Heritage Oil Plc (LSE: HOIL), an independent upstream exploration and production company, provides an operational update on OML 30, Nigeria, that includes unaudited information and may be subject to further review.
Production year to date, from OML 30, has averaged approximately 15,600 bopd net to Heritage, 17% higher than in Q4 2013. There have been three liftings to date in 2014 and it is expected that these will take place on a monthly basis going forward. Installation of gas compressors, refurbishment of equipment, statutory inspection and testing of all pressure vessels, and inspection of all wellheads and pipelines continue to support well optimisation. This should result in further increases in production. Commencement of development drilling remains on track for the second half of the year.
In November 2013, Heritage announced that Shoreline Natural Resources Limited (“Shoreline”) had been in discussions with relevant government departments in Nigeria about its tax status. Post period-end these discussions have concluded successfully. Shoreline and Heritage are currently quantifying the impact and expect the benefit of this to be recognised in the 2013 year-end results.
As previously announced, Shoreline Power Company Limited (“Shoreline Power”) exercised its call option to acquire a 30% economic interest in Shoreline. Completion of the transaction is expected imminently, following which Heritage will have an effective working interest in OML 30 of 30.71%. On completion, Heritage will receive cash of $31.5 million and the balance will be provided by way of an interest bearing, secured loan from Heritage to Shoreline Power.
Tony Buckingham, Chief Executive Officer, commented:
“OML 30 operations are progressing in line with expectations, providing significant revenues and cash flow to Heritage which should enable the Company to achieve its goal of paying a sustainable dividend stream to shareholders. Our interest in OML 30 will be used as a platform to grow and obtain additional interests in Nigeria and in other core areas.”
Source: Heritage Website