridge loan to a reserve based loan is expected to be closed very shortly, at which time the funds from Shoreline Power exercising their option are also due to be received.

Tony Buckingham, Chief Executive Officer, commented:

"Good progress is being made across the portfolio with production levels back over 35,000 bopd gross for OML 30, Nigeria. Further production gains are anticipated in the second half of this year through gas lift optimisation and the installation of new equipment which will generate substantial revenue. The exploration portfolio remains active with continued work programmes in Tanzania and Papua New Guinea. We remain on track to meet our production target for the full year and are positioning ourselves for drilling across our portfolio in 2014."

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.
  • Heritage has producing assets in Nigeria and Russia and exploration assets in Tanzania, Papua New Guinea, Malta, Libya and Pakistan.
  • All dollars are US$ unless otherwise stated.

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FORWARD-LOOKING INFORMATION:

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.

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