2012 Operational Highlights
Acquired an interest in OML 30, Nigeria, through Shoreline Natural Resources Limited ("Shoreline"), whose ownership interests are held by Heritage Oil SNR (Nigeria B.V.), a wholly owned subsidiary of Heritage and a local Nigerian partner, Shoreline Power Company ("Shoreline Power")
Acquisition provided a material change in proved and probable reserves for Heritage, which RPS Energy Consultants Ltd ("RPS") independently estimate at 412 MMbbls, for interests in Nigeria and Russia, as at 31 March 2012
Disposed of interests in the Miran asset, in the Kurdistan Region of Iraq ("Kurdistan"), for $450 million
Extended acreage in Tanzania, adding to acreage Heritage believes could be geologically analogous to the Lake Albert Basin, providing the Company with a key advantage in assessing the blocks
Commenced the work programme in Tanzania through the acquisition of 2D seismic on Rukwa and the acquisition of a very high resolution gravity survey on Kyela
Farmed in to two licences in Papua New Guinea ("PNG"); Petroleum Prospecting Licence 319 ("PPL 319") and Petroleum Retention Licence 13 ("PRL 13"), which are believed to be in an attractive geological fairway
2012 Financial Highlights
Since the acquisition of an interest in OML 30, revenues net to Heritage of $234.5 million have been generated
Shoreline made a cash payment of $52.5 million, in April 2013, to reduce the bridge loan to $497.5 million
Heritage had cash at 31 December 2012 of c.$90 million, excluding amounts relating to the tax dispute of c.$405 million and amounts used as part security in respect of OML 30 of $101 million
Average gross production from OML 30 has been 20,350 bopd since the acquisition
Production from the interest in OML 30, Nigeria, net to Heritage of 12,350 bopd for November and December 2012 and net production from Russia of 607 bopd for the year
Outlook
Further increases in production from OML 30, Nigeria, with key items of equipment having been identified and ordered
Exploration activity to continue in Tanzania following initial promising results and first drilling slated for 2014
Extension of 2D seismic programme in PNG with the intention of progressing the Tuyuwopi structure to a drillable prospect in 2014
Continue to look for further opportunities to create value
Tony Buckingham, Chief Executive Officer, commented:
"2012 has been a momentous year in the evolution of Heritage. We have enhanced our portfolio through corporate activity, securing a step change in production, reserves and cash flow and selling our gas interests in Kurdistan at an attractive valuation. Our transformation includes entry into new regions of Nigeria and Papua New Guinea and extending our acreage in Tanzania. The Company now has significant producing assets and an enlarged exploration portfolio, providing more balance with both geographic and operational diversification."
