Heritage Oil announces intention to list on the London Stock Exchange


    CALGARY, March 28 /CNW/ - Heritage Oil Corporation (together with its
subsidiaries, the "Group") (TSX: HOC) today announces the intention of
Heritage Oil Limited ("Heritage Jersey"), the Jersey-incorporated proposed
parent company of Heritage following completion of a court-approved plan of
arrangement (the "Arrangement") under the Business Corporations Act (Alberta),
and of Heritage concurrently to apply for the admission to listing of the
ordinary shares of Heritage Jersey (the "Heritage Jersey Shares") and a new
class of exchangeable shares of Heritage (the "Exchangeable Shares") on the
Official List (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"). Following completion of the
Arrangement, Heritage Jersey will be the parent company of Heritage. Approval
for the Arrangement was obtained from Heritage securityholders at the special
meeting which took place on 20 March 2008. In addition, the court of Queen's
Bench of Alberta has granted a final order to approve the Arrangement and the
proposed Admission. Admission is expected to occur on 31 March 2008. The
trading symbol for the Heritage Jersey Shares will be HOIL.
    Heritage intends to delist its existing common shares ("Heritage Shares")
from the Toronto Stock Exchange (the "TSX") and at the same time, obtain a
listing for the Exchangeable Shares on the TSX (TSX: HOC) and the Official
List (LSE: HOX). Heritage is also proposing to conduct a split of its shares
by a factor of ten, with the result 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.

    Heritage is an independent upstream exploration and production company
engaged in the exploration for, and the development, production and
acquisition of, oil and gas in its core areas of Africa, the Middle East and
    JPMorgan Cazenove Limited ("JPMorgan Cazenove") has been appointed to
advise Heritage and Heritage Jersey and will act as sponsor in connection with

    Key Highlights
    -   The Group has producing properties in Oman and Russia and exploration
        projects in Uganda, the Kurdistan Region of Iraq (the "KRI"), the
        Democratic Republic of Congo (the "DRC"), Malta, Pakistan and Mali;

    -   In Uganda, the high-impact Kingfisher-2 appraisal/exploration well is
        expected to spud in the second quarter of 2008. The Kingfisher-2 well
        will appraise the reservoir zones discovered by the Kingfisher-1
        well, which was completed in 2007 and cumulatively tested
        approximately 13,900 barrels of oil per day ("bbl/d") from four
        separate intervals. These productive zones were secondary objectives,
        since the primary, deeper target was not reached for reasons related
        to rig performance. The Kingfisher-2 well will be drilled using the
        more capable Nabors 221 rig, and in addition to appraising the
        previous discoveries, will explore the original, deeper primary

    -   As at 30 September 2007, the Group had proved plus probable net
        entitlement reserves of 62.1 million barrels of oil equivalent
        ("MMboe"), valued at US$260 million at a discount rate of 10%, as
        certified by RPS Energy;

    -   As at 30 September 2007, the Group had proved plus probable plus
        possible net entitlement reserves of 163.9 MMboe, valued at
        US$824 million at a discount rate of 10%, as certified by RPS Energy;

    -   As at 30 September 2007, the Group had a 50% working interest share
        of the mean risked working interest prospective resources from
        Blocks 3A and 1 in Uganda of 462 MMboe (923 MMboe gross), as
        certified by RPS Energy. The Government of Uganda has a back-in right
        which could, if exercised, reduce Heritage's working interest to
        42.5%. In the event that these resources were to mature into reserves
        these barrels would be subject to the PSC arrangements in Blocks 3A
        and 1 and result in net entitlement reserves that reflect those

    -   The Group has a strong financial position following receipt of gross
        proceeds from a private placement of US$165 million of 8% convertible
        bonds in February 2007 and a primary common share fundraising of
        Cdn$181.5 million completed in November 2007;

    -   The Group's net condensate and Liquid Petroleum Gas ("LPG")
        production from the Bukha field in Oman in January 2008 averaged
        109 bbl/d with net production for the nine months ended 30 September
        2007, averaging 147 bbl/d. Following commencement of production on
        17 May 2007, crude oil production in Russia averaged 362 bbl/d in the
        third quarter of 2007 and averaged 342 bbl/d in February 2008;

