LONDON, UNITED KINGDOM--(Marketwire - June 20, 2011) -
THIS PRESS RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.
Heritage Oil Plc (News - Market indicators)(LSE:HOIL), an independent upstream exploration and production company, announces 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
- Appraisal drilling continuing in Kurdistan with the Miran West-3 well scheduled to spud in approximately six weeks
- Exploration drilling to commence on the contiguous Miran East structure in Q4, 2011
- 3D seismic survey over the entire Miran structure is well advanced
- 2D seismic survey over the southern parts of the Miran Block planned to commence in the summer
- Development plans continue for the Miran Field, with early phased production expected to commence in 2013
- Commenced drilling well 363 in the Zapadno Chumpasskoye Field, Russia, in May 2011
- Exploration work programmes are progressing in Tanzania, Mali and Malta
- Share buy back programme continues with approximately 8 million Ordinary Shares acquired to date and held in treasury
- The Company has a strong balance sheet and will continue to consider value adding opportunities. As at 31 March 2011, Heritage had a cash position of more than US$570 million, excluding amounts related to the tax dispute of approximately US$405 million
- Arbitration proceedings commenced in London against the Government of the Republic of Uganda in May 2011
Kurdistan Region of Iraq
In January 2011, Heritage announced the discovery of the largest gas field in Iraq for the last 30 years. The hydrocarbon volumes of the Miran Field were re-evaluated following testing of the Miran West-2 well, and management estimates in-place volumes for the Miran West structure to have a P90-P50 range of 6.8-9.1 TCF, with an upside P10 potential of 12.3 TCF of gas. Miran East has an additional estimated P90-P50 gas in-place range of 0.6-0.9 TCF with a P10 upside of 1.3 TCF. This is in addition to the estimated P50-P90 range of 42-71 MMbbls of condensate and 53-75 MMbbls of oil.
Appraisal drilling on the Miran structure continues at the beginning of August with the Miran West-3 well which will be an angled well targeting the flanks of the Jurassic structure. The well bore will be designed to optimally intercept the fracture networks with the benefit of the current 3D seismic survey. It is planned that two rigs will be drilling by the end of the year with exploration drilling on the Miran East structure.
The 3D seismic acquisition across the Miran structure is progressing well and is being analysed in separate tranches to expedite understanding of the structure. Interpretation of the first fast track data is anticipated to start shortly. The seismic survey was extended by approximately 35% after the success of the Miran West-2 well and acquisition of the original survey is nearly complete. In addition, a 2D seismic survey over the southern parts of the Miran Block is planned to commence in the summer which will define other potential prospects on the Block.
The conceptual study for the Miran gas development and processing facilities has begun. The initial priority will be to satisfy local gas demand by supplying produced gas, on commercial terms, to local power stations and other end-users in the Sulymaniyah region in 2013. Discussions with the Kurdistan Regional Government continue. Early production of the gas will also result in early associated condensate and oil production with full production of the Field expected to commence in 2015 with exports to Turkey/Europe.
Other Operations
In Malta, a seismic vessel has been mobilised to start acquisition of a 1,400 kilometre 2D seismic survey in Area 7 over the large Caravaggio target. Acquisition is expected to begin within two weeks. Processing and interpretation of this data, during the second half of 2011, will help define a precise drilling location.
In Mali, approximately 850 kilometres of 2D seismic data was acquired on Block 11 and it is expected that a survey on Block 7 will commence at the beginning of July. Data quality is good and areas of interest have been identified.
In Tanzania, interpretation of the 3D data is ongoing. Wells are planned for Tanzania and Mali in 2012.
Well 363 in the Zapadno Chumpasskoye Field, Russia, commenced drilling in May and has the potential to significantly increase production.
CORPORATE
As at 31 March 2011, Heritage had a cash position of more than US$570 million, excluding amounts related to the tax dispute of approximately US$405 million, which is more than sufficient to cover the current 2011 work programme.
On 26 April 2011, Heritage announced the commencement of a share buy back programme of up to US$100 million. To date 7,967,676 Ordinary Shares have been bought back and are held in treasury.
Tony Buckingham, Chief Executive Officer, commented:
"Operationally, Heritage is busy with active work programmes across the portfolio. Exploration, appraisal and development activity is increasing in Kurdistan over the second half of the year. Work programmes on our other operations are progressing well with a diversified exploration drilling programme planned in 2012. In addition, Heritage has a strong balance sheet to continue buying back shares or to pursue opportunities to generate value. We continue to appraise a number of opportunities which have the potential to add considerable shareholder value and look forward to announcing these in the second half of this year."
Notes to Editors
- Heritage is listed on the Main Market of the London Stock Exchange and is a constituent of the FTSE 250 Index. The trading symbol is HOIL. Heritage has a further listing on the Toronto Stock Exchange (News - Market indicators).
- Heritage is an independent upstream exploration and production company engaged in the exploration for, and the development, production and acquisition of, oil and gas in its core areas of Africa, the Middle East and Russia.
- Heritage has a producing property in Russia and exploration projects in the Kurdistan Region of Iraq, the Democratic Republic of Congo, Malta, Pakistan, Tanzania and Mali.
- All dollars are US$ 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 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.
