Heritage Oil Plc. Activity Update

Transcription

1 Heritage Oil Plc Activity Update June 2013

2 Disclaimer Important Notice Certain information in this presentation is based on management estimates. Such estimates have been made in good faith and represent the genuine belief of applicable members of management. Those management members believe that such estimates are founded on reasonable grounds. However, by their nature, estimates may not be correct or complete. Accordingly, no representation or warranty (express or implied) is given that such estimates are correct or complete. No representation or warranty (express or implied) is given that such estimates are so founded. Neither the Company nor J.P. Morgan Cazenove or Standard Bank undertake any obligation to correct or complete any estimate whether as a result of being aware of information (new or otherwise), future events or otherwise. Overseas shareholders This presentation has been prepared for the purposes of complying with English law and the Listing Rules of the FSA and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England. Persons who are not resident in the United Kingdom may be affected by the laws of jurisdictions other than the United Kingdom. Such persons should inform themselves about and observe any applicable requirements of such jurisdictions. Any failure by such persons to comply with any applicable restrictions may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies involved in the proposed Divestment, J.P. Morgan Cazenove and Standard Bank disclaim any responsibility or liability for the violation of such restrictions by any person. Copies of this presentation are not being, and must not be, mailed or otherwise forwarded, distributed or sent in, into or from any jurisdiction where to do so would constitute a breach of securities laws in that jurisdiction. Persons receiving this presentation (including custodians, nominees and trustees) should observe these restrictions and should not send or distribute this presentation in, into or from any such jurisdictions. CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION: This presentation includes statements that are, or may be deemed to be, forward-looking statements. These forward-looking statements include, but are not limited to, statements with regard to the outcome of the exercise of the Shoreline Option, proposed Divestment, Loan, future production and grades, projections for sales growth, estimated revenues, reserves and resources, targets for cost savings, the construction cost of new projects, the timing and outcome of exploration projects and drilling programmes, projected capital expenditures, the timing of new projects, future cash flow and debt levels, the outlook for the prices of hydrocarbons, the integration of acquisitions, the outlook for economic recovery and trends in the trading environment, statements about strategies, cost synergies, revenue benefits or integration costs and production capacity and future production levels and timing, and may be (but are not necessarily) identified by the use of words such as believes, estimates, plans, projects, anticipates, expects, intends, may, aims, plans, predicts, continues, assumes, positioned, will, or should and other similar expressions that are predictions of or indicate future events and future trends or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include matters that are not historical facts and include statements regarding the Company s intentions, beliefs or current expectations. An investor should not place undue reliance on forward-looking statements because, by their nature, they involve known and unknown risks, uncertainties and other factors and relate to events and depend on circumstances that may or may not occur in the future that are in many cases beyond the control of the Company. A number of factors could cause actual results and developments to differ materially from those expressed or implied by the forward-looking statements. In particular, there is no assurance that the conditions precedent to completion of the proposed Divestment will be satisfied or waived and the Company may not realise the anticipated benefits, operational and other synergies and/or cost savings from the proposed Divestment or the Loan repayment. Any forward-looking statements in this presentation reflect the Company s view with respect to future events as at the date of this presentation and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company s operations, results of operations, growth strategy and liquidity. None of the Company, J.P. Morgan Cazenove or Standard Bank undertake any obligation publicly to release the results of any revisions or up-dates to any forward-looking statements in this presentation that may occur due to any change in its expectations or to reflect events or circumstances after the date of this presentation. Subject to certain exceptions, neither this presentation nor any copy of it may be taken or transmitted into the United States, its territories or possessions or distributed, directly or indirectly, in or into the United States, its territories or possessions. Neither this presentation nor any copy of it may be taken or transmitted into any other jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction or to any securities analyst or other person in any of those jurisdictions. Any failure to comply with this restriction may constitute a violation of United States or other applicable securities law. The distribution of this presentation in other jurisdictions may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. This presentation does not constitute or form a part of any offer or solicitation to purchase or subscribe for securities in the United States. The securities referred to herein have not been and will not be registered under the US Securities Act of 1933 (the Securities Act ), and may not be offered or sold in the United States absent an exemption from, or in a transaction not subject to the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. There will be no public offer of any securities of Heritage in the United States. The securities referred to herein have not been and will not be registered under the applicable securities laws of any other restricted jurisdiction and, subject to certain exceptions, may not be offered or sold within any jurisdiction where to do so would constitute a violation of the relevant laws or to any national, resident or citizen of such jurisdiction. This presentation constitutes an advertisement within the meaning of the Prospectus Rules of the FSA and is not a prospectus and has been prepared solely in connection with the proposed Divestment. Copies of certain corporate documents relating to certain matters discussed herein are/will be available from the Company s registered office and from 34 Park Street, London, W1K 2JD and are/will be available for viewing on the Company s website at Important Information This presentation does not constitute an offer to sell, or the solicitation of an offer to buy, exchange, or transfer any securities of Heritage. The value of ordinary shares of Heritage and exchangeable shares of Heritage Oil Corporation exchangeable into ordinary shares of Heritage can go down as well as up and past performance cannot be relied on as a guide to future performance.. 1 1

