Operational and Financial Highlights

The 6 months to 30 June 2009 have been outstanding for the Group with successful exploration in Uganda and Kurdistan.

Operational Highlights

  • Discovered the Miran West Field in the Kurdistan Region of Iraq
  • Tests on the Miran West-1 well, Kurdistan, indicate potential for production from the well of 8,000-10,000 bopd
  • Miran West-2 well has intersected significant hydrocarbon-bearing intervals over approximately 1,800 metres
  • The Miran West-2 well is drilling to the deeper Jurassic and Triassic exploration targets which could add significantly to the hydrocarbon potential of the Miran structure
  • Three zones identified in the Cretaceous, in the Miran West-2 well, also to be tested when exploration drilling is completed
  • Completed the successful Block 1 drilling programme in Uganda with the discovery of the world-class Buffalo-Giraffe Field

Financial Highlights

  • Proposed sale of Ugandan interests for up to $1.5 billion. Expect transaction to complete within the first half of 2010
  • Intention to pay special dividend of 75p to 100p following completion of the sale of the Ugandan interests
  • Sale of non-core holdings in Oman realised cash of $28.4 million
  • Successful placing of 25.4 million new shares raised gross proceeds of $217 million
  • Back costs of $6.7 million were received on the exercise of third party back-in rights for 25% in the Miran Block, Kurdistan
  • Strong balance sheet; cash of $208 million at 31 December 2009, which is stated before the sale of the Ugandan interests and potential payment of a special dividend
  • Net average daily production of 583 bopd in Q1 2010

Outlook

  • Heritage's most diverse work programme ever planned in several core areas
  • High impact exploration well in Malta planned for the fourth quarter of 2010
  • Exploration and appraisal drilling on the Miran structure, Kurdistan, to continue in 2010
  • Exploration well planned in Pakistan for the fourth quarter of 2010
  • Production expected to increase in Russia with additional development drilling
  • Examine opportunities to generate further value for shareholders