Heritage Oil announces interim results 2008



    
    /THIS PRESS RELEASE IS NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE
    SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
    

    CALGARY, Aug. 28 /CNW/ - Heritage Oil Limited (LSE: HOIL), an independent
upstream exploration and production company, announces the publication of its
interim results for the six months ended 30 June 2008.

    
    Operational Highlights

    -   The Kingfisher-2 well in Block 3A, Uganda, encountered 37 metres of
        net oil pay and is currently being production tested over three
        reservoir intervals. The three corresponding intervals in Kingfisher-
        1 flowed at an aggregate 9,773 bopd
    -   Exploration risks of prospects in Block 1, Uganda, significantly
        lowered following the recent drilling success in the northern part of
        adjacent Block 2
    -   Portfolio expansion with farm-ins in Tanzania, seismic programmes to
        begin in September 2008
    -   Development of West Bukha, Oman, progressing as planned, on
        production by year-end
    -   Acquisition of 330 kilometres of 2D seismic in the Miran block,
        Kurdistan Region of Iraq, exploration drilling locations identified

    Financial Highlights

    -   Primary listing on the Main Market of the London Stock Exchange
        completed on 31 March 2008. Joined the FTSE 250 Index on 23 June 2008
    -   Net production increased by 83%
    -   Strong balance sheet with cash position of $145 million as at 30 June
        2008

    Upcoming Exploration Activity

    Heritage is about to commence its largest and most important multi-well
drilling programme with the following wells expected to be drilled in the
near-term:

    Country            Block          Prospect        Interest      Spud Date
    Uganda             Block 3A       Kingfisher-3    50%           Q3 08
    Uganda             Block 1        Warthog         50%           Q3 08
    Uganda             Block 1        Buffalo         50%           Q4 08
    Uganda             Block 1        Giraffe         50%           Q4 08
    Kurdistan Region
     of Iraq           Miran          Miran West-1    100%          Q1 09

    Tony Buckingham, Chief Executive Officer, commented:

    "The remainder of 2008 and the beginning of 2009 will be an exciting time
    for Heritage as we test Kingfisher-2, embark on a multi-well drilling
    programme in Uganda and spud our first well in the Kurdistan Region of
    Iraq. We continue to focus all available resources on generating growth
    in shareholder value through high-impact exploration activities on our
    diversified portfolio of assets."
    

    Heritage's 2008 interim report is available on its website at
www.heritageoilltd.com.
    Mr. Paul Atherton, Chief Financial Officer, will be hosting an analyst
and investor conference call at 15:00 (British Summer Time) on 28 August 2008.
The presentation that accompanies the call will be available on the website
(www.heritageoilltd.com) at 14.00 (British Summer Time). To access the call
please dial the appropriate number below shortly before the call and ask for
the Heritage Oil Ltd conference call. A replay facility will be available for
up to seven days. The telephone numbers and access codes are:

    
    Live Event

    Dial-in number:          +44(0)20 7138 0826 (UK and worldwide)
                             +1 514 807 0007 (Canada)
                             +1 718 354 1157 (US)
    Passcode:                9631244

    Replay facility available for seven days:
    Dial-in number:          +44 (0)20 7806 1970 (UK and worldwide)
                             +1 718 354 1112 (Canada/ US)
    Passcode:                9631244

    If you would prefer to receive press releases via email please contact
    Sasha Abrams (sasha@chfir.com) and specify "Heritage press releases"
    in the subject line.

