Operational and Financial Highlights

2011 Operational Highlights

  • Awarded new licences in Tanzania which Heritage believes could be geologically analogous to the Lake Albert Basin, providing the Company with a key advantage in assessing the blocks
  • Entered Libya through an acquisition which makes Heritage well placed to be able to play a significant role in the future development of the oil and gas industry in Libya
  • Appraisal drilling, in Kurdistan, commenced on the Miran West-3 well and results to date have confirmed oil in the Upper Cretaceous and gas in the Lower Cretaceous and Jurassic reservoirs
  • An interval, above the main Jurassic reservoir, in the Miran West-3 well has recently been tested and resulted in a flow of up to 17.5 MMscfd of dry gas
  • Acquired seismic on the southern portion of the Miran Block which has identified the presence of a structure capable of containing additional resources
  • Completed seismic in Mali, Malta and Tanzania
  • Drilled first horizontal well in Russia which exceeded pre-drill expectations resulting in a year-on-year increase in production of 24%

2011 Financial Highlights

  • Cash of $311 million, excluding amounts relating to the Ugandan tax dispute
  • Production averaged 673 bopd, an increase of 24% from 2010 levels
  • Average realised price of $36.9/bbl, an increase of 45% from 2010 levels
  • Total cash capital expenditures increased to $135 million

Outlook

  • Miran East-1 well commenced drilling in March 2012 with results expected at the end of the third quarter 2012
  • Further test results expected from the Miran West-3 well
  • Undertaking work to identify a suitable drilling location in the southern portion of the Miran Block
  • Work programmes are commencing in Tanzania on newly awarded acreage
  • Planning for a high-impact exploration well offshore Malta
  • Actively looking for further opportunities