Heritage Oil announces corporate reorganization



    /THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION,
    DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, SOUTH AFRICA,
    AUSTRALIA, JAPAN OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.
    THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES IN THE UNITED STATES,
    SOUTH AFRICA, AUSTRALIA, JAPAN OR ANY JURISDICTION IN WHICH THE SAME
    WOULD BE UNLAWFUL./

    CALGARY, Feb. 22 /CNW/ - Heritage Oil Corporation (TSX: HOC) is pleased
to announce that it is seeking to implement a corporate reorganization which
will result in a newly incorporated, Jersey, Channel Islands company, Heritage
Oil Limited ("Heritage Jersey"), becoming the parent company of Heritage and
its current subsidiaries. Upon completion of the reorganization, Heritage
Jersey's corporate head office will be located in the Channel Islands and
Heritage Jersey will be subject to The Companies (Jersey) Law 1991 (as
amended). In connection with the reorganization, Heritage Jersey will be
seeking to list its ordinary shares ("Heritage Jersey Shares") on the Official
List of the United Kingdom Listing Authority (the "UKLA") and to trading on
the Main Market of the London Stock Exchange plc (the "LSE") (collectively,
"Admission"). Heritage intends to delist its existing Common Shares ("Heritage
Shares") from the Toronto Stock Exchange (the "TSX") and obtain a listing for
a new class of exchangeable shares (the "Exchangeable Shares") on the TSX.
JPMorgan Cazenove Limited has been appointed to advise Heritage on the
reorganization and to act as Heritage Jersey's sponsor in connection with
Admission.
    As part of the reorganization, to be implemented by way of court-approved
plan of arrangement (the "Arrangement") under the Business Corporations Act
(Alberta), Heritage will be seeking to effectively split its stock such that
each existing Heritage Share will be exchanged for either ten Heritage Jersey
Shares or ten Exchangeable Shares in accordance with the terms of the
Arrangement.
    The Board of Directors of Heritage believes that the reorganization of
Heritage in a tax efficient manner in accordance with the terms of the
Arrangement and Admission will be in the best interests of Heritage and
Heritage shareholders for a number of reasons.
    The Board of Directors believes that Admission will raise Heritage's
profile and status amongst European investors and within the international oil
and gas sector generally, and will give Heritage access to an international
market with a broad, relevant peer group and considerable research expertise.
Furthermore, the Board of Directors believes that in due course Admission, as
well as effectively increasing the number of Heritage Jersey Shares and
Exchangeable Shares by a factor of ten over the Heritage Shares, should assist
in increasing the trading volumes and liquidity of the Heritage Jersey Shares.
    In addition, given the geographic spread of Heritage's production,
development and exploration licences with a core focus on Africa, the Middle
East, and Russia, the Board of Directors believes that it would now be more
appropriate for Heritage to be based in Europe, where a substantial number of
the Heritage shareholders and most of the management of Heritage reside.
    A special meeting of Heritage shareholders and Heritage optionholders has
been scheduled for March 20, 2008. In order to proceed, the Arrangement must
be approved by not less than 66 2/3% of the votes cast by Heritage
shareholders, and by not less than 66 2/3% of the votes cast by Heritage
shareholders and Heritage optionholders voting together at the special
meeting. The completion of the Arrangement is also subject to various
regulatory or similar approvals, including from the TSX, the UKLA, the LSE,
the Jersey Financial Services Commission and the Court of Queen's Bench of
Alberta. It is expected that the Arrangement will be completed by the end of
March 2008.
    Under the terms of the Arrangement, Canadian residents will be able to
elect to exchange each of their Heritage Shares for either ten Exchangeable
Shares or ten Heritage Jersey Shares. Different tax consequences attach to the
different elections, and each shareholder is advised to consult their own tax
advisors. Each Exchangeable Share will be exchangeable for one Heritage Jersey
Share at any time, in accordance with the mechanism set out below. Heritage
shareholders who are not residents of Canada will only be able to exchange
each of their Heritage Shares for ten Heritage Jersey Shares. The Exchangeable
Shares will be securities of Heritage that are, as nearly as practicable, the
economic equivalent of Heritage Jersey Shares, and will have, subject to
certain limitations, the following rights: (i) the right to exchange their
Exchangeable Shares for Heritage Jersey Shares at any time on a one-for-one
basis; (ii) the right to receive dividends, on a per share basis, in amounts,
or property in the case of non-cash dividends, which are the same as, and
which are payable at the same time as, dividends declared on the Heritage
Jersey Shares; (iii) the effective right to vote at Heritage Jersey
shareholder meetings on the basis of one vote for each Exchangeable Share
outstanding; (iv) the right to participate in the case of an insolvency
proceeding of Heritage Jersey on a pro rata basis with the holders of the
Heritage Jersey Shares; and (v) the right to participate in the event of a
change of control of Heritage Jersey on a pro rata basis with the holders of
the Heritage Jersey Shares. The Exchangeable Shares will be subject to
mandatory exchange on or after the seventh anniversary of the effective date
of the Arrangement, subject to earlier mandatory exchanges in prescribed
circumstances.
    Canadian resident holders of Heritage Shares who do not submit a
completed Letter of Transmittal and Election Form or, in the case of
beneficial shareholders, do not provide election instructions through their
broker or other intermediary by the election deadline for the Arrangement on
March 18, 2008, will be deemed to have elected to receive Heritage Jersey
Shares upon completion of the Arrangement.
    Consistent with the treatment of the Heritage Shares, the Arrangement
will result in each outstanding option to purchase Heritage Shares being
exchanged for ten options to purchase Heritage Jersey Shares, and the exercise
price for the options to be divided by a factor of ten and converted into
pounds sterling of the United Kingdom from Canadian dollars.
    Upon completion of the Arrangement, it is expected that current Heritage
directors Messrs. Buckingham, Atherton, Hibberd and Turnbull will be appointed
as directors of Heritage Jersey. Additional independent directors may also be
appointed to the Heritage Jersey board in due course. Messrs. Buckingham and
Atherton will serve as the Chief Executive Officer and Chief Financial Officer
of Heritage Jersey, respectively.
    The Board of Directors of Heritage has unanimously approved the
Arrangement and determined that the Arrangement is in the best interests of
Heritage and the Heritage shareholders and Heritage optionholders and
recommends that all Heritage shareholders and Heritage optionholders vote for
the Arrangement, as the Board of Directors intend to do in relation to
Heritage Shares in which they are invested.
    No stock exchange, securities commission or other regulatory authority
has approved or disapproved the information contained herein. This
announcement is for information purposes only and does not constitute an offer
or invitation to acquire or dispose of any securities or investment advice in
any jurisdiction.
    JPMorgan Cazenove Limited is acting exclusively for Heritage and Heritage
Jersey and for no one else in connection with the Arrangement and Admission,
and will not be responsible to anyone other than Heritage and Heritage Jersey
for providing protections afforded to its customers, or for providing advice
in relation to any transaction or arrangement referred to herein.