    CHAIRMAN'S AND CHIEF EXECUTIVE OFFICER'S STATEMENT

    Africa
    ------
    

    Uganda - Block 3A

    The Albert Basin in Uganda remains one of the key focus areas for
Heritage. We estimate that this Basin has a multi-billion barrel reserve
potential in a gross acreage position covering in excess of 12,000 square
kilometres, roughly equivalent to 55 North Sea blocks.
    The Kingfisher-2 appraisal well in Block 3A has encountered oil-bearing
zones which preliminary interpretation indicates to be the lateral equivalent
of the three pay zones in Kingfisher-1. The Kingfisher-2 zones have an
estimated net oil pay of 37 metres over a gross interval of approximately
100 metres. In Kingfisher-1, completed in March 2007, the corresponding
intervals flowed 30 degrees - 32 degrees API oil at an aggregate rate of 9,773
barrels of oil per day when production tested. Although the deeper
Kingfisher-2 target was not charged with hydrocarbons, we encountered basal
sands comprising approximately 30 metres of reservoir overlain by an effective
shale top-seal. We still view the basal sands as an important potential
reservoir target for other prospects in Block 3A.
    Production testing on Kingfisher-2 has commenced and results are due
imminently, following which the rig will be moved south along the shoreline to
drill Kingfisher-3. The drill site is located approximately three kilometres
south of Kingfisher-2.

    Uganda - Block 1

    Drilling activity in Block 1 is planned to commence in September with an
initial two to three well exploration programme. Recent drilling success in
Block 2, very close to the Block 1 border, has significantly lowered the
exploration risks in Block 1. A structural trend, characterised by high
amplitude anomalies in the seismic data, can be traced northwards from Tullow
Oil Plc's Kasamene-1 discovery, just 2.5 kilometres south of Block 1, through
the Warthog, Giraffe and Buffalo prospects in Block 1. Both the Buffalo and
the Giraffe prospects were assessed independently by RPS Energy, as at 30
September 2007, to have mean gross un-risked prospective resources of 420
million and 89 million barrels of oil, respectively.

    Tanzania

    In April 2008, Heritage entered into farm-in agreements on two licences,
covering four blocks, in Tanzania. In September of this year we plan to
commence the acquisition of 2D seismic on the Kimbiji block and the Kisangire
block. A drilling programme is expected to commence in the second half of
2009. Heritage's licences are close to the Mkuranga-1 gas discovery and there
is evidence in a neighbouring licence of a working hydrocarbon system
generating both gas and oil.

    Mali

    Heritage entered Mali in 2007, targeting large hydrocarbon-bearing
structures. This is a relatively unexplored country with only five exploration
wells drilled to date. Both oil and gas shows have been encountered close to
our acreage. Heritage has a 75% working interest in two blocks in Mali and
within the next year the acquisition of 2D seismic is planned.

    
    Middle East
    -----------
    

    The Kurdistan Region of Iraq

    The Kurdistan Region of Iraq is one of our core focus areas. The Miran
block covers an area of 1,015 square kilometres with two large anticlines that
potentially contain significant quantities of oil from multiple reservoir
targets. The initial indicative estimate from RPS Energy, based on the
structure size and evaluations from neighbouring fields was that the Miran
structure could contain over 3 billion barrels of oil in place. This estimate
was made before approximately 330 kilometres of 2D seismic was acquired
between April and June 2008. Given the encouraging results from our seismic
programme we plan to start drilling Miran in the first quarter of 2009.
    The operating environment in the Kurdistan Region of Iraq remains
relatively stable and secure. In June 2008, Baghdad and the Kurdistan Regional
Government began discussions with regard to key issues in the area. More
recently, a committee was established to address the issue of the federal oil
and gas law. Both Prime Minister Barzani of the Kurdistan Regional Government
and Federal Iraqi Prime Minister Nouri Al-Maliki serve on the committee and
are working to find a solution to the current situation.

    Oman

    The West Bukha field, in Oman, is expected to start production during the
fourth quarter of 2008 which will increase our production levels from this
area significantly. Heritage holds a 10% working interest in Block 8, an
offshore licence including the producing Bukha gas/condensate field and West
Bhuka.
    Development of the West Bukha field is proceeding as planned. The
platform was installed in June 2008 and an 18.5 kilometres sub-sea pipeline
tying the West Bukha field into the existing Bukha pipeline, and then to the
onshore facilities, was completed in July 2008.
    The "Offshore Courageous" drilling rig has drilled the West Bukha-3 well
successfully and commenced operations to tie-back the West Bukha-2 and 3 wells
to the existing Bukha platform and pipeline system to facilitate early
production. The West Bukha-2 appraisal/development well was completed at the
end of 2006. The well test produced a combined flow rate from zones tested
(Mishrif/Mauddud) of approximately 12,750 bopd and 26 MMscf/d. The oil is
light at approximately 42 degrees API.

