Heritage Oil Plc, an independent upstream exploration and production company with headquarters in London, says production to date from Oil Mining Lease (OML) 30 in Nigeria averaged about 15,600 barrels of oil per day (bopd) net to the company, 17 percent higher than that of fourth quarter of 2013.
The company says it expects further increases in production as installation of new or refurbished infrastructure and equipment supports well optimisation, adding that the commencement of development drilling for the second half of the year remains on track.
In an operational update on OML 30 posted on the company’s website on Wednesday, the company says there had been three liftings to date in 2014 and it is expected that these would take place on a monthly basis going forward.
Installation of gas compressors, refurbishment of equipment, statutory inspection and testing of all pressure vessels, and inspection of all wellheads and pipelines continue to support well optimisation, according to the statement.
Tony Buckingham, chief executive officer, Heritage, said: “OML 30 operations are progressing in line with expectations, providing significant revenues and cash flow to Heritage which should enable the Company to achieve its goal of paying a sustainable dividend stream to shareholders. Our interest in OML 30 will be used as a platform to grow and obtain additional interests in Nigeria and in other core areas.”
In November 2013, Heritage announced that Shoreline Natural Resources Limited had been in discussions with relevant government departments in Nigeria about its tax status. Post period-end these discussions have concluded successfully. Shoreline and Heritage are currently quantifying the impact and expect the benefit of this to be recognised in the 2013 year-end results.
As previously announced, Shoreline Power Company Limited exercised its call option to acquire a 30 percent economic interest in Shoreline. Completion of the transaction is expected imminently, following which Heritage will have an effective working interest in OML 30 of 30.71 percent. On completion, Heritage will receive cash of $31.5 million and the balance will be provided by way of an interest bearing, secured loan from Heritage to Shoreline Power, according to the statement.
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.
By: FEMI ASU