    -   Management has a proven track record of finding new substantial
        discoveries, particularly in Africa, including the hydrocarbon system
        in the Albert Basin in Uganda and the M'Boundi oilfield in the
        Republic of Congo (the "Congo");

    -   Heritage Jersey has appointed General Sir Michael Wilkes KCB, CBE as
        a Non-Executive Director; and

    -   At a special meeting of Heritage Oil Corporation held on 20 March
        2008, over 99.9% of all Heritage shareholders voting at the meeting
        voted to approve the Plan of Arrangement and London listing. In
        addition, the Court of Queen's Bench of Alberta has granted a final
        order to approve the Arrangement and the proposed Admission.
        Approximately 98% of the existing common shares of Heritage Oil
        Corporation will be exchanged for Heritage Jersey Shares with the
        balance of the existing common shares of Heritage Oil Corporation to
        be exchanged for Exchangeable Shares.

    The above reserves are based on a barrel of oil equivalent ("boe") of
natural gas and crude oil on the basis of 1 boe for 6 Mcf (thousand cubic
feet) of natural gas (this conversion factor is an industry accepted norm).
The valuations are based on forecast prices and costs.
    Commenting on the proposed Admission, Tony Buckingham, CEO of Heritage
    "We consider Heritage's proposed listing on the London Stock Exchange to
be a significant milestone for the Group. It will result in increased
liquidity as well as value creation opportunities for all shareholders. The
timing is opportune given the high-impact drilling campaigns we will undertake
in Uganda and Kurdistan this year. I am delighted to welcome General Sir
Michael Wilkes to the Heritage Group. He is an outstanding addition to the
Board as he brings considerable corporate experience, an extensive network of
contacts and strong corporate governance experience."
    Michael Hibberd, Chairman of Heritage, added:
    "We believe that the reorganisation and a London listing are in the best
interests of Heritage and our investors. We fully expect the initiatives we
have undertaken will enhance our profile and status amongst European investors
and within the oil and gas sector generally. We also expect increased trading
liquidity and access to an international market with a broad, relevant peer
group and considerable research expertise. Given the geographic spread of
Heritage's production, development and exploration licences, we believe it is
more appropriate for the Company to be based in Europe, where a substantial
number of investors and many of the Company's management reside. The
overwhelming support for the transaction at the recent special meeting
demonstrates shareholders support our strategy."

    Information on Heritage

    Rationale for Plan of Arrangement and London listing
    -   the Directors of Heritage (the "Directors") believe that given the
        geographic spread of the Group's production, development and
        exploration licences with a core focus on Africa, the Middle East and
        Russia, it would be more appropriate for the Group to be based in
        Europe, where a substantial number of investors in Heritage and most
        of the management of the Group reside; and

    -   the Directors also believe Admission will raise the Group's profile
        and status amongst European investors and within the oil and gas
        sector generally, and will give the Group access to an international
        market with a broad, relevant peer group and considerable research
        expertise. The Directors expect that Admission will assist in
        increasing the trading and liquidity of Heritage Jersey Shares.

    Competitive Strengths and Competitive Advantages

    Ability to secure a portfolio of high impact international plays
    Heritage has a proven track record of delivering growth in shareholder
value through its strategy of focussing on high-impact international plays
containing multiple targets with the potential to discover large reserves of
    The Group's current focus areas are the Albert Basin in Uganda and the
Lake Albert region in the DRC, the KRI and West Siberia, where it has been
able to source and secure properties as a result of a number of factors,
including those below, which the Directors believe represent Heritage's
principal competitive advantages:

    -   the Group adopts a methodology for appraising potential opportunities
        centred around the appreciation and management of technical and
        political risk. This approach, together with the experience of
        Heritage's management and technical teams, has enabled Heritage to
        identify and be amongst the first international oil companies to hold
        interests in, territories such as Uganda, the eastern DRC and more
        recently, the KRI; and

    -   the Group has a proven track record in sourcing deals, and has
        demonstrated its first-mover advantage in acquiring many of its
        assets using a hands-on approach, combined with the flexibility and
        speed of the management team. The Group has a flat, lean management
        structure, which enables quick and effective decision making.