    
    Note to Editors:

    -   Heritage is an international oil and gas corporation with a
        diversified portfolio of properties, including producing properties
        in Oman and Russia and exploration projects in Uganda, the Democratic
        Republic of Congo, the Kurdistan region of Iraq, Mali, Pakistan and
        Malta.

    -   For further information please refer to our website at
        www.heritageoilcorp.com.

    -   This press release is not for distribution to United States Newswire
        Services or for dissemination in the United States, South Africa,
        Australia and Japan.

    -   If you would prefer to receive press releases via email please
        contact Sarah Gingerich (sarah@chfir.com) and specify "Heritage
        press releases" in the subject line.
    

    FORWARD-LOOKING STATEMENTS:

    Except for statements of historical fact, all statements in this news
release - including, without limitation, statements regarding production
estimates and future plans and objectives of Heritage as well as statements
about the proposed Arrangement, including the timing, implementation or
completion of the Arrangement and Admission - are forward-looking statements
that involve various risks and uncertainties. There can be no assurance that
such statements will prove to be accurate; actual results and future events
could differ materially from those anticipated in such statements. Factors
that could cause actual results to differ materially from anticipated results
include risks and uncertainties such as: risks relating to estimates of
reserves and recoveries; risks relating to the completion of the Arrangement
on its proposed terms, in the time frame proposed or at all; production and
operating cost assumptions; development risks and costs; the risk of commodity
price fluctuations; political and regulatory risks; and other risks and
uncertainties as disclosed under the heading "Risk Factors" in its AIF and
elsewhere in Heritage documents filed from time-to-time with the TSX and other
regulatory authorities. Further, any forward-looking statement is made only as
of a certain date and the Company undertakes no obligation to update any
forward-looking statement or statements to reflect events or circumstances
after the date on which such statement is made or reflect the occurrence of
unanticipated events, except as may be required by applicable securities laws.
New factors emerge from time to time, and it is not possible for management of
the Company to predict all of these factors and to assess in advance the
impact of each such factor on the Company's business or the extent to which
any factor, or combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statement.

    %SEDAR: 00010129E




For further information:

For further information: Financial Adviser: JPMorgan Cazenove Limited,
Ian Hannam, Neil Haycock, James Taylor, Tel: +44 (0) 20 7588 2828; Investor
Relations, PR - Europe, Bell Pottinger Corporate & Financial, Ann-marie
Wilkinson, Nick Lambert, Tel: +44 (0) 20 7861 3232, Email:
AMWilkinson@bell-pottinger.co.uk, NLambert@bell-pottinger.co.uk; Canada, CHF
Investor Relations, Cathy Hume, Lindsay Carpenter, (416) 868-1079 x231, x239,
cathy@chfir.com, lindsay@chfir.com; Heritage Oil Corporation, Tony Buckingham,
Paul Atherton, Tel: +41 91 973 1800, +44 870 011 5555, (403) 234-9974, Email:
info@heritageoilcorp.com

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HERITAGE OIL CORPORATION

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