A Review of the Nigerian Energy Industry

Heritage Oil seeks $370m for acquisition of Nigerian asset

06 August 2012, Sweetcrude, LONDON – London-listed independent oil and gas exploration and production company, Heritage Oil announced Monday that it aims to raise $370 million through a rights issue to help pay for the acquisition of a 45% interest in OML 30 in Nigeria.

Tony Buckingham, Chief Executive Officer, who made the disclosure, said the Nigerian asset would provide oil and cash that would go to improve his company’s financial profile.

“We are delighted to have entered into an agreement to acquire a significant interest in the transformational OML 30 in Nigeria. OML 30 is expected to provide significant production and be cash flow generative immediately, thereby de-risking Heritage’s financial profile,” he said.

According to him, a recently published independent reserves report “gave an economic valuation of between US$3.4 billion and US$4.1 billion, using a discount rate of 10%, for the current 2P reserves at OML 30 and our assets in Russia,” highlighting the underlying value within the company’s enlarged portfolio.

He added that his company’s long term outlook is supported from full development of Miran field in Kurdistan and OML 30 field in Nigeria while short-medium term outlook is buoyed from the rising production from its Russian field and early development of Miran field.

It plans to conduct an extended well test on the Miran reservoirs to sell between 3,000 and 5,000 bopd into the local market in Kurdistan.

Heritage Oil also announced that its production averaged 567 barrels of oil per day (bopd) in the first half of 2012, up 35% from a year earlier, and reached 711 bopd in July.

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