Heritage Oil's Turaco-3 Well Drilling Ahead

Heritage Oil reports that its Turaco-3 well in western Uganda is drilling ahead at a depth of approximately 2,200 meters. The well was spudded on September 24, and it is anticipated to reach target total depth of 2,850 meters and be production tested before the year-end.

The logs of the Turaco-2 well (located approximately 100 meters away from Turaco-3), drilled earlier this year, identified potential hydrocarbons over two intervals constituting gross pay of over 300 meters, but was not tested due to mechanical difficulties.

Micael Gulbenkian, Chairman and CEO, said "I am pleased to report that the drilling of Turaco-3 is ahead of schedule and we have not experienced any significant operational problems. We remain confident that we can complete drilling and production test the well before year-end."

As previously reported, Heritage and its 50% partner, Energy Africa, have intensified this year's exploration and appraisal work program, which includes the acquisition of a 3D seismic survey. The 3D seismic crew was mobilized in June 2004 and the field data acquisition should be completed in November. The seismic data to date have yielded encouraging results, which together with the excellent quality of the data, have resulted in the area covered by the survey being expanded from 350 sq km to approximately 400 sq km. Processing and interpretation of the data should be completed by early next year, and will be used to plan the 2005 work program.

The Turaco-3 well is being drilled with a conventional, third-party drilling rig, with a higher capacity than the company's own Eagle Drill rig, which was used for the previous two wells drilled on the Turaco prospect. The Eagle Drill rig is currently undergoing a major refit at the drill site, in anticipation of further drilling in 2005.