UPDATE 3-Heritage Iraq well disappoints, Uganda sale delayed
2010-04-07 12:12 (UTC)
By Sarah Young
LONDON, April 7 (Reuters) - British oil explorer Heritage Oil said it would need to drill deeper at a test well in Iraq and pushed out the timeframe for completion on a deal to sell its Ugandan interests, hurting its shares.
Heritage said on Wednesday that having drilled to a depth of 2,627 metres at its Miran West-2 well in the Kurdistan region of Iraq, it would need to extend exploration to 4,600 metres, adding four to five months to its drilling schedule.
'The market had been primed to get a more conclusive flow test from this well following the perception that the flow rate from the original Miran West-1 was relatively low,' said Arbuthnot analyst Dougie Youngson, referring to a previous well drilled on the Miran structure.
Shares in the FTSE 250 company were down 9.5 percent at 526 pence by 1045 GMT, making them the worst performer on Britain's index of medium-sized companies.
Heritage also said it had received a letter from the Ugandan government saying that it would conclude its review of Heritage's sale of its stakes in Uganda's block 1 and block 3A oil fields to Tullow Oil within eight weeks.
Heritage will be able to close the deal once it has received formal approval from the government which it expects to come shortly after the government review has concluded.
The new schedule for completion of the deal represents a delay on earlier guidance given by Heritage which had said it expected to close the deal in the first three months of 2010.
Ugandan Energy Minister Hillary Onek told Reuters by telephone that he was still awaiting information from Tullow , Heritage's partner in the two blocks which are situated on the shores of Lake Albert.
'In principle we have approved the deal but we still need a lot of information from Tullow before we can make any announcements,' Onek said.
'As soon as Tullow provides us with all the information we have asked for, the sooner we'll conclude the process. We've been asking them for certain information which we have failed to get.'
He did not say what information Kampala had not received.
Tullow said it had provided the government with the information it had requested.
'Tullow submitted all of the required documentation as per the government request last week,' Brian Glover, Tullow Uganda Country Manager told Reuters on Wednesday.
Tullow, which is also the sole-owner of a third block in between the other two blocks, plans to bring in China's CNOOC and French oil major Total as equal partners in the three Ugandan oil blocks once the deal with Heritage has closed.
2010-04-07 12:12 (UTC)
By Sarah Young
LONDON, April 7 (Reuters) - British oil explorer Heritage Oil said it would need to drill deeper at a test well in Iraq and pushed out the timeframe for completion on a deal to sell its Ugandan interests, hurting its shares.
Heritage said on Wednesday that having drilled to a depth of 2,627 metres at its Miran West-2 well in the Kurdistan region of Iraq, it would need to extend exploration to 4,600 metres, adding four to five months to its drilling schedule.
'The market had been primed to get a more conclusive flow test from this well following the perception that the flow rate from the original Miran West-1 was relatively low,' said Arbuthnot analyst Dougie Youngson, referring to a previous well drilled on the Miran structure.
Shares in the FTSE 250 company were down 9.5 percent at 526 pence by 1045 GMT, making them the worst performer on Britain's index of medium-sized companies.
Heritage also said it had received a letter from the Ugandan government saying that it would conclude its review of Heritage's sale of its stakes in Uganda's block 1 and block 3A oil fields to Tullow Oil within eight weeks.
Heritage will be able to close the deal once it has received formal approval from the government which it expects to come shortly after the government review has concluded.
The new schedule for completion of the deal represents a delay on earlier guidance given by Heritage which had said it expected to close the deal in the first three months of 2010.
Ugandan Energy Minister Hillary Onek told Reuters by telephone that he was still awaiting information from Tullow , Heritage's partner in the two blocks which are situated on the shores of Lake Albert.
'In principle we have approved the deal but we still need a lot of information from Tullow before we can make any announcements,' Onek said.
'As soon as Tullow provides us with all the information we have asked for, the sooner we'll conclude the process. We've been asking them for certain information which we have failed to get.'
He did not say what information Kampala had not received.
Tullow said it had provided the government with the information it had requested.
'Tullow submitted all of the required documentation as per the government request last week,' Brian Glover, Tullow Uganda Country Manager told Reuters on Wednesday.
Tullow, which is also the sole-owner of a third block in between the other two blocks, plans to bring in China's CNOOC and French oil major Total as equal partners in the three Ugandan oil blocks once the deal with Heritage has closed.