» » Heritage Oil Proposes Special Dividend On Sale Of Ugandan Interests – Update

Heritage Oil Proposes Special Dividend On Sale Of Ugandan Interests – Update

(RTTNews) – Upstream exploration and production company Heritage Oil Plc (HOIL.L), Tuesday, in its interim management statement for the period from January 1 to May 17, 2010, said it expects an approval from the Ugandan Government for the disposal of its interests in Uganda within the next couple of weeks. The company anticipates to close the transaction shortly thereafter and intends to return a portion of the sale proceeds to shareholders through a special dividend.

It was in December 2009 that a sale and purchase agreement was executed with ENI International B.V. to sell Heritage’s 50% working interests in Blocks 1 and 3A in Uganda for a cash consideration of $1.35 billion and a deferred consideration of $150 million in cash or an interest in a mutually agreed asset.

Subsequently, in January 2010, Tullow Uganda Ltd. had exercised its right of pre-emption on the same terms and conditions as agreed with ENI International. However, in April, Ugandan Government supported Heritage’s sale and transfer of its Ugandan interests.

According to the company, the completion of the sale will leave it in a very strong financial position with excess cash, and it intends to return a portion of the disposal proceeds to shareholders through a special dividend. Heritage Oil has proposed a dividend of 75 pence to 100 pence per share following the completion of the sale of the Ugandan interests.
For the first quarter, production averaged 583 bopd, 77% higher than the daily average for 2009.

The company said it expects to complete exploration drilling of the Miran West-2 well in the third quarter of 2010, which has been re-engineered and planned to complete deepening.

Tony Buckingham, chief executive officer said, “2010 is proving to be another busy year for Heritage with active work programmes across our portfolio. We are currently finalising plans to embark on a diversified drilling programme in our core areas. We look forward to completing the sale of our Ugandan interests and are evaluating a number of opportunities which have the potential to continue to generate further shareholder value and therefore ensure a continuing growth profile.”

HOIL.L is currently trading at 477.4 pence, up 12.5 pence or 2.69%, on a volume of 315 thousand shares.

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