Shares in Heritage Oil, the petroleum explorer and producer with operations in Iraqi Kurdistan, have been suspended following the announcement of a major acquisition in Nigeria.
Together with a local Nigerian partner, Shoreline Power Company Limited, the company has reached agreement to acquire a 45% participating interest in a producing oil mining lease in Nigeria ("OML 30"), together with a 45% interest in other assets under the joint operating agreement for OML 30, for a total cash consideration of US$850 million net of costs.
The assets will be bought from Shell, Total and ENI, who each own participating interests of 30%, 10% and 5%, respectively. The remaining 55% participating interest is held by the Nigerian National Petroleum Corporation ("NNPC").
The proposed acquisition is classified as a reverse takeover and consequently the Heritage Shares will be suspended with effect from Monday 2 July 2012 until further information on the proposed acquisition is published.
Tony Buckingham (pictured), Chief Executive Officer of Heritage, commented:
"The acquisition of OML 30 is transformational for Heritage, providing a material change in production and reserves whilst pursuing our strategy of generating shareholder value. As part of Heritage's diversified portfolio of exploration, appraisal and development assets, OML 30 is expected to provide significant production and cash flow, thereby de-risking Heritage's financial profile, and our technical expertise will provide a comparative advantage in creating additional value.
"Heritage is very excited to be participating in the development of OML 30 and entering at an attractive valuation. We look forward to continuing to build local relationships and partnerships with the communities in the delta region and creating a platform to build a substantial presence in Nigeria."