Heritage Oil reports leap in Nigerian well reserves

Independent consultants have beefed up the reserves estimate for Heritage Oil's Oil Mining Lease (OML) 30 in Nigeria.

The upstream exploration and production company said gross proved-plus-probable (2P) reserves at OML 30 are 58% higher than originally estimated, with reserves now totalling 1,114m barrels, of which 396m are net to Heritage.

The value of the reserves at OML 30, Nigeria, is estimated to be between $3,089m and £3,789m, depending on the income tax scenario.

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Elsewhere, the 2P reserves net to Heritage at the Zapando Chumpasskoye field in Russia were revised at the end of March to 65m barrels, the economic valuation of which is estimated at $336m.

Moving on to the Miran field in the Kurdistan Region of Iraq, this has contingent resources of 366m barrels of oil equivalent, comprising 53m barrels of oil and condensate and 1,815bn cubic feet of gas, resulting in a mean net entitlement volume to Heritage of 136m barrels of oil equivalent. Heritage has a working interest of 56.25% in this field.

In terms of prospective resources at the site, 142m barrels of oil equivalent, comprising 96m barrels of oil, 256bn cubic feet of gas and condensate of 3.1m barrels are net to Heritage.

Tony Buckingham, Chief Executive Officer, said: "This independent report, assessing OML 30 and certain existing assets, highlights the strength of our current portfolio and the transformational nature of the proposed acquisition of OML 30 which creates shareholder value and is cash generative upon completion.

"The economic valuation of between $3.4bn and $4.1bn given for the current 2P reserves at OML 30 and our assets in Russia underlines the significant opportunity we have to create substantial value for shareholders. There is considerable upside in OML 30 which has not been assessed in the CPR [competent person's report], notably gas in the licence, estimated by management at 2.5trn cubic feet, as well as undeveloped reservoirs and behind pipe reserves in some of the developed reservoirs that have not currently been targeted with new wells.

"These additional resources could provide further significant upside which has not been quantified in the CPR. Also, significant value exists for the contingent and prospective resources within the Miran Field that has not been estimated in this report due to the classification as resources."

NR