    Strong management and technical teams
    The Group's management and technical team has a track record of finding
attractive oil discoveries including the hydrocarbon system in the Albert
Basin in Uganda and the M'Boundi field in the Congo. The Group leverages off a
highly effective network of influential industrial, political and
institutional relationships. These relationships enable the Group to form
strategic alliances reducing both resource commitments and exploration and
development risk, as well as giving the Group access to properties.

    Diversified portfolio of assets
    The Group has built a diversified portfolio of assets by geography,
product and development stage. Geographically, the Group's portfolio is spread
between the core areas of focus of Africa, the Middle East and Russia. In
addition, Heritage may from time to time invest in opportunistic plays,
outside of these core geographies, if management believe that the relevant
investment will enhance shareholder value. Examples of such investments
include the Group's recently acquired interests in Malta and Pakistan.
    The Group's portfolio contains a spread of existing production, reserves
and resources between oil, gas, condensate and LPG, with a focus on oil.
Furthermore, Heritage's assets are well spread across the development cycle.
The Group currently has producing assets in Oman and the Zapadno-Chumpasskoye
licence in Western Siberia, a development property in Oman, together with
exploration and appraisal properties in Uganda, KRI, the DRC, Malta, Mali and

    Significant presence in the Albert Basin in Uganda
    The Albert Basin in Uganda is considered by management to contain
significant quantities of oil. Assets in the Albert Basin are controlled by
Heritage and Tullow Oil plc ("Tullow"). Heritage is partnered with Tullow on
Blocks 1 and 3A, with each company holding a 50% interest.
    Eight successful exploration and appraisal wells have been drilled in the
Albert Basin over the last two years and each well encountered oil-bearing
reservoirs. Of these eight, two wells tested at over 12,000 bbl/d. First
production is targeted by management to commence in the medium term with
potential production estimated to be in excess of 100,000 bbl/d if an
international export pipeline from Lake Albert to Mombasa on the east coast of
Kenya is built.
    An additional benefit of Heritage's presence in the Albert Basin is its
proximity to the Group's interests in Blocks 1 and 2 on Lake Albert in the
DRC. The exploration programme in the DRC will only commence following receipt
of a Presidential Decree, the timing of which is yet uncertain.

    First-mover advantage in the KRI
    Heritage was one of the first companies to be awarded a Production
Sharing Contract ("PSC") in the KRI. Heritage executed a PSC with the
Kurdistan Regional Government (the "KRG") over the Miran Block in the KRI on
2 October 2007. The Group has been appointed operator.
    Heritage has also entered into a separate strategic agreement with the
KRG to establish a 50/50 joint venture company which will build, own and
operate an oil refinery in the vicinity of the Miran Block. The refinery,
which is expected to have a capacity of 20,000 bbl/d, is scheduled to be
operational to design specification, within approximately two years of the
agreement being entered into.

    Historic track record of creating value and generating cash to finance
    new developments
    Historically, the Group has sold certain assets, notably in the Congo, to
create value for shareholders and to generate cash to finance development of
other oil and gas assets in the core areas. Notable disposals include:
    2002 - Disposal of the Group's 30% working interest in the Kouilou permit
in the Congo to Etablissements Maurel et Prom ("Maurel et Prom") for a total
consideration of US$35 million comprising US$30 million in cash, US$5 million
in interest bearing convertible debentures in the purchaser and the retention
of a 5% gross override royalty from the M'Boundi field, effective after
67 million barrels of oil have been produced.
    2004 - Disposal of the gross override royalty from the M'Boundi field in
the Congo to Maurel et Prom for a consideration of approximately
US$30.4 million.
    2006 - Disposal of Heritage Congo to Afren plc ("Afren") and sale of its
25% working interests in Kouakouala for a consideration of approximately
US$27 million, plus 1,500,000 Afren warrants, with a term of five years and an
exercise price of (pnds stlg)0.60 per share.


