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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Repeatseat Ltd. (Tier2) | TSXV:RPS | TSX Venture | Common Stock |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0 | - |
Hot Features
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THIS PRESS RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR
FOR DISSEMINATION IN THE UNITED STATES.
Heritage Oil Plc (LSE:HOIL), an independent upstream exploration and production
company, announces today that it has issued a circular (the "Circular") and
Notice of General Meeting to be held on 25 January 2010 relating to the proposed
disposal of its entire interest in Block 1 and Block 3A in Uganda (the "Disposed
Assets"). The Circular includes an independent Mineral Expert's Report covering
the Kurdistan Region of Iraq ("Kurdistan") and Russia, which following the
proposed transaction will continue to be held by the continuing group (the
"Continuing Group") as well as Block 1 and Block 3A in Uganda.
On 18 December 2009, Heritage announced that it had entered into a sale and
purchase agreement (the "SPA") to sell the Disposed Assets for up to $1.5
billion (the "Proposed Transaction"). The Circular and a Form of Proxy in
respect of the general meeting, to be held at 3:00pm (GMT) on 25 January 2010 at
22 Grenville Street, St Helier, JE4 8PX, Jersey, Channel Islands (the "General
Meeting"), have been posted to Heritage shareholders on 21 December 2009.
The purpose of the General Meeting is to seek the approval of shareholders for
the Proposed Transaction as set out in the SPA dated 18 December 2009.
Copies of the Circular are available from Heritage's website at
www.heritageoilplc.com. In addition, it has been submitted to the UKLA and will
shortly be available for inspection at the Document Viewing facility at the
Financial Services Authority, 25 The North Colonnade, Canary Wharf, London, E14
5HS.
Highlights
- General meeting to be held on 25 January 2010
- Mineral Expert's Report detailed in the Circular discloses:
-- Disposed Assets have a mean working interest share of risked
resources of 543 million barrels of oil equivalent ("mmboe")
-- Contingent resources for the Disposed Assets, discounted at 10 per
cent., have a mean expected value of $1.1 billion at $65/bbl oil
price
-- Risked prospective resources for the Disposed Assets have a mean
expected value, discounted at 10 per cent., of $485 million
-- Heritage's mean working interest share of risked resources for the
Miran Block, Kurdistan of 1,014 mmboe has a mean expected value,
discounted at 10 per cent., of $4.4 billion
-- Heritage's net working interest share of proved plus probable
reserves in Russia of 60.6 millions of barrels ("mmbbls"), has a net
present value, discounted at 10 per cent., of $298 million
- The consideration to be received for the Disposed Assets, of up to $1.5
billion, is 33% higher than the independently estimated value of the
Disposed Assets' contingent resources, discounted at 10 per cent., of
$1,126 million and compares favourably to RPS' estimated value of
contingent plus prospective resources of $1,611 million
- Analyst conference call to be held on 6 January 2010
Mineral Expert's Report
RPS Energy ("RPS"), an independent consultancy specialising in petroleum
reservoir evaluation and economic analysis, was engaged to prepare a Mineral
Expert's Report for Heritage. The range of reserves and resources is as at 30
June 2009 and is based on the data and information available up until that date.
Disposed Assets
Heritage previously announced that it has entered into an SPA to sell its
Ugandan interest for a cash consideration of $1.35 billion and a further
contingent, deferred consideration of up to $150 million in cash or an interest
in a mutually agreed producing oil field independently valued at a similar
amount. This consideration of up to $1.5 billion is 33% higher than RPS'
estimated value of the Disposed Assets' contingent resources, discounted at 10
per cent., of $1,126 million and compares favourably to RPS' estimated value of
contingent and prospective resources of $1,611 million.
Risked Recoverable Resources Relating to the Disposed Assets (mmboe)
A summary of RPS' estimated net working interest contingent and prospective
resources for the Disposed Assets as of 30 June 2009 is set out below:
Working Interest Share(1)(5)
--------------------------------------
Low Best High
(P90) (P50) (P10) Mean
mmboe mmboe mmboe mmboe
Block 1
Contingent Resources(2) 88 222 444 250
Prospective Resources(3) 0 41 239 90
--------------------------------------
Consolidated Sub-total(4) 114 282 551 339
--------------------------------------
Block 3A
Contingent Resources(2) 48 95 170 105
Prospective Resources(3) 0 39 229 99
--------------------------------------
Consolidated Sub-total(4) 63 170 387 204
--------------------------------------
Consolidated Total(4) 265 497 895 543
--------------------------------------
--------------------------------------
(1) In the event of discovery and development, net entitlement resources
will be a function of the contract terms and will be less than net
working interest resources. The Government of Uganda has the right to
back-in for up to 15 per cent. which could, if exercised, reduce the
working interest in each of Blocks 1 and 3A to 42.5 per cent.
