RNS 12 Nov 2012 07:03
12 November 2012
Heritage Oil Plc ("Heritage" or the "Company")
HERITAGE ANNOUNCES PROPOSED DIVESTMENT OF ITS 49% INTEREST IN THE MIRAN BLOCK, IN THE KURDISTAN REGION OF IRAQ, AS FULL REPAYMENT OF EXCHANGEABLE LOAN
Further to the announcements made by the Company on 21 August 2012 and 23 August 2012, Heritage Oil Plc (LSE: HOIL), an independent upstream exploration and production company, and its wholly owned subsidiary, Heritage Energy Middle East Limited ("HEME"), announce the proposed divestment of HEME's remaining 49% interest in the production sharing contract relating to the Miran Block (the "Miran PSC") in the Kurdistan Region of Iraq ("Kurdistan") and corresponding interest in the related joint operating agreement (the "Miran JOA") to Genel Energy (Miran) Limited, a wholly owned subsidiary of Genel Energy plc ("Genel") under the terms of a US$294 million exchangeable loan (the "Loan") provided to Heritage by Genel in August 2012, including the sum of cash calls paid by Genel to the operator of the Miran Block on HEME's behalf in respect of its 49% interest (the "Cash Calls"), since 1 July 2012 (the "Divestment"). Completion of the Divestment is subject to approval of the Company's shareholders.
Highlights
· Notice served by Heritage to Genel on 9 November 2012, stating that the Loan repayment is to be satisfied by the proposed Divestment of HEME's 49% interest in the Miran PSC and the Miran JOA (the "Divestment Assets"), reducing Heritage's interest in the Miran Block to nil
· Board of Directors believe that the proposed Divestment is the most advantageous option to repay the Loan due to the attractive valuation secured for a development asset with a very significant future capital expenditure requirement
· The proposed Divestment constitutes a class 1 transaction under the Financial Services Authority's ("FSA") Listing Rules, thereby requiring approval from the Company's shareholders by ordinary resolution prior to completion
· Combined proceeds of US$450 million received from Genel on 22 August 2012, further details of which are contained in the announcements made by the Company on 21 August 2012 and 23 August 2012, were used to partially finance the acquisition of a 45% participating interest in a producing oil mining licence in Nigeria ("OML 30") together with a 45% interest in other assets under the joint operating agreement for OML 30, without need for additional capital raising and without delay to the acquisition process
· Successful completion of the acquisition of OML 30 was announced by the Company on 9 November 2012
· A circular containing information on repayment of the Loan and details on the proposed Divestment, together with a notice to convene an extraordinary general meeting ("EGM"), will be sent to the Company's s
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