    
    Pakistan
    --------
    

    Heritage was awarded a 60% interest in the Sanjawi Block in November
2007. This is located in the highly prospective Baluchistan province, close to
the Sui and Pirkoh gas fields. There are a number of oil seeps to the south of
the licence giving encouragement for development of an oil play. Recently
Heritage farmed into, and assumed operatorship of, the Zamzama North Block
which lies immediately north of the 2.3 TCF Zamzama gas/condensate field and
very close to infrastructure. We have a 54% interest in this Block.

    
    Russia
    ------
    

    Western Siberia

    The development of Zapadno Chumpasskoye has continued. The third
exploration and appraisal well drilled by Heritage was completed in the first
half of 2008. Average daily production of 39 degrees API oil increased to
372 bopd during the first half of this year. Current production is 550 bopd
and is expected to increase during the second half of 2008.

    
    Financial Results
    -----------------
    

    The Group's net production increased by 83% to an average of 503 bopd in
the first six months of this year compared to the same period last year.
Production is expected to increase significantly before year-end with new
production from the West Bukha field.
    The Group's net loss in the six month period ended 30 June 2008 was
$58.0 million, compared to $73.2 million in the same period last year. If the
non-cash loss on derivative financial liability relating to convertible bonds
and share-based compensation expenses, as well as the one-off reorganisation
costs are excluded, the net loss in the six month period ended 30 June 2008
was $8.4 million, compared to $18.9 million in the same period last year.

    
    Market Comment
    --------------
    

    Although oil prices have recently fallen from record high levels, the
price remains higher than last year. However, it is reported that, spare
global oil capacity remains low, at approximately 2 mmbbl/day and global
demand for oil is still growing. The International Energy Agency, the OECD
energy watchdog, and the Energy Information Administration of the USA have
2009 oil demand growth forecasts of 1.1% and 1.2%, respectively. Non-OECD
demand from China and India remains strong, despite the increase in prices
seen earlier this year. Against a backdrop of strong oil demand, existing oil
and gas fields continue to mature and oil companies are increasingly looking
to new frontier areas. As the international oil majors struggle to replace
reserves and grow production, exploration in new areas will continue.

    
    Strategy
    --------
    

    Heritage's strategy is to have a presence in frontier areas at an early
stage and focus on large high-impact hydrocarbon prospects. Frontier regions
can attract risk; political, environmental and operational, but Heritage has a
diversified portfolio and an experienced management team to counter these
potential challenges. Heritage currently has interests in Africa, the Middle
East and Russia which combine high-impact exploration with fields that are in
development and production.

    
    Corporate Social Responsibility
    -------------------------------
    

    Heritage is mindful of the areas in which it operates and engages
actively with local communities to ensure their needs are taken into
consideration during both the planning and the implementation of projects. The
Company is involved in many community, nature conservation and educational
projects as we firmly believe these are fundamental in building trust and a
respected corporate identity within these areas.

    
    Non-Executive Director Appointment
    ----------------------------------
    

    Heritage is pleased to welcome Salim Hassan Macki to the board. Salim is
an oil and gas executive, based in Oman, with considerable experience and an
extensive network of contacts and corporate knowledge. He is a valuable
addition to the Company as Heritage continues to expand its business in its
core areas of the Middle East, Africa and Russia.

    
    Outlook
    -------
    

    Heritage's strong cash position of $145 million enables us to continue to
seek out and explore in highly prospective areas to create shareholder value
without concern about potential dilution.
    The remainder of 2008 and the beginning of 2009 will be an exciting time
for Heritage as we test Kingfisher-2, embark on a multi-well drilling
programme in Uganda and spud our first well in the Kurdistan Region of Iraq.
We believe that continued successful drilling in the Albert Basin in 2008 will
prove up sufficient reserves for commercial development in Uganda, marking a
significant milestone for your Company.

