The company had earlier agreed to buy a stake oilfield known as Oil Mining Lease, OML, 30 in a move expected to diversify its portfolio and significantly increase its production capabilities.
Under the deal, Heritage together with its Nigerian partner, Shoreline Power, would be buying 45 percent stake in OML 30 from oil majors Shell, Total and Eni.
They will also buy a further 45 percent stake in other assets under the joint operating agreement for OML 30, which includes a segment of the Trans Forcados pipeline, for a total cash consideration of $850 million, net of costs.
“The acquisition of OML 30 is transformational for Heritage, providing a material change in production and reserves,” Heritage chief executive officer, Tony Buckingham said in a statement.
Nigeria is Africa’s leading oil producer. Heritage said the OML 30 deal would increase its net production to around 11,350 barrels of oil per day (bopd) from 605 at present.
The acquisition will be financed by a $550 million secured bridge financefacility provided by Standard Bank of South Africa, and an underwritten rights issue raising proceeds of up to $370 million.