3 HERITAGE OVERVIEW 2

4 Transformational Growth TSR Versus Peers Since TSX Listing to January 2013, % 10,000 9,000 8,000 Heritage Tullow Oil Premier Oil Soco International Afren Salamander Energy 2P Reserves 1999: 2.5 million barrels 2013: 412 million barrels 7,000 6,000 Production 1999: 367 bopd 2013: 11,583 bopd 5,000 4,000 3,000 Market Capitalisation 1999: US$13 million 2013: US$848 million 2,000 1,000 0 Jan 99 Jan 01 Jan 03 Jan 05 Jan 07 Jan 09 Jan 11 Jan 13 Cash raised from equity markets: US$370m Cash raised through sale of assets: US$2bn Dividend of c.us$500m paid in 2010 Source: Factset and Datastream as of January

5 Ability to Deliver and Provide Substantial Growth OML 30 Acquisition Acquisition of a world class asset providing a step change in production, reserves and cash flow Creates a platform upon which to build within Nigeria Miran Disposal Attractive valuation secured for a development asset with a significant future capital expenditure requirement Proceeds used to partially fund entry into Nigeria and also to continue exploration and development of the existing portfolio Financial Flexibility Strong balance sheet with cash position of $184.1 million as at 31 March 2013 Excess cash led to a debt repayment of $52.5 million in April 2013 Potential to develop and strengthen the portfolio through further acquisitions Value Generation Exceptional record of generating value and monetising assets Raised US$2bn in asset sales with the current management team Strategic Advantage Look to acquire assets that are underdeveloped or overlooked Early mover advantage Technical Skillset Discovered four of the five largest onshore discoveries in sub-saharan Africa (excluding Nigeria) in the last ten years Depth and breadth of industry experience Management of Risk Ability to mitigate risk associated with political and security issues through local partners, on-the-ground experience and engagement with local communities Balanced portfolio of exploration and production assets 4

6 Diversified Portfolio Across Core Areas Production Exploration Malta 100% Area 2 100% Area 7 Well planning ongoing. Russia 95% Zapadno Chumpasskoye Produced 441 bopd in Q Libya Sahara Oil Services 51% equity interest and control of Sahara Oil Services which will provide access to the Libyan oil industry. Pakistan 54% Sanjawi Block 48% Zamzama North Block Interpretation of existing seismic has identified several prospects and leads. Nigeria OML 30 Major interest in OML 30 through Shoreline Natural Resources. Gross production for 2013 expected to average 35,000 bopd. Tanzania 100% Rukwa North Basin 100% Rukwa South Basin 100% Kyela 29.9% Latham Work programmes on Rukwa and Kyela have commenced. 2D seismic acquisition on Rukwa has been completed and processed. Kyela gravity and seismic data confirms prospectivity. Infill 2D seismic and micro seep study to commence H Papua New Guinea 80% PPL % PRL 13 2D seismic programme recently completed over Tuyuwopi structure. Planning has commenced for a well in

7 Heritage Relative to Peer Group 2P Reserves, MMboe Market Capitalisation, US$ million ,000 4,000 16, ,000 2,000 2,849 2,157 1, , E Production, 000 boed FV/2P Reserves, US$/boe Source: Factset as of June 2013, company reports, and Woodmac for Soco and Salamander Energy 2013E production estimates 6

