Heritage Oil Announces Interim Results

Heritage Oil has announced its interim results for the six months ended 30 June 2011.

Operational Highlights

·         Miran West-3 well in the Kurdistan Region of Iraq (“Kurdistan”), commenced drilling on 7 August 2011
·         Miran 3D seismic acquisition is nearing completion and 2D seismic acquisition in the southern portion of the Miran Block has commenced
·         Miran Field conceptual engineering studies have been completed for early development in 2013, followed by full field development in 2015
·         An initial gas marketing study for the Miran Field has been completed
·         Completed drilling well 363 in Russia which is producing 1,205 bopd
·         Completed acquisition of 2D seismic data in both Mali and offshore Malta
·         Seismic data being processed and interpreted for Tanzania, Mali and Malta
·         Net average daily production of 420 bopd in the first half of 2011

Corporate Highlights

·    Strong balance sheet with cash of approximately $468 million, excluding $405 million related to the tax dispute

·    Share buy back programme commenced in April 2011 and to date 28,556,281 Ordinary Shares have been bought back and held in treasury

·    12.46% of PetroFrontier Corp. acquired for investment purposes

·   Arbitration proceedings have commenced in London against the Government of the Republic of Uganda (the “Ugandan Government”) to resolve the tax dispute

·    Implemented internal systems for managing requirements of the UK Bribery Act which became law in July 2011

Outlook

·    Multiple reservoir intervals to be tested and evaluated in the Miran West-3 well during the second half of 2011 as the well is drilled to a target depth of c.4,400 metres

·    Exploration drilling on the Miran East structure planned to commence in December 2011, at which time two rigs will be operational in the field

·    Final processing of 3D seismic data on the Miran Field is scheduled to be completed in the fourth quarter of 2011

·    Work programmes in Tanzania, Mali and Malta continuing

·    A further development well planned for Russia in the fourth quarter of 2011

·    Production from the Zapadno Chumpasskoye Field, in Russia, expected to continue to increase

·    Active assessment of new acquisitions and opportunities continues

Tony Buckingham, Chief Executive Officer, commented:

We have started the second half of the year with a strong balance sheet, an active multi-well exploration and appraisal drilling programme in Kurdistan and increased production following the success of our first horizontal well in Russia. We continue to assess opportunities to acquire and invest in exploration and early development opportunities throughout the world, with a particular emphasis on our core areas of Africa and the Middle East where we have a strong technical understanding and an established network of contacts.

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