Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.


Heritage Oil to fund deal by Kurdistan block sale

21 August 2012, 12:31

Heritage Oil Plc will sell part of a gas block and borrow money from Genel Energy Plc to raise $450 million, easing concerns about how it will fund oilfield purchases in Nigeria.

Heritage Oil shares jumped 15 percent after the company said it will sell a 26 percent stake in Miran Block in Iraq's autonomous Kurdistan region to Genel and will take a $294 million loan from the company.

The cash will partly fund Heritage Oil's acquisition of a stake in Nigeria's OML 30 oilfield assets announced last month.

"Miran sale price is attractive, but the cash is more welcome," BMO Capital Markets' Al Stanton said.

Heritage Oil earlier planned to fund a portion of the OML 30 deal through a rights issue.

"There is no need to proceed with the rights (issue) and any capital raising is dropped," Heritage Oil Chief Financial Officer Paul Atherton told Reuters on Tuesday.

The company will sell the Miran Block stake and an interest in a related joint operating agreement for $156 million, which would increase Genel's holding in the block to 51 percent.

Heritage Oil can repay the loan by transferring ownership of its unit Heritage Energy Middle East Ltd, which currently operates the Miran Block, to Genel.

"After we've completed the acquisition of OML 30 ... either party has the right to exercise this option, and we would expect to complete the same, by way of cancelling the loan in exchange for the remaining rights in Miran," Atherton said.

Heritage Oil, which also operates in Tanzania and Russia, will have no presence in Kurdistan after exiting Miran Block.

Conceptual engineering design studies have focused on the potential for early production of between 80 million and 180 million standard cubic feet per day (MMscfd) at Miran for local markets beginning in 2013 , according to Heritage Oil's website.

This will be followed by an appraisal and full development of between 560 and 750 MMscfd in 2015 for gas export.

Genel's primary assets are oil and gas licences in Kurdistan and has an interest in six production sharing contracts with the Kurdistan Regional Government.

"We aim to build a material gas business alongside our existing oil business in the medium term," Genel Energy Chief Executive Tony Hayward said.

Heritage Oil shares were up 13 percent at 190 pence on the London Stock Exchange at 1004 GMT on Tuesday. Genel's stock was down about 2 percent.

- Reuters

Tags oil

Read News24’s Comments Policy

Comment on this story
Comments have been closed for this article.

Read more from our Users

Nigeria @ 56: Words to my green f...

A leader’s job is not to dictate, but rather to be respected, admired and be a trustee, of the land we love, with so much potential, a land which should be freer than free. Its still a long way to fufilling our destiny! Read more...

Submitted by
Isaac Asabor263
Recession: An opportunity for Nig...

The recession should be seen as an opportunity for the country’s promotion as long as we all collectively conduct ourselves in a patriotic manner, writes Isaac Asabor.  Read more...

Submitted by
Black and White

We want to imitate the whites in everything because we are ignorant of our inherent originality and content. We spend all our Naira to acquire his inventions because we so oblivious of our natural endowments that we allow him have it for free. Read more...

Submitted by
Nate Nat
Adamawa State University Mubi: A ...

ADSU integrity forum has accused the Sunday Joshua Wugira, a lawyer, of adopting unorthodox tactics by abusing his privilege by attacking the integrity of ADSU Vice Chancellor Dr. Moses Zira Zaruwa, writes a News24 reader. Read more...

Submitted by
Abdulsalam Jubril
My Country Nigeria (Part One)

Poetry by Abdulsalam Jubril.

Submitted by
Abdulsalam Jubril
Recession, dearth in leadership a...

Every leader has the opportunity to become great and making himself immortal in the lives and hearts of people for generations to come. Will Mr. President seize this opportunity?, questions Abdulsalam Jubril. Read more...