8 OML 30 DRIVING GROWTH 7

9 Nigeria, OML 30 45% interest in OML 30 1 acquired by Shoreline Natural Resources ( Shoreline ) 2 Onshore Nigeria, located less than 50 kilometres east of Warri Lease covers 1,097 square kilometres with eight producing fields; Afiesere, Eriemu, Evwreni, Kokori, Oroni, Oweh, Olomoro-Oleh, Uzere West 850,000 bpd pipeline to export terminal Gross average production of c.35,000 bopd expected for the full year 2013 with the potential to significantly increase to c.100,000 bopd in the medium term and c.300,000 bopd in the long term, according to RPS evaluation ¹ OML 30 is 55% owned by Nigerian Petroleum Development Corporation ( NPDC ) 2 Shoreline equity split is 45% Heritage, 55% Shoreline Power Company 8

10 OML 30 - A Transformational Acquisition Completed in November 2012, 45% interest in OML 30, located onshore Nigeria, acquired by Shoreline Acquisition of world class asset Since the acquisition, production has been as high as 42,825 bopd Revenues since acquisition of $234.5 million have been generated Largest upstream asset transaction in sub-saharan Africa on a 2P basis 1 Step change in production and reserves Step change in net production to Heritage, increasing from 605 bopd in Q to 7,373 bopd in Q P crude reserves net to Heritage increase from 65 MMbbls to 412 MMbbls Combining Nigerian relationships with technical expertise Exposure to Nigeria Diversification in core areas Local partner Shoreline Power is an indigenous pan-african energy and infrastructure business with an existing network of strong and respected relationships within Nigeria Heritage has a strong technical team with relevant geographic experience Proved reserves of 37.2 Bbbls 2, the largest in sub-saharan Africa, 2 nd largest in Africa and 10 th largest in the world Largest African producer with 2.5 MMbbls per day, with well-established infrastructure from over 50 years of oil production Balancing exploration with production, within core geographic areas Oil focused producing lease 1 Herold, based on publicly sourced data 2 BP Statistical Review

11 Recent Divestments US$ per 2P Reserves of Precedent Transactions Average of precedents OML 30 OML OML 40 OML 42 OML 26 OML 4, 38, 41 OML 30 Post-tax Valuation Net to Heritage Base Income Tax Scenario 1 ($million) Alternative Income Tax Scenario 2 ($million) Post tax NPV (10%) Post tax NPV (10%) Proved Reserves (1P) 1,189 1,410 Proved & Probable Reserves (2P) Proved & Probable & Possible Reserves (3P) 2,162 2,652 3,129 3,820 OML 30 is one of a number of licences that have been divested in the Niger Delta recently OML 30 has been referred to as the premier asset due to location, reserves, current production, availability of facilities and proved development capability Attractive acquisition cost of US$1.7/2P reserves versus average of US$5.9 for precedent transactions Significant discount compared to similar recent onshore transactions in Nigeria ¹ Based on 2P reserves at announcement. No 2P case published for OML 42, RPS mid-case used as proxy 10

12 Mbopd Wells per Year Cumulative Wells OML 30 The Opportunity Historical Drilling 30 Wells Drilled Annually Cumulative Wells Over 200 wells have been drilled on the licence since 1961 with most drilling completed prior to 1992 All wells are producers as the reservoirs are underlain by a strong aquifer Historical Oil Production, 000 bopd Sporadic drilling as the licence was not considered core and therefore over-looked and under developed Production from the licence commenced in 1963 and peaked in 1971 at c. 280,000 bopd Over the period 2006 to 2009 production was severely impacted by both security and funding issues These issues are less relevant for Shoreline and will make it easier to bring production back on

13 Positioning Shoreline within Nigeria s Indigenous Oil Sector 2P Reserves, MMbbls 2012 Production, bopd ,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Nigeria s indigenous oil sector is being strengthened by asset divestments from IOCs over the past 3 years Shoreline s acquisition of OML 30 positions it as one of the largest indigenous oil companies in Nigeria Establishes Shoreline with critical mass of reserves and production to be leading player in the Nigerian oil sector 12

