| CATEGORY: NEWS AND ANNOUNCEMENTS SECTOR: OIL & GAS PRODUCERS |
Heritage Oil strikes big in Kurdistan |
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Wed 06 May 2009
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LONDON (SHARECAST) - News that Heritage Oil had made a major discovery in the Kurdistan region of Iraq sent shares in the explorer surging 20% Wednesday.
Following completion of an initial test programme on the Miran West-1 well, Heritage estimates that there’s between 2.3 and 4.2 billion barrels of oil-in-place at the Miran field.
It expects to be able to recover between 50% and 70% of the oil and estimates flow rates of between 10,000 to 15,000 bopd per well.
Heritage thinks it should be able to start exporting oil from the Miran field later this year.
“The presence of oil in such a large structure with a multi-billion barrel reserves potential illustrates the significance of this discovery,” said boss Tony Buckingham.
“The Miran field has the potential to deliver significant value as it will be a major source of reserve and production growth for Heritage.”
Buckingham also sees further upside potential with the neighbouring Miran East structure, which together with Miran West has an area of about 330 square kilometres.
Analysts at Ambrian called it an “outstanding" result.
“Taking the low oil-in-place estimate of 2.3bn bbls and applying the low recovery factor of 50%, we derive a preliminary recoverable volume of 1.15bn bbls of good-quality 24 APIº gravity oil,” it said.
As a result, its Risked Exploration Net Asset Value (RENAV) goes up by 238p to 585p and “significantly” de-risks the adjacent and geologically similar Miran East structure.
Using assumptions of 4.2bn bbls and a 70% recovery factor, the RENAV per share increases to 1,241p.
Heritage is operator and holds a 75% interest in the Miran Licence, with Genel Energy International Limited holding 25%.
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