MediaToday
News | Wednesday, 10 June 2009

Oil company with operations in Malta announces takeover

Charlot Zahra

Heritage Oil Ltd. a global oil exploration company with operations in Malta, announced yesterday that it had reached a tentative agreement with Turkey’s Genel Enerji A.S. in a reverse takeover deal valued at more than US$ 3 billion.
The company said in its announcement that the all-stock transaction would lead to the formation of an expanded Anglo-Turkish company operating under the Heritage name and with significant oil and gas interests in northern Iraq’s oil-rich Kurdistan region.
Under the terms of the agreement, Heritage would double its current share capital by issuing 260 million new shares, receiving all of Genel’s shares in return.
Heritage said the proposed acquisition would create a company with two core areas – Kurdistan and Uganda.
Genel was a private, independent oil explorer and producer in Turkey, with interests in producing oil-fields in Iraq and other properties.
Last week, Heritage requested a suspension of its shares on the London Stock Exchange after confirming it was in reverse-takeover talks with an unnamed third party. The suspension will be lifted on Tuesday.
Heritage explained how the expanded company would have proved and probable reserves of about 300 million barrels and potential for millions more.
The takeover, which was subject to shareholder and regulatory approval, was slated to close during the third quarter of 2009.
“The potential combination of our two companies brings together a long held ambition to develop the assets in our core areas,” Heritage Chief Executive Officer CEO) Tony Buckingham said in a statement.
On his part, Genel CEO Mehmet Sepil commented: “We are excited about the possibility of combining with Heritage to create a significant main board listed company with a strong financial capability and access to international capital markets, international expertise and with the aim of expanding the activities of the enlarged group in other countries in the Middle East.”
Heritage had a producing property in Russia and other exploration projects in the Kurdistan region of Iraq, the Democratic Republic of Congo, Pakistan, Tanzania and Mali.
In May, Heritage said it had made a major oil discovery in Kurdistan, with an oil-in-place estimate of between 2.3 billion to 4.2 billion barrels and a recovery factor expected between 50 and 70 per cent.
Earlier in the year, Heritage sold its Eagle Energy (Oman) wholly owned subsidiary to RAK Petroleum Oman Ltd. for US$ 28 million.

Heritage’s interests in Malta
In Malta, Heritage Oil International Malta Limited, a wholly owned subsidiary of Heritage Oil, signed a Production Sharing Contract with the Government of Malta for a 100 per cent interest in the offshore Areas 2 and 7 in December 2007. Heritage was appointed as operator.
The licences extended to almost 18,000 square kilometres and were situated approximately 80 kilometres in Area 2 and 140 kilometres in Area 7 from the South-Eastern Maltese coast in waters ranging in depth from 200 to 400 metres.
Initial seismic interpretation, based on the current extensive data set of almost 3,500 kilometres acquired since 2000, had identified a variety of potential prospects. The company said planned future seismic acquisition might well identify more.
The licences were under-explored, having had only one well drilled in Area 2 (Medina Bank 1) in 1980.
Heritage agreed to a total minimum contractual work programme comprising the acquisition of a further 1,000 kilometres of seismic data and the drilling of one exploration well.

czahra@mediatoday.com.mt

 

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10 June 2009
ISSUE NO. 586

Malta Today

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