(2) Stochastic consolidation of contingent resources with Geological
Probability of Success ("GPoS") of 100 per cent.
(3) Stochastic consolidation of prospective resources with GPoS for each
prospect.
(4) Stochastic consolidation of contingent resources and risked prospective
resources.
(5) Block 1 resources are quoted net of 15 per cent. losses for steam
generation where applicable.
A summary of RPS' estimated expected value of the Disposed Assets post-tax,
discounted at 10 per cent., as of 30 June 2009, is set out below:
Net Present Value
($ million in money of the day)
-----------------------------------------------------
Block 1 Block 3A Blocks 1 and 3A
Expected Value Expected Value Total Expected
(Mean) (Mean) Value (Mean)
Contingent Resources 662 464 1,126
Prospective Resources 258 227 485
-----------------------------------------------------
Total 920 691 1,611
-----------------------------------------------------
-----------------------------------------------------
Notes:
The expected value of the Total Production Sharing Contract is the
probability weighted mean of the value of all possible outcomes of the
contingent resources plus the drilling of the prospective resources. This
is also known as the Expected Mean Value ("EMV").
The expected value of the contingent resources represents the probability
weighted mean value of the resource volume range. This is sometimes known
as the Expected Net Present Value ("ENPV").
Resources of Continuing Group - Miran, Kurdistan (mmboe)
A summary of RPS' estimated net working interest contingent and prospective
resources as of 30 June 2009 is set out below:
Continuing Group Working Interest Share(1)
---------------------------------------------
Low Best High
(P90) (P50) (P10) Mean
mmboe mmboe mmboe mmboe
Miran Block, Kurdistan
Contingent Resources(2) 25 53 92 53
Prospective Resources(3) 87 849 2,248 850
---------------------------------------------
Consolidated Total(4) 128 902 2,306 1,014
---------------------------------------------
---------------------------------------------
(1) In the event of discovery and development, the Continuing Group's
net entitlement resources will be a function of the contract terms and
will be less than the net working interest resources. The Kurdistan
Regional Government has the right to back-in for up to 25 per cent.
which could, if fully exercised, reduce the Continuing Group's working
interest to 56.25 per cent.
(2) Stochastic consolidation of contingent resources with GPoS of 100 per
cent.
(3) Stochastic consolidation of prospective resources with appropriate GPoS
for each prospect.
(4) Stochastic consolidation of contingent resources and risked prospective
resources.
A summary of RPS' estimated expected value of the Continuing Group's assets in
Kurdistan, discounted at 10 per cent., as of 30 June 2009, is set out below:
Net Present Value
($ million in money of the day)
-----------------------------------------------------
Miran West Miran East Miran Total
Expected Value Expected Value Expected Value
(Mean) (Mean) (Mean)
Contingent Resources 275 0 275
Prospective Resources 3,645 479 4,125
-----------------------------------------------------
Total 3,920 479 4,400
-----------------------------------------------------
-----------------------------------------------------
Notes:
The total expected value is the probability weighted mean of the value of
all possible outcomes of the contingent resources plus the drilling of the
prospective resources. This is also known as the EMV.
The expected value of the contingent resources represents the probability
weighted mean value of the resource volume range. This is sometimes known
as the ENPV.