14 The Opportunity in Nigeria Large, well defined hydrocarbon base Large, prolific delta system of c. 300,000 square kilometres with very good reservoir quality (high porosities and permeabilities) First discovery made in 1956 with production commencing two years later, exploration success c. 80% 37.2 Bbbls 1 proven crude reserves, the largest in sub-saharan Africa, the 2nd largest in Africa after Libya and the 10th largest in the world Under-investment in last four decades IOCs focused on large scale projects (>500 MMbbls), offshore assets and other African jurisdictions Periods of shut-in or below capacity production due to security issues and under-investment High reserves/production ratio, production at 2.4MMbbls/day versus 2.0 MMbbls/day first reached 40 years ago Employment creation: in the past five years, over 65,000 direct employment and 250,000 non-direct employment Educated, large workforce positions have been created in the oil industry alone 2 Educated youth: literacy rate for the age group was 78% in 2009, up from 64% in Annual growth rates that average over 7% in official data during the last decade place Nigeria among the fastest growing economies in the world Experiencing the longest period of democratic rule in its history with reforms positively impacting the economy Supportive Government NNPC encouraging indigenisation to ensure optimal production is restored through divestment programmes Federal Government local content and the passage of the Petroleum Industry Bill ( PIB ) will create opportunities and investments in the oil sector and remove fiscal regime uncertainty 1 BP Statistical Review International Labour Office, 2005 statistics 3 National Bureau of Statistics 13

15 Transaction Details and Structure 14

16 Combining Nigerian Relationships with Technical Expertise Acquisition Structure Heritage Oil Plc Financial strength Technical and operational expertise Experienced African operator and investor Buyer US$850m Leading auction Vendors Shoreline Power Local knowledge and expertise (indigenous Nigerian Company) 45% of OML 30 30% 10% 5% Operations throughout Nigeria and West Africa NPDC (Operator) Energy and infrastructure operating expertise 55% 45% Network of contacts in the Nigerian oil and gas community OML 30 Oil mining lease in Nigeria 15

17 Capital Structure Shoreline Shareholder Arrangement & Debt Funding 45% equity interest US$550 million bridge facility 45% OML 30 55% equity interest Shoreline Natural Resources is an indigenous company based on equity split; Shoreline Power holds 55% Economic interest takes into account equity capital funded by each shareholder and profit share Shoreline Power entitled to 2.5% profit share Consideration for Shoreline Power Call Option is 30% of equity funding into Shoreline Natural Resources at time of exercise Equity funding is through shareholder loans Relationship between Heritage and Shoreline Power governed by shareholder agreement Acquisition was funded through 18 month bridge loan facility of US$550 million into Shoreline Natural Resources from Standard Bank Bridge facility has been syndicated to Nigerian banks and China Development Bank Refinancing of the bridge facility by way of a $550 million senior secured revolving reserve based facility is expected to be completed in June

18 The Operating Framework and Relationship Shoreline owns a 45% interest in OML 30, NPDC own 55% and is operator The two companies work under the terms of a Joint Operating Agreement which is typical within industry Additionally, NPDC have solely entered into an agreement with Atlantic Energy, a Nigerian company, to provide financial and technical assistance for their 55% interest. Atlantic Energy provides technical services, preparing drilling plans as an example, supplies any cash shortfalls and is paid from the NPDC 55% share of revenues according to the terms of their agreement Atlantic Energy SHELL OML 30 Operating Staff NPDC Shoreline SUBCOM TECOM OML 30 is managed along the lines of most JOA agreements NPDC and Shoreline have established the OML 30 OPCOM to provide recommendations on programmes, budgets and asset management. OPCOM is composed of equal numbers from the two owners OPCOM decides on items that will be accepted or require further study Studies are carried out under the direction of SUBCOMs. Those studies include all aspects of managing OML 30 SUBCOM recommendations are in turn passed to TECOM for technical approval When approved at OPCOM the issue is presented to NPDC and Shoreline for approval Shoreline sells its 45% of production through a five year marketing contract with Shell and receives funds direct OPCOM OML 30 17

