Heritage Oil announced Tuesday that it is selling a 26-percent interest in its Miran production sharing contract in the Kurdistan region of Iraq to Turkey's Genel Energy for $156 million.
The deal will see Genel take its holding in the Miran license to 51 percent, while Heritage's interest will fall to 49 percent.
The Miran block covers approximately 390 square miles, and its eastern and western structures are currently the subject of exploration and development activities. Notable successes for Heritage there have included the recent drilling of the Miran West-4 well, which achieved a flow rate of 1,350 barrels of oil per day in one test. The firm has also drilled the Miran West-3 well, which after successful testing is currently suspended pending the completion of a production well.
Heritage's Miran East-1 exploration well began drilling in March and is expected to be complete in November 2012.
As well as the $156 million cash payment to Heritage, Genel will also provide it with a $294 million loan on completion of the sale.
In a company statement, Heritage CEO Tony Buckingham pointed out that the proceeds will provide the firm with "significant financial flexibility" and that it would help fund the proposed $850 million acquisition of the onshore Nigerian asset – OML 30 – that Heritage announced on July 2.
In a statement from Genel, former BP boss and current Genel CEO Tony Hayward commented:
"This acquisition represents an excellent opportunity to extend our interest in, and assume joint operatorship of, a commercial gas discovery and high quality asset in the Kurdistan Region of Iraq. Following our recent acquisition of a 44-percent interest in Bina Bawi, it will further enhance our position as the leading oil and gas company in Kurdistan."
Hayward added that Genel is "uniquely placed" to execute the full field development of the Miran field, including gas exports to Turkey.
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