Heritage Updates Drilling Progress at Miran Well

Miran Block, Iraq
(Click to Enlarge)

Heritage announced the publication of its interim results for the six months ended June 30, 2010.

Operational Highlights

  • Miran West-2 well, Kurdistan Region of Iraq ("Kurdistan"), is drilling ahead close to the base of the Jurassic section where initial results from wireline logging, shows and sampling indicate the presence of hydrocarbon-bearing fractured reservoir intervals
  • It was previously announced on April 7, 2010 that the well had intersected significant hydrocarbon-bearing intervals over approximately 1,800 meters in the Cretaceous section
  • In addition to intervals already secured behind casing in the Cretaceous section of the well, which are designated for testing, further intervals have been identified for testing in the Jurassic after reaching total depth
  • The well is drilling ahead at 3,468 meters and testing of these numerous intervals will commence once total depth, estimated at 4,600 meters, has been reached in the Triassic
  • 336 kilometers of seismic was acquired during the first quarter of 2010 on the Zamzama North License, Pakistan
  • Net average daily production of 583 bopd in the first half of 2010

Financial Highlights

  • Completed the sale of the Ugandan assets in July 2010 for which Tullow Uganda Limited ("Tullow") paid $1.45 billion in cash (including the contractual settlement of $100 million), of which Heritage received and retained $1.045 billion
  • Remaining proceeds have been set aside due to an assessment by the Uganda Revenue Authority ("URA") of tax payable, which Heritage is disputing. Heritage deposited $121,447,500 with the URA and $283,447,500 has been retained in escrow
  • Special dividend of 100 pence per share declared on August 2, 2010 and paid on August 27, 2010 to shareholders on the register on August 13, 2010
  • Strong balance sheet with cash of approximately $700 million, excluding amounts related to the tax dispute, stated after the receipt of $1.045 billion and the payment of the special dividend


  • Full results from the Miran West-2 well expected late September/early October
  • Acquisition of 3D seismic planned to begin across the Miran Block in the fourth quarter of 2010
  • Well planning has commenced for an exploration well on the Zamzama North License, Pakistan. Recent floods in our license area have delayed the well into the first quarter of 2011
  • Production expected to increase in Russia with additional development drilling

Tony Buckingham, Chief Executive Officer, commented, "We are encouraged with progress of the Miran West-2 well and will provide an update when we have reached total depth. We have a very attractive prospective portfolio that has the potential to create significant shareholder value in the next year through several high impact exploration wells. In addition, the proceeds received from the disposal of the Ugandan assets leave the Company with a strong balance sheet capable of executing the current strategy and we are actively looking for new acquisitions and opportunities."


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