19 The Assets 18

20 The Niger Delta OML 30 lies within the Niger Delta, located in the Gulf of Guinea, one of the most prolific oil and gas provinces in the world From the Eocene to the present, the delta has prograded southwestward, forming depobelts that represent the most active portion of the delta at each stage of its development These depobelts form one of the largest regressive deltas in the world covering approximately 75,000 square kilometres with a source rock thickness of up to 7,000 metres 19

21 OML 30 45% interest in OML 30 1 acquired by Shoreline Onshore Nigeria, located less than 50 kilometres east of Warri, benefits from being on solid high ground Lease covers 1,097 square kilometres with eight producing fields In addition, there is one field not currently in production 850,000 bpd pipeline to export terminal Infrastructure includes ullage to handle three times current production which is sufficient for near and medium term opportunities and the Trans Forcados Pipeline segment which will provide tariff income Gross average production of 35,000 bopd expected for 2013 with the potential to significantly increase to c.100,000 bopd in the medium term and c.300,000 bopd in the long term, according to the RPS evaluation Contains nine flow stations with a combined capacity in excess of c.395,000 bpd Associated gas facilities can handle c.42 mmscf/day collected from six flow stations ¹ OML 30 is 55% owned by Nigerian Petroleum Development Corporation ( NPDC ) 20

22 Summary of Major Fields in OML 30 Major Fields Afiesere Eriemu Evwreni Kokori Olomoro- Oleh Oroni Oweh Uzere West OML 30 Total STOIIP (MMbbls) 897 1, , ,784 Production to date (MMbbls) ,285 Remaining Technical Resource ,120 (MMbbls) 1 Current production (Mbopd) Discovered First Production Number of wells ¹ Based on RPS evaluation. Afiesere and Eriemu combined in RPS s production forecast analysis 21

23 Infrastructure Overview The licence benefits from all infrastructure being in place The licence includes 190 production wells, most are dual string. Injection wells and water injection facilities are unnecessary due to the strong aquifers Well production is collected at one of nine flow stations. The flow stations have the capacity to handle 395,000 bpd, three times current production levels and will handle several years of projected production growth The facilities are robustly designed and constructed and benefit from following a standard design so equipment can be easily replaced The facilities have been maintained by Shell and therefore benefit from their worldwide experience and standards Licence includes ownership of the Trans Forcados Pipeline that transports crude 95 kilometres to the Forcados Terminal 22

24 Trans Forcados Pipeline OML 30 owns and operates the TFP Several other operators currently use the TFP to transport crude to Forcados for dewatering and export. Capacity of the line is 850,000 bpd. Current use is c. 315,000 bpd These operators pay OML 30 a Capacity tariff ranging from $0.11 to $0.87/bbl and a Production charge of $0.17 to $0.44/bbl. The tariffs are based largely on the length of the line that is used OML 30 does not pay a tariff TFP projected tariff revenues total $57.4m. The 2012 actual Opex was $4.4m. Advice received from PWC is that the pipeline revenues will be taxed at a corporate income tax rate of 30% 23

25 Production and Development 24

26 Oil Rate ('000 bopd) Production OML30 Licence Production: to UZRE OWEH ORNI OLOM 50 KOKR EVWR ERMU AFIE OML 30 production since 1 July 2010 to 31 December 2012 is illustrated. Production has been impacted by a manifold issues and strikes by local workers both of which have been resolved Gross Q production from OML 30 averaged 15,800 bopd Production for 2013 expected to average 35,000 bopd gross from OML 30 25

27 Realising Existing Potential and Future Upside Short term Increase production through: Improved gas lift by refurbishing existing system Complete repairs to flow and gas lines and tie-in wells Prevent downtime through improved community relations and share in profits to reduce vandalism Invest in facilities to increase uptime Modernise facility control equipment to increase efficiency Medium term Workover existing shut-in wells to improve completions and to install gas lift in wells without artificial lift Large stock of proved drilling locations determined from 3D seismic Long term Upside potential through focused management of the field and employing techniques such as multiple completions and horizontal drilling Future exploration of deeper targets identified on 3D seismic Future gas prices may lead to developing gas reserves Lease extension past 2019; expected to be renewed thereafter as legislation provides for extension 26

