Heritage Oil boosts production by nine per cent

Heritage Oil, an independent upstream exploration and production company, has posted a nine per cent increase in third quarter production over the first half of the year, totalling 617 barrels of oil per day (bopd).

The company also revealed that its year end production exit rate for will increase to around 11,350 bopd, compared to an average production of 617 bopd in the third quarter 2012.

Tony Buckingham, Chief Executive Officer, said: "It has been an exciting time for Heritage Oil as we have completed a significant acquisition providing the Company with cash generating assets and a substantial increase in our reserves and production outlook. Our interest in Nigeria provides a new direction for the Company and a larger foundation upon which we can build.

"The current management team has been very successful in value creation for Heritage, generating cash of over $2bn from asset sales in the last decade."

On November 9th the company, alongside its local Nigerian partner, Shoreline Power Company, completed the acquisition of a 45% participating interest in a producing oil mining licence in Nigeria (OML 30), together with a 45% interest in other assets under the joint operating agreement for OML 30.

The acquisition has resulted in a significant increase to the net proved and probable reserves of Heritage, which increased from 65m barrels to 412m barrels (gross of royalty).

Regionally, the company expects that the extended well test on the Miran West-1 well will begin in December and will last for a maximum period of six months. The resulting planned production of 3,000 to 5,000 barrels of oil gross per day will be sold into the local market in Kurdistan.

The Miran East-1 exploration well is the first well to be drilled on the Eastern structure and as at November 14th, the well has reached a depth of 4,850 metres and evaluation of the well is ongoing.

In Russia, production for the third quarter of 2012 averaged 617 bopd, a 9% increase over the first half of the year, due to resolution of a temporary mechanical issue on well 363. Work is ongoing for developing the field using horizontal drilling techniques following the success of the well drilled last year.

At the end of September the company had about $172m in cash, excluding amounts related to the Uganda tax dispute of approximately $405m.

NR