Heritage Oil Announces Results for the Year Ended 31 December 2013

Heritage Oil Announces Results for the Year Ended 31 December 2013

Heritage Oil Plc (TSX:HOC)(LSE:HOIL) (“Heritage” or the “Company”), an independent upstream exploration and production company, announces its results for the twelve months ended 31 December 2013. All figures are in US dollars unless otherwise stated.
2013 Operational Highlights
— Production from OML 30, Nigeria, increased during the year and record gross production since acquisition, of over 50,000 bopd has been achieved
— Maintenance work over OML 30 is progressing as planned
— 2013 average production from the interest in OML 30, Nigeria, net to Heritage of 8,919 bopd and net production from Russia of 577 bopd
— Continued the work programme in Tanzania through processing of 2D seismic data on Rukwa which has identified several prospects in the
retained Rukwa South licence area. A geochemical survey of the Kyela licence has been completed and interpretation of the data is proceeding
to schedule
— Expanded the exploration portfolio with the farm-in to four licences in Papua New Guinea (“PNG”); Petroleum Prospecting Licence 319 (“PPL 319”),Petroleum Retention Licence 13 (“PRL 13”), Petroleum Prospecting Licence 337 (“PPL 337”) and Petroleum Prospecting Licence 437 (“PPL 437”)
— Work programmes in PNG commenced with the acquisition and processing of seismic and evaluation of legacy datasets
2013 Financial Highlights(1)
— Total revenues, net to Heritage, for 2013 of $431.9 million
— Profit after tax from continuing operations of $100.4 million, an increase of 104% year-on-year
— Operating cash flows of $235.3 million in 2013 compared to cash outflows of $207.5 million in 2012
— Successfully completed the refinancing of the bridge loan facility with a five year $550 million Senior Secured Revolving Reserves Based Lending
Facility drawn by Shoreline Natural Resources Limited (“Shoreline”) in Nigeria
— Heritage cash at 31 December 2013 of $183.8 million
Outlook
Continued investment in OML 30 during 2014, including the installation of gas lift compressors, refurbishment of equipment, statutory inspection and testing of all pressure vessels and inspection of all wellheads and pipelines continue to support well optimisation, which will result in further increases in production
— Development drilling on OML 30 remains on track for commencing in the second half of 2014
— As a result of an enforced shut-in at OML 30 during the first quarter of this year, total production, net to Heritage, for 2014 is estimated in
the range of 14,500-18,000 bopd
— 2014 expected year end exit gross production rate from OML 30 between 65,000 and 70,000 bopd
— Exploration activity is set to increase with multi-well drilling campaigns planned for PNG and Tanzania
— Continue to look for further opportunities to create value
— Intention to become a long-term sustainable dividend payer commencing within the next 12 months
Tony Buckingham, Chief Executive Officer, commented:
“2013 has been an extraordinary year for Heritage and Shoreline with a step change in production and operating cash flow enabling us to expand our exploration portfolio through acquiring additional exciting exploration opportunities. Our progress during 2013 resulted from the continued development of OML 30 in Nigeria and the decision to enter Papua New Guinea, whilst continuing with our work programme in Tanzania. Our balanced portfolio includes significant producing fields and an enlarged exploration portfolio providing both geographic and operational diversification. Cash flow generation from OML 30 is now so robust that it is our intention to become a long-term sustainable dividend payer commencing within the next 12 months.”
(1) In order to be prudent, the Group has changed the accounting policy for the proportion of Shoreline it consolidates into its results and it now proportionally consolidates Shoreline’s financial results using 90% which is the eventual economic rights before completion of the partner’s option.
Heritage’s 2013 Annual Report and Accounts will be available on its website at .
Source: heritageoilplc

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