Reserves of Continuing Group - Zapadno Chumpasskoye, Russia
A summary of RPS' estimated net working interest reserves and their net present
value of the Continuing Group's assets in Russia, based on forecast prices and
costs, discounted at 10 per cent., as of 30 June 2009, is as follows:
Net Working and Net Present
Entitlement Reserves Value
-------------------------------------------
($millions in
mmbbls money of the day)
Proved 23.4 60
Probable Additional 37.2 238
-------------------------------------------
Total Proved + Probable 60.6 298
-------------------------------------------
-------------------------------------------
Total Proved + Probable +
Possible 164.0 935
-------------------------------------------
-------------------------------------------
Continuing Group
The net proceeds from the Disposed Assets will serve to reinforce the Company's
balance sheet after a successful period of value creation and realisation, and
will provide increased financial flexibility to:
- Continue exploration, appraisal and development activities in the
remaining seven countries in which the Continuing Group has licences, in
particular in Kurdistan which remains a core area of focus and where the
Company has recently commenced a multi-well exploration and appraisal
drilling programme on the Miran Block
- Embark on drilling programmes in the Continuing Group's remaining
licences in 2010 with a number of high-impact exploration wells which
could generate significant additional value for shareholders
- Participate in opportunities to generate further value, including the
acquisition of oil and gas licences in highly prospective geographies
and/or the acquisition of producing assets when opportunities arise
- Potentially return a portion of the disposal proceeds to shareholders
through a special dividend following completion, which could be in the
range of 75 pence to 100 pence per share
- Commence the acquisition of seismic data and/or drilling activity on its
licences in Malta, Mali and Pakistan in 2010
- Provide funds for the Company's continuing working capital requirements
and for general corporate purposes
Tony Buckingham, Chief Executive Officer, commented:
"Heritage's strategy of first mover advantage to create exceptional value for
shareholders is demonstrated by the RPS report. We believe that the value
Heritage has achieved for the sale of its Ugandan interest is excellent,
creating significant value, and takes into account future drilling success. We
continue to have an excellent portfolio of existing assets, including Kurdistan
where the Miran West-2 appraisal well is being drilled, in addition to numerous
other highly attractive exploration licences. The consideration proceeds will be
used in part to continue to explore and develop this portfolio whilst also
allowing Heritage to diversify and acquire other interests."
Analyst Conference Call
Mr. Paul Atherton, Chief Financial Officer, will be hosting an analyst
conference call at 2:00pm (GMT) on 6 January 2010. The presentation that
accompanies the call will be available on the website (www.heritageoilplc.com)
shortly before this time. To access the call please dial the appropriate number
below shortly before the call and ask for the Heritage Oil Plc conference call.
A replay facility will be available for up to seven days. The telephone numbers
and access codes are:
Live Event
Dial-in number: +44 (0) 20 7138 0843 (UK)
+1 212 444 0895 (US)
+1 514 315 1009 (Canada)
Passcode: 9214371
Replay facility available for seven days:
Dial-in number: +44 (0) 20 7111 1244 (UK)
+1 347 366 9565 (North America)
Passcode: 9214371#
Notes to Editors
- Heritage is listed on the Main Market of the London Stock Exchange and
is a constituent of the FTSE 250 Index. The trading symbol is HOIL.
Heritage has a further listing on the Toronto Stock Exchange (TSX:HOC).
- Heritage is an independent upstream exploration and production company
engaged in the exploration for, and the development, production and
acquisition of, oil and gas in its core areas of Africa, the Middle East
and Russia.
- Heritage has a producing property in Russia and exploration projects in
Uganda, the Kurdistan Region of Iraq, the Democratic Republic of Congo,
Malta, Pakistan, Tanzania and Mali.
- All dollars are US$ unless otherwise stated.
- For further information please refer to our website,
www.heritageoilplc.com
If you would prefer to receive press releases via email please contact Jeanny So
(jeanny@chfir.com) and specify "Heritage press releases" in the subject line.
FORWARD-LOOKING INFORMATION:
Except for statements of historical fact, all statements in this news release -
including, without limitation, statements regarding production estimates and
future plans and objectives of Heritage - constitute forward-looking information
that involve various risks and uncertainties. There can be no assurance that
such statements will prove to be accurate; actual results and future events
could differ materially from those anticipated in such statements. Factors that
could cause actual results to differ materially from anticipated results include
risks and uncertainties such as: risks relating to estimates of reserves and
recoveries; production and operating cost assumptions; development risks and
costs; the risk of commodity price fluctuations; political and regulatory risks;
and other risks and uncertainties as disclosed under the heading "Risk Factors"
in its Prospectus and elsewhere in Heritage documents filed from time-to-time
with the London Stock Exchange and other regulatory authorities. The completion
of the SPA is subject to certain conditions, some of which are beyond the
control of the Company. Further, any forward-looking information is made only as
of a certain date and the Company undertakes no obligation to update any
forward-looking information or statements to reflect events or circumstances
after the date on which such statement is made or reflect the occurrence of
unanticipated events, except as may be required by applicable securities laws.
New factors emerge from time to time, and it is not possible for management of
the Company to predict all of these factors and to assess in advance the impact
of each such factor on the Company's business or the extent to which any factor,
or combination of factors, may cause actual results to differ materially from
those contained in any forward-looking information.
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