    Heritage's strategy is to generate growth in shareholder value through
the development, production and acquisition of a portfolio of oil and gas
interests. The Group has adopted a number of strategic guidelines in
conducting its business activities including the following:

    -   it acquires and invests in oil and gas properties throughout the
        world with a particular focus on Africa, the Middle East and Russia;

    -   it leverages off a highly effective network of influential
        industrial, political and institutional relationships, giving access
        to a wide variety of new oil and gas business opportunities;

    -   it acquires smaller discoveries or discoveries with special
        infrastructure requirements which are frequently ignored or abandoned
        by major oil companies and converts them, through careful due
        diligence, planning and local intelligence, into economically sound
        and ultimately, profitable developments;

    -   it identifies and accesses land deals that offer potential for high
        quality oil and gas prospects;

    -   it develops and maintains a portfolio of low to medium-risk drilling

    -   it operates, where possible, to control timing and expense levels on
        projects or maintains a close association with the operating company;

    -   it pursues projects with near term 'on stream' characteristics to
        create cash flow.

    Current Trading and Prospects

    The Group is well positioned to benefit from a number of exploration,
appraisal and development wells to be drilled in 2008. Drilling programmes in
Blocks 3A and 1 in Uganda are scheduled to commence in the second quarter of
2008. The Directors believe that the Albert Basin in Uganda represents an
exciting opportunity with the potential to discover significant quantities of
oil. An exploration well is also scheduled to commence drilling in the Miran
licence in the KRI in the second half of 2008.
    The Directors expect production from the Zapadno Chumpasskoye field in
Russia to increase from an average of 342 bbl/d in February 2008 as a result
of existing wells being brought on production, as well as further development
    Production from Block 8 in Oman is not expected to change materially from
the average net production of 109 bbl/d of LPG and condensate in January 2008
until the West Bukha field commences production, which is scheduled to occur
in the summer of 2008.

    Board of Directors on Admission

    Michael Hibberd, aged 52, Chairman and Non-Executive Director
    Mr. Hibberd has extensive international energy project planning and
capital markets experience. He has been Chairman and President of MJH Services
Inc., a private corporate finance advisory company, since 1995, prior to which
he spent 12 years with ScotiaMcLeod in corporate finance and held the position
of Director and Senior Vice-President, Corporate Finance. Mr. Hibberd has
served and continues to serve on the boards of a number of private and public
oil and gas companies, including companies listed on the TSX, Amex and TSXV.
Mr. Hibberd joined the Group in March 2006.

    Tony Buckingham, aged 56, Chief Executive Officer
    Mr. Buckingham is the founder of the Group. Mr. Buckingham commenced his
involvement in the oil industry as a North Sea diver and subsequently became a
concession negotiator acting for several companies including Ranger Oil
Limited and Premier Oil plc. He was previously a security adviser to various

    Paul Atherton, aged 42, Chief Financial Officer
    Mr. Atherton is a chartered accountant, having qualified with Deloitte &
Touche, and holds a degree in geology from Imperial College London. He has a
corporate finance background with specific experience in the international
mining and resource sectors. He joined the Group in 2000 and was elected to
the board of HOC in 2005.

    General Sir Michael Wilkes, aged 67, Non-Executive Director
    General Sir Michael Wilkes KCB, CBE, retired from the British Army (the
"Army") in 1995 as Adjutant General and Middle East Adviser to the British
Government. As Adjutant General, Sir Michael was the most senior
administrative officer within the Army and a member of the Army Board. During
his distinguished career, he has seen active service across the world while
also commanding at every level from Platoon to Field Army including commanding
22 Special Air Service Regiment and serving as the Director of Special Forces.
Sir Michael is the Non-Executive Chairman of Cyberview Technology Ltd and a
Non-Executive director of the Stanley Gibbons Group, both of which are listed
on AIM. In addition he holds non executive positions on a number of private
companies including Britam Defence and Trico Ltd and chairs the Advisory Board
of PegasusBridge Fund Management Limited, a homeland security company. He
joined the Group on 18 March 2008.

    Gregory Turnbull, aged 53, Non-Executive Director
    Mr. Turnbull is the Regional Managing Partner of the Calgary office of
the law firm of McCarthy Tétrault LLP. Mr. Turnbull has extensive knowledge of
corporate governance issues and has acted for many boards of directors and
special committees in that regard. Mr. Turnbull started his career with the
law firm of MacKimmie Matthews in 1979. From 1987 to 2001, he was a partner
with Gowlings LLP (formerly Code Hunter LLP). In 2001 and 2002, he was a
partner with the law firm of Donahue LLP. Mr. Turnbull has been a partner of
McCarthy Tétrault LLP since July 2002. He joined the Group in 1997.