28 Production Profile OML 30 Projected Gross Production, bopd 1 350, , , , , ,000 50, Key developments to drive increase in production; Gas lift Uphole potential and flowline repairs Workovers Further drilling Exploration potential Upsides to the base case include development of the asset s 2.5 TCF of gas and deeper exploration potential ¹ RPS estimates of OML 30 gross Proved plus Probable Reserves (2P) production profile 27

29 Gross CAPEX Projection $700 $600 $500 $400 $300 $200 OML 30 Gross 100% CAPEX (US$m) CAPEX totals $3.5 billion (Gross 100%) US$1.6 billion Net Shoreline Includes drilling of 218 new, primarily horizontal, wells Cost of horizontal well US$15m Drilling commences with first rig in 2014 and then one new rig added every six months Maximum of six rigs peaks at end of 2016 Drilling ramps down in 2020 and ends in 2025 $100 $0 Facilities CAPEX investments, scheduled to be completed during 2013 to 2015 include; compressor maintenance and expansion or refurbishment of the gas lift system - US$67m installation of temporary and custody transfer metering - US$33m modification to the Ughelli Pumping Station to provide water separation and additional facilities modernisation - US$65m flowline repairs for existing wells - US$17m workovers on existing wells to restore production - US$85m 28

30 Netback per Barrel $130 $120 $110 $100 $90 $80 $70 $60 $50 $40 $30 $20 $10 OML 30 Net Back $115.00/bbl $23.00 $1.70 $7.00 $5.00 $51.35 $26.75 Shoreline s per barrel netback is US$26.75 The calculation follows the current fiscal assumptions Royalty levied at a rate of 20% oil Education Tax, levied as 2% * (revenue - royalty - Opex) NDDC levy, levied as 3% * (total Capex + total Opex) Annual licence rental payable at the rate of MOD US$1.1million Petroleum Investment Allowance, 5% of annual tangible Capex Income tax scenario Oil Base Case, 65.75% for 5 years and 85% thereafter Alternate case 65.75% for 5 years and 70% - 80% thereafter Assumptions could change with new PIB regulations Capex intangible/tangible split of approximately 30%/70% - depreciation 20% in years 1 to 4 and 19% in fifth year Forcados crude receives c.3% premium to Brent $0 Royalty Education Tax Capex BARREL Net Back NDDC Levy Opex Petroleum Profits Tax 29

31 The Work Programme Exploration of Deeper Targets Prospect Oil MMbbls Condensate MMbbls In Place Volumes Gas MMboe Total MMboe Uzere SP , Oroni DP Oweh DP Omogon Bik B To date the extensive seismic information base has identified many prospects and leads Development of the shallower producing reservoirs will provide opportunities to drill deeper and explore structures that have not yet been penetrated As an example, the Omogon prospect, located southeast of Kokori, is illustrated below: Eriemu N Oweh NW ODHE Lyede Ofum E Urhure Isoko W Oroni E Ekiugbo Ekiugbo N Olomoro N TOTAL ,505 1,485 30

32 REMAINING ASSETS 31

33 Russia Production 95% equity interest in Zapadno Chumpasskoye Licence 1 Licence located in Western Siberia (region accounts for >60% of Russia s oil production) Production in Q averaged 441 bopd RPS certified 65 mmboe and $336 million NPV10 Work in 2009/10 included installation of artificial lift and commencement of water injection FDP approved by the Central Committee on Resource Development (TSKR) at end of December 2009 Infrastructure development includes tie-in to Transneft export pipeline Successful completion of a horizontal well in August 2011 The horizontal well is the first such well drilled in the immediate area and presents a more effective and efficient method to develop the field Based on the excellent horizontal drilling results, further horizontal wells are planned ¹ Acquired 95% ownership stake in Russian company ChumpassNefteDobycha Limited, 100% owner of the licence 32

34 Tanzania Exploration Awarded Rukwa PSA in November 2011 and Kyela PSA in January 2012 Operations have commenced and the initial work programme comprises; Rukwa - 2,300 kilometres of legacy 2D seismic data reprocessed. Acquisition and processing of an additional 600 kilometres of 2D seismic data to infill this legacy data has completed. Initial studies are encouraging and drilling studies have started with a view to