Heritage Oil agrees farm-in with LNG Energy

Heritage Oil has expanded its exploration portfolio after shaking hands with LNG Energy on an agreement to farm-in two licences onshore Papua New Guinea (PNG), of which Heritage will be appointed operator.

The licences, namely petroleum prospecting licence no. 319 and petroleum retention licence no. 13, have gross areas of around 2,025 and 160 sq km, respectively, and are located in a known hydrocarbon bearing region.

On completion of the agreement, Heritage will earn an 80% working interest in both licences in return for funding the costs of the seismic acquisition and the cost of drilling an exploration well. In addition Heritage will make a $4.0m contribution to LNG Energy's back costs on the licences.

Seismic was recently acquired on licence 319, and further seismic acquisition, and drilling, is expected with the expansion of the work programme.

Chief Executive Officer Tony Buckingham said: "We are delighted to announce the expansion and diversification of our exploration portfolio with this entry into Papua New Guinea. We look forward to developing and accelerating the work programme as this acreage provides the opportunity to discover large gas deposits at a time when regional and global gas demand is increasing.

"We consider the region to be an attractive area both commercially and technically for supplying the premium East Asian gas markets."

The completion of the farm-in is expected in the short term, the group added.

The share price rose 0.84% to 180p by 08:30.

NR