    John McLeod, aged 61, Non-Executive Director
    Mr. McLeod is a professional engineer with over 36 years of varied
resources extraction experience. He is the President of McLeod Petroleum
Consulting Limited, the President, CEO and a director of California Oil and
Gas Corporation and has held senior management positions and has served on
various boards including at Constellation Oil & Gas Ltd., as President and CEO
of Arakis Energy Company; as VP, Operations of Pengrowth Gas Company, Rally
Energy Corp., CanArgo Energy Inc. and Canoro Resources. Currently, Mr. McLeod
serves as a director of Paris Energy Inc., Consolidated Beacon Resources Ltd.,
Tuscany Energy Ltd., Diaz Resources Ltd. and Keeper Resources Inc. He joined
the Group in 1998.


    This announcement has been prepared and issued by Heritage and is the
sole responsibility of Heritage, and has been approved solely for the purposes
of Section 21(2)(b) of the Financial Services and Markets Act 2000 (the
"FSMA") by JPMorgan Cazenove of 20 Moorgate, London EC2R 6DA. JPMorgan
Cazenove, which is authorised and regulated in the United Kingdom by the
Financial Services Authority is acting exclusively for Heritage and for no-one
else in connection with Admission and will not be responsible to anyone other
than Heritage for providing the protections afforded to its customers or for
providing advice in relation to Admission or any arrangement referred to
    No stock exchange, securities commission or other regulatory authority
has approved or disapproved the information contained herein.
    This announcement does not contain or constitute or form part of an offer
of securities for sale in any jurisdiction, including the United States. The
securities referred to herein have not been and will not be registered under
the U.S. Securities Act of 1933, as amended (the "Securities Act"), and may
not be offered or sold in the United States (as such term is defined in
Regulation S under the Securities Act) unless they are registered under the
Securities Act or pursuant to an available exemption therefrom. No public
offering of the Heritage Jersey Shares or the Exchangeable Shares is being
made in the United States.
    The distribution of this announcement and other information in connection
with Admission may be restricted by law in certain jurisdictions and persons
into whose possession any document or other information referred to herein
comes should inform themselves about and observe any such restriction. Any
failure to comply with these restrictions may constitute a violation of the
securities laws of any such jurisdiction.
    This announcement is an advertisement and not a prospectus and investors
should not subscribe for or purchase any securities referred to in this
announcement except solely on the basis of information in the prospectus (the
"Prospectus") to be issued by Heritage Jersey in due course in connection with
Admission. Copies of the Prospectus will, following publication, be available
from the offices of McCarthy Tétrault at 5 Old Bailey, 2nd Floor, London EC4M
7BA and at the registered offices of Heritage Jersey at Ordnance House, 31
Pier Road, St. Helier, Jersey, JE4 8PW, Channel Islands.
    This announcement (or any part of it) and the information contained
herein is not to be reproduced, published, distributed, passed on, or the
contents otherwise divulged, directly or indirectly, in or into the United
States, Australia, Japan or the Republic of South Africa, or any other
jurisdiction where such reproduction or distribution would be unlawful, and
does not constitute, or form part of, an offer of securities for sale into the
United States, Australia, Japan or the Republic of South Africa, or any other
jurisdiction. This announcement is for information purposes only and does not
constitute or form part of an offer to sell or the solicitation of an offer to
buy, nor shall there be any sale of the securities referred to herein in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration, exemption from registration or qualification under the
securities law of any such jurisdiction.
    The price and value of securities may go up as well as down. Persons
needing advice should contact a professional adviser.
    Information in this announcement or any of the documents relating to
Admission cannot be relied upon as a guide to future performance.


    Except for statements of historical fact, all statements in this
announcement - 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 Annual
Information Form 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. Subject to any obligations under
the prospectus rules, listing rules and disclosure and transparency rules made
by the Financial Services Authority under Part VI of FSMA, 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.

    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
    Lindsay Carpenter (lindsay@chfir.com) and specify "Heritage press
    releases" in the subject line.

    %SEDAR: 00010129E

For further information:

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

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