    
    Michael J. Hibberd
    Chairman

    Tony Buckingham
    Chief Executive Officer



                   SELECTED OPERATIONAL AND FINANCIAL DATA

                      Six months ended   Six months ended             Change
                          30 June 2008       30 June 2007
                     --------------------------------------------------------
    Production (bpd)               503                275                83%
    Sales volume (bpd)             458                133               244%
    Average realised
     price ($/bbl)                34.9               19.6                78%
    Petroleum and
     natural gas
     revenue ($m)                  2.9                0.5               480%
    Net loss ($m)                (58.0)             (73.2)               21%
    Net loss per share
     ($)                         (0.23)             (0.33)               30%
    Total cash capital
     expenditures                 60.3               40.0                51%
    Period end cash
     balance(*)                  144.7                N/A                N/A

    (*) cash balance as at 31 December 2007 was $230.1m


    Trading performance

    Production
    ----------
    

    Average daily production increased by 83% from 275 bpd to 503 bpd in the
six month period ended 30 June 2008. This increase resulted from six months of
crude oil production in 2008 from Zapadno Chumpasskoye in Russia compared with
only one and a half months of production in the first half of 2007. This is
offset by a natural decline in production of condensate and LPG from Oman of
9%.

    
    Revenue
    -------
    

    Petroleum and natural gas revenue increased by 480% to $2.9 million, due
to higher volumes of sales from Russia and Oman and higher average commodity
prices. Crude oil sales from Zapadno Chumpasskoye in Russia increased by 602%
to $2 million, whilst sales of condensate inventory from the Bukha field in
Oman increased to $0.7million and sales of LPG increased by 40% to
$0.2million. There were no sales of condensate in the first half of 2007.
    The average realised price of $34.93 per barrel in the first half of 2008
was 78% higher than in the first half of 2007, due to higher average commodity
prices in 2008 for all products as well as changes in product mix.

    Operating results

    Petroleum and natural gas operating costs increased by 61% to
$1.2 million in 2008, due to six months of production in Russia compared to
only one and a half months of production in the first half of 2007. This
increase is in line with the higher sales volumes.
    Production tax increased from $0.2 million in the first half of 2007 to
$1.4 million in the first half of 2008. This increase is due to an increase in
volumes of oil production in Russia and higher average commodity prices in
2008 which are used in the calculation.
    General and administrative expenses decreased from $22.3 million in the
first half of 2007 to $20.1 million in the first half of 2008. This decrease
is a combination of the following expense items:

    
    -   Decrease of share-based compensation from $26.2 million in the first
        half of 2007 to $6.5 million in the first half of 2008. In 2007 there
        was a significant share-based compensation recognised with respect to
        stock options granted or approved. Heritage capitalised $1.9 million
        of share-based compensation in the first half of 2008 and $7.8
        million in the first half of 2007.

    -   One-off expenses of $9.6 million incurred in 2008 relating to the
        corporate reorganisation and subsequent listing on the London Stock
        Exchange.

    -   Increase in consultants, travel and office expenses due to the growth
        of the Group. The Group has employed additional staff and incurred
        higher expenses to support increased levels of exploration and
        development activities in the Group's core areas.
    

