Heritage Oil rakes in $48m from OML 30, Nigeria in Q1 2014

United Kingdom-based Heritage Oil plc, an independent upstream exploration and production company, said total revenues in the first quarter of 2014 was $50.4 million, of which $48.1 million was from Oil Mining License (OML) 30 in Nigeria.

In its interim management statement for the period from January 1, 2014, to May 15, 2014, published on Friday on its website, Heritage said production for the first three months of 2014 from OML 30 averaged about 9,216 barrels of oil per day (bopd) net to Heritage, 33 percent higher than the same period in 2013.

The company said revenue from OML 30 was impacted negatively by an enforced shut-in at a third party terminal, where the crude is exported and there being an under lift at quarter end resulting in an inventory build-up, the company said, adding that maintenance work over OML 30 was progressing as planned.

Production in the first quarter was impacted by a leak on the undersea tanker loading pipeline at the third party owned Forcados crude oil terminal. This stopped export shipments for about one month, thereby forcing OML 30 to shut-in for a similar time once storage had reached capacity, the statement said.

Paul Atherton, CEO, Heritage Oil, said: “Operations at OML 30 were impacted during the first quarter, but re-commenced in early April 2014 so that we have been able to build on our progress in 2013. Nigeria remains the focus for 2014, with increasing production from OML 30, whilst concurrently progressing exploration programmes in PNG and Tanzania.”

As a result of the shut-in at OML 30, output for the quarter was 18 percent lower than Q4 2013. During the first quarter gross production of over 50,000bopd had been achieved, said Heritage.

The company stated that installation of gas compressors, refurbishment of equipment, statutory inspection and testing of all pressure vessels, and inspection of all wellheads and pipelines continued to support well optimisation. “New compressors for Afiesere and Kokori will be commissioned once production has stabilised. The installation of two new compressor engines in Olomoro is making a positive impact on uptime, which should result in further increases in production. Commencement of development drilling remains on track for the second half of the year.”

The average realised commodity price achieved in Nigeria was $110.51 per barrel in the first quarter of 2014. Over the quarter, there were three liftings in Nigeria which generated revenues net to Heritage of $48.1 million, compared to $216.4 million in the same period last year.

Revenues in Q1 2013 were boosted by the sale of inventories that had built up as there were no sales in 2012 since the license was acquired in November 2012, said Heritage.

Heritage’s footprint in Nigeria was established in November 2012 on the completion of the acquisition of a major interest in OML 30 through its interest in Shoreline Natural Resources Limited. Shoreline acquired a 45 percent interest in OML 30 for cash consideration of $850 million, with the National Petroleum Development Company holding the remaining 55 percent interest.

 

FEMI ASU