Heritage Announces Publication of Competent Persons Report Including Analysis of OML 30, Nigeria

Heritage Announces Publication of Competent Persons Report Including Analysis of OML 30, Nigeria

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, SOUTH AFRICA AND JAPAN
Heritage Oil Plc (TSX:HOC)(LSE:HOIL) (“Heritage” or the “Company”), an independent upstream exploration and production company, is pleased to announce the publication of an independent Competent Person’s Report (“CPR”) compiled by industry specialists RPS Energy Consultants Limited (“RPS”). On 29 June 2012, Heritage announced the proposed acquisition of a major interest in Oil Mining Lease 30 in Nigeria (“OML 30”) and this CPR has been commissioned to provide independent reserve and resource information and a valuation of OML 30, together with an update on certain existing assets in Heritage’s portfolio.
The range of reserves and resources is as at 31 March 2012 and is based on the data and information available up until that date. The CPR assumes that the acquisition of OML 30 completes on 1 September 2012. All volumes are stated net of royalties unless otherwise stated.
Highlights:
— OML 30, Nigeria;
— Gross Proved plus Probable reserves(1): 1,114 million barrels, 58%
higher than management estimates as set out in the announcement
issued by the Company on 29 June 2012
— Proved plus Probable net entitlement reserves to Heritage: 396
million barrels of oil
— Economic valuation of Proved plus Probable reserves estimated at
between US$3,089 million and US$3,789 million, depending on the
income tax scenario (post-tax, net Heritage share, assuming a 10%
discount rate)
— Zapadno Chumpasskoye Field, Russia;
— Proved plus Probable net entitlement reserves to Heritage: 65
million barrels of oil
— Economic valuation of Proved plus Probable reserves estimated at
$336 million (post-tax, net Heritage share, assuming a 10% discount
rate)
— Miran Field, Kurdistan Region of Iraq (“Kurdistan”);
— Contingent Resources – mean estimate of Heritage working interest of
56.25%, gross of royalty: 366 million barrels of oil equivalent,
comprising 53 million barrels of oil and condensate and 1,815
billion cubic feet of gas, resulting in a mean net entitlement
volume to Heritage of 136 million barrels of oil equivalent
— 2C estimate of net entitlement to Heritage of Contingent Resources:
130 million barrels of oil equivalent, comprising 15 million barrels
of oil and condensate and 669 billion cubic feet of gas based on
Heritage interest of 56.25%
— Prospective Resources – mean(2) un-risked estimate of working
interest of 56.25% to Heritage, gross of royalty: 142 million
barrels of oil equivalent, comprising 96 million barrels of oil, 256
billion cubic feet of gas and condensate of 3.1 million barrels
Tony Buckingham, Chief Executive Officer, commented:
“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 US$3.4 billion and US$4.1 billion 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, notably gas in the licence, estimated by management at 2.5 TCF, 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.”
For further information please refer to www.heritageoilplc.com.
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