Heritage Starts Drilling Buffalo-1 Well in Uganda

Heritage has commenced drilling the Buffalo-1 exploration well in Block 1, Uganda.

Highlights

• Buffalo-1 is the second well to be drilled in Block 1, Uganda, and is part of a three well exploration program being drilled back to back.
• Recent discovery at Warthog-1 in Block 1 has lowered the exploration risk substantially and emphasizes the highly prospective nature of both Buffalo and Giraffe prospects.
• Kingfisher-3, Block 3A, has reached target measured depth of 3,200 meters and is being logged.

Drilling Activity - Block 1, Uganda

The Buffalo-1 exploration well is being drilled to an anticipated depth of approximately 600 meters and is expected to take between two and three weeks to drill and complete.

The Warthog-1 discovery well in Block 1, which encountered a net hydrocarbon column of 46 meters in a gross interval of 150 meters, has lowered the exploration risk of Buffalo, Giraffe and other prospects in Block 1 significantly.

Warthog-1 was the first well drilled in a three well exploration program in Block 1. It lies on a structural trend that can be traced from the Kasamene-1 discovery well, in neighboring Block 2, northeast through the Giraffe and Buffalo prospects in Block 1. All of these prospects are characterised by seismic amplitude anomalies that appear to indicate the presence of hydrocarbons.

Drilling Activity - Block 3A, Uganda

The Kingfisher-3 appraisal well, which was spudded on September 26, 2008, is currently operating at target depth of 3,200 meters measured depth (total vertical depth 2,619 meters). A series of wireline logs are being run. Subsequent to operations being completed on Kingfisher-3, it is planned to drill the Kingfisher-3A sidetrack to an anticipated measured depth of approximately 2,860 meters, which is expected to be completed by late January or early February 2009. The well and sidetrack are being drilled to evaluate the southern limits of the oil field and to gather additional reservoir data in preparation for field development.

Tony Buckingham, CEO, commented, "Buffalo-1 is the second well to be drilled in Block 1 as part of our multi-well drilling program in Uganda and has been derisked significantly with the Warthog-1 discovery announced last month. The current exploration program has the potential to achieve the commercial threshold required for development of reserves in Uganda allowing for early development of the Albert Basin. This continues to be an exciting time for Heritage with a geographically diverse drilling program which can act as a catalyst with a further two exploration wells planned to spud before year-end."

Heritage is the Operator of Block 3A and Block 1 in Uganda with a 50% equity interest in the licenses with Tullow Oil Plc holding the remaining 50% interest.