    If non-cash share-based compensation expenses and the one-off
reorganisation costs are excluded, net general and administrative costs
increased from $3.9 million in the first half of 2007 to $5.9 million in the
first half of 2008.
    Depletion, depreciation and amortisation expenses increased by 85% to
$1.2 million in the first half of 2008, primarily due to increased production
volumes.
    Exploration expenditures expensed in the period and not capitalised,
decreased by 91% from $3.2 million in the first half of 2007 to $0.3 million
in the first half of 2008. Exploration expenditures in the first half of 2007
related principally to activities in the Kurdistan Region of Iraq
($1.8 million), Russia ($1.1 million) and Pakistan ($0.3 million). Exploration
expenditures in the first half of 2008 related mainly to activities in
Tanzania ($0.2 million) and other potential new ventures ($0.1 million).
    Interest income of $2.0 million in the first half of 2008 was
$0.8 million higher than in the first half of 2007 as a result of higher
average cash balances. Cash and cash equivalents are typically held in
interest bearing treasury accounts. Cash generating this income was raised by
a private placement of shares for gross proceeds of $186.4 million
(Cdn $181.5 million) in November 2007 and the issue of $165 million, 8%,
unsecured, convertible bonds in February 2007.
    Convertible bonds are separated into liability and derivative liability
components (being the bondholders' conversion option) and each component is
recognised separately. The change in the fair value of the convertible bonds'
conversion options, primarily due to share price performance, resulted in a
loss of $35.4 million and $35.9 million in the first half of 2008 and 2007,
respectively.
    Other finance costs increased from $5.7 million in the first half of 2007
to $6.9 million in the first half of 2008, predominantly due to the issue of
$165 million convertible bonds in February 2007 that led to higher interest
and accretion expenses.
    Heritage recognised an unrealised gain in the fair value of its
investment in Afren plc ("Afren") warrants of $1.9 million during the first
half of 2008 and $0.1 million during the first half of 2007. Heritage holds
1,500,000 warrants in Afren, received as partial consideration from the sale
of Heritage Congo in 2006.
    Heritage's net loss in the first half of 2008 was $58.0 million, compared
to $73.2 million in the first half of 2007. If non-cash share-based
compensation expenses, non-cash loss on derivative financial liability and
one-off reorganisation costs are excluded, the net loss reduced from
$18.9 million in the six months ended 30 June 2007 to $8.4 million in the six
months ended 30 June 2008. In the first half of 2008 the basic and diluted
loss per share were $0.23, compared to basic and diluted loss per share of
$0.33 in the first half of 2007.

    Cash flow and capital expenditure

    Cash used in operating activities of continuing operations was
$25.5 million in the first half of 2008 compared to $1.7 million in the first
half of 2007. Total cash capital expenditures in the first half of 2008 were
$60.3 million compared to $40 million in the first half of 2007. The following
work was undertaken in the first half of 2008:

    
    -   In Block 3A, Uganda, the deviated appraisal well Kingfisher-2 drilled
        and reached a total depth of 3,906 metres, (3,197 metres true
        vertical depth) in August 2008. Heritage is currently testing three
        zones which have an estimated net pay of 37 metres over a gross
        interval of approximately 100 metres.

    -   A 2D seismic programme of approximately 330 kilometres was acquired
        over the Miran Block, in the Kurdistan Region of Iraq, between April
        and June 2008. Initial interpretation of the seismic shows two large
        structures, each with multi-zone potential reservoir targets. A
        drilling programme is currently planned to commence in the first
        quarter of 2009.

    -   Development of the West Bukha field in Oman is ongoing. The platform
        was installed in June 2008 and the "Offshore Courageous" drilling rig
        was drilling the West Bukha-3 well.

    -   The drilling of the third exploration and appraisal well was
        completed in the first half of 2008 in Zapadno Chumpasskoye in
        Russia. Production from this well is expected to commence in the
        second half of 2008.

    -   During the first half of 2008, Heritage signed documentation to farm-
        in to two licences covering four exploration blocks in Tanzania,
        which were subject to the approval of the Government of Tanzania.
        Approval has been received for the farm-in to the Kimbiji and Latham
        licence and approval is expected shortly for the Kisangire and
        Lukuliro licence. The four exploration blocks cover approximately
        25,000 square kilometres.

    -   Heritage had a net decrease in cash and cash equivalents during the
        first half of 2008 of $85.4 million
    

    Financial Position

    
    Liquidity
    ---------
    

    At 30 June 2008, Heritage had a working capital surplus of
$130.7 million, including cash and cash equivalents of $144.7 million.

    
    Capital structure
    -----------------
    

    Heritage's financial strategy has been to fund its capital expenditure
programmes and any potential acquisitions by selling non-core assets,
reinvesting funds from operations, using existing treasury resources, finding
new credit facilities and, when considered appropriate, either issuing
unsecured convertible bonds or equity.
    Heritage had net debt of $112.6 million at 30 June 2008, compared with
net cash of $13.7 million at 31 December 2007, and a gearing ratio of 79%.

    
    Paul Atherton
    Chief Financial Officer

    27 August 2008



       HERITAGE OIL LIMITED - CONDENSED CONSOLIDATED INCOME STATEMENT

                                                  Six months      Six months
                                                    ended 30        ended 30
                                                   June 2008       June 2007
                                            ---------------------------------
                                                           $               $

    Revenue

    Petroleum and natural gas                      2,909,491         472,408

    Expenses

    Petroleum and natural gas operating           (1,243,015)       (773,475)

    Drilling rig operating                                 -         (38,359)

    Production tax                                (1,400,664)       (172,409)

    General and administrative                   (20,132,529)    (22,307,592)

    Foreign exchange gains/(losses)                1,834,611         (76,413)

    Depletion, depreciation and amortisation      (1,218,766)       (659,023)

    Exploration expenditures                        (301,253)     (3,197,784)

                                            ---------------------------------
                                                 (22,461,616)    (27,225,055)

                                            ---------------------------------
    Gain on disposal of subsidiaries                       -       1,077,132

                                            ---------------------------------
    Finance income (costs)

    Interest income                                2,005,905       1,208,602

    Loss on redemption of liability
     component of convertible bonds                        -      (7,155,622)

    Loss on derivative financial liability
     relating to convertible bonds               (35,387,493)    (35,915,673)

    Other finance costs                           (6,898,888)     (5,738,893)

    Unrealised gain on other financial
     assets                                        1,857,243          75,007

                                            ---------------------------------
                                                 (38,423,233)    (47,526,579)

                                            ---------------------------------
    Net loss for the period attributable to
     equity holders of the Company               (57,975,358)    (73,202,094)

    Net loss per share

    Basic and diluted                                  (0.23)          (0.33)
                                            ---------------------------------



                             HERITAGE OIL LIMITED
                     CONDENSED CONSOLIDATED BALANCE SHEET

                                            ---------------------------------
                                                     30 June     31 December
                                                        2008            2007
                                            ---------------------------------
                                                           $               $
    ASSETS
    Non-current assets
    Intangible exploration assets                154,469,793     102,862,754
    Property, plant and equipment                 78,248,634      64,225,918
    Other financial assets                         6,901,444       5,044,201
                                            ---------------------------------
                                                 239,619,871     172,132,873
                                            ---------------------------------
    Current assets
    Inventories                                      345,974         199,465
    Prepaid expenses                                 657,950         447,271
    Trade and other receivables                   13,941,533       6,759,261
    Cash and cash equivalents                    144,695,274     230,089,323
                                            ---------------------------------
                                                 159,640,731     237,495,320
                                            ---------------------------------
                                                 399,260,602     409,628,193
                                            ---------------------------------

    LIABILITIES
    Current
    Trade and other payables                      28,309,072      24,646,531
    Borrowings                                       635,620         623,640
                                            ---------------------------------
                                                  28,944,692      25,270,171
                                            ---------------------------------

    Non-current liabilities
    Borrowings                                   156,020,653     154,253,701
    Derivative financial liability                72,127,483      36,739,990
    Provisions                                       178,725         170,899
                                            ---------------------------------
                                                 228,326,861     191,164,590
                                            ---------------------------------
    Total liabilities                            257,271,553     216,434,761
                                            ---------------------------------
    Net assets                                   141,989,049     193,193,432
                                            ---------------------------------

    SHAREHOLDERS' EQUITY
    ATTRIBUTABLE TO EQUITY
    HOLDERS OF THE COMPANY
    Share capital                                217,969,443     217,672,243
    Deficit                                     (125,632,528)    (67,657,170)
    Reserves                                      49,652,134      43,178,359
                                            ---------------------------------
                                                 141,989,049     193,193,432
                                            ---------------------------------



                             HERITAGE OIL LIMITED
                 CONDENSED CONSOLIDATED CASH FLOW STATEMENT

                                            ---------------------------------
                                                  Six months      Six months
                                                    ended 30        ended 30
                                                   June 2008       June 2007
                                            ---------------------------------

    Cash provided by (used in)
    Operating activities
    Net loss for the period                      (57,975,358)    (73,202,094)
    Items not affecting cash
    Depletion, depreciation and
     amortisation                                  1,218,766         659,023
    Finance costs - accretion expenses             2,060,811       1,160,249
    Foreign exchange (gains)/losses                 (385,876)         16,497
    Share-based compensation                       4,521,052      20,106,690
    Loss on redemption of convertible bonds                -       7,155,622
    Loss on derivative financial liability        35,387,493      35,915,673
    Gain on disposal of subsidiaries                       -      (1,077,132)
    Gain on other financial assets                (1,857,243)        (75,007)
    Decrease in trade and other receivables           79,080       6,012,598
    (Increase) decrease in prepaid expenses         (210,679)        347,666
    (Increase) decrease in inventory                (146,509)       (338,818)
    Increase (decrease)in trade and other
     payables                                     (8,172,390)      1,596,170
                                            ---------------------------------
                                                 (25,480,853)     (1,722,863)
                                            ---------------------------------
    Investing activities
    Property, plant and equipment
     expenditures                                 (8,703,142)    (25,050,269)
    Intangible exploration expenditures          (51,607,039)    (14,643,063)
    Intangible development expenditures                    -         (63,840)
    Investment in shares                                   -         (200,00)
                                            ---------------------------------
                                                 (60,310,181)    (39,957,172)
                                            ---------------------------------
    Financing activities
    Shares issues for cash                           171,791          51,921
    Convertible bonds                                      -     165,000,000
    Convertible bond issue costs                           -      (6,979,268)
    Redemption of convertible bonds                        -     (83,022,752)
    Repayment of long-term debt                     (312,862)        (77,567)
                                            ---------------------------------
                                                    (141,071)     74,972,334
                                            ---------------------------------
    Increase (decrease) in cash and cash
     equivalents                                 (85,932,105)     33,292,299
    Cash and cash equivalents - beginning
     of the year                                 230,089,323      46,861,146
    Foreign exchange gain on cash held in
     foreign currency                                538,056         201,636
                                            ---------------------------------
    Cash and cash equivalents - end of
     period                                      144,695,274      80,355,081
                                            ---------------------------------
    

    Statement of Directors' Responsibilities

    The condensed interim consolidated financial statements have been
prepared in accordance with International Financial Reporting Standard (IFRS)
IAS 34 Interim Financial Reporting.
    They do not include all information required for full annual financial
statements, and should be read in conjunction with the consolidated financial
statements of Heritage Oil Corporation and all its subsidiaries as at the
year-ended 31 December 2007.
    The condensed interim consolidated financial statements were approved by
the Board and authorised for issuance on 27 August 2008.

    FORWARD-LOOKING INFORMATION:

    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 - constitute
forward-looking information 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; 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
Prospectus and elsewhere in Heritage documents filed from time-to-time with
the London Stock Exchange and other regulatory authorities. Further, any
forward-looking information is made only as of a certain date and the Company
undertakes no obligation to update any forward-looking information 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 information.

    %SEDAR: 00010129E




For further information:

For further information: Heritage Oil Limited, Tony Buckingham, CEO,
Paul Atherton, CFO, +44 (0) 1534 873 000, +41 91 973 1800, (403) 234-9974,
Email: info@heritageoilltd.com; Heritage Oil Limited - Investor Relations,
Tanya Clarke, +44 (0) 20 7518 0838, tc@heritageoilltd.com; Bell Pottinger
Corporate & Financial - PR - Europe, Nick Lambert, Andrew Benbow, +44 (0) 20
7861 3232, NLambert@bell-pottinger.co.uk, ABenbow@bell-pottinger.co.uk; CHF
Investor Relations - Investor Relations - Canada, Cathy Hume, Lindsay
Carpenter, (416) 868-1079 x231, x239, cathy@chfir.com, lindsay@chfir.com

Organization Profile

HERITAGE OIL CORPORATION

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890