Heritage Oil Down Slightly on Results

Shares in Heritage Oil (LSE: HOIL) closed down 2% on Wednesday following the announcement of its results for the twelve months ended 31 December 2011:

2011 Operational Highlights

  • Awarded new licences in Tanzania which Heritage believes could be geologically analogous to the Lake Albert Basin, providing the Company with a key advantage in assessing the blocks
  • Entered Libya through an acquisition which makes Heritage well placed to be able to play a significant role in the future development of the oil and gas industry in Libya
  • Appraisal drilling, in Kurdistan, commenced on the Miran West-3 well and results to date have confirmed oil in the Upper Cretaceous and gas in the Lower Cretaceous and Jurassic reservoirs
  • An interval, above the main Jurassic reservoir, in the Miran West-3 well has recently been tested and resulted in a flow of up to 17.5 MMscfd of dry gas
  • Acquired seismic on the southern portion of the Miran Block which has identified the presence of a structure capable of containing additional resources
  • Completed seismic in Mali, Malta and Tanzania
  • Drilled first horizontal well in Russia which exceeded pre-drill expectations resulting in a year-on-year increase in production of 24%

2011 Financial Highlights

  • Cash of $311 million, excluding amounts relating to the Ugandan tax dispute
  • Production averaged 673 bopd, an increase of 24% from 2010 levels
  • Average realised price of $36.9/bbl, an increase of 45% from 2010 levels
  • Total cash capital expenditures increased to $135 million


  • Miran East-1 well commenced drilling in March 2012 with results expected at the end of the third quarter 2012
  • Further test results expected from the Miran West-3 well
  • Undertaking work to identify a suitable drilling location in the southern portion of the Miran Block
  • Work programmes are commencing in Tanzania on newly awarded acreage
  • Planning for a high-impact exploration well offshore Malta
  • Actively looking for further opportunities

Tony Buckingham (pictured), Chief Executive Officer, commented:

"2011 has been a year in which we have enhanced the asset portfolio through the addition of acreage, investing in opportunities and through existing work programmes. We currently have two rigs drilling in Kurdistan and are reviewing results from seismic campaigns that could provide future growth in the portfolio. We are looking to further develop the existing portfolio and continue to look for value generating opportunities within our core areas."

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