Heritage Oil Gains on Kurdistan Update

Other Assets

Work programmes are progressing across the remainder of Heritage's exploration portfolio assets. Acquisition of 300 square kilometres of 3D seismic is due to begin shortly on the offshore Latham Block in Tanzania and acquisition of approximately 800 kilometres of 2D seismic is scheduled to commence in Block 11 in Mali during December.  Acquisition and processing of this data will help to establish locations for drilling in the second half of 2011.  In addition, Heritage is planning the acquisition of 1,000 kilometres of seismic in Malta for early 2011. Drilling will commence on the Zamzama North Block, Pakistan, when the flood waters subside which is anticipated to be during the first half of 2011.

PRODUCING ASSET

Russia

Production for the third quarter of 2010 averaged 516 bopd, an increase of approximately 22% compared to the third quarter of 2009.  Further well optimisation work is planned for late this year and work is progressing on preparations for further development drilling.  The drilling of a horizontal well is planned to commence during the first quarter of 2011 to test the viability of horizontal wells for field development.

CORPORATE

As at 30 September 2010, Heritage had a cash position of $614 million, excluding reserved amounts relating to the tax dispute in Uganda. Following completion of the sale of the Ugandan working interests on 26 July 2010, Heritage deposited $121.5 million with the Uganda Revenue Authority and placed $283.5 million in escrow.

Heritage's strong balance sheet will facilitate acceleration of exploration, appraisal and development programmes in its asset portfolio and will support the ongoing initiative to seek attractive terms for participation in other opportunities to generate further value for shareholders. Heritage therefore continues to actively appraise opportunities to enhance its asset portfolio.

Tony Buckingham, Chief Executive Officer, commented:

"We are encouraged by our progress in Kurdistan where we have encountered hydrocarbon shows in the initial Cretaceous objectives and in the deeper exploration targets in the Miran West-2 well.  As a consequence, we have commenced extensive testing of target formations and expedited a large 3D seismic programme across the Block.  We look forward to completing our Miran testing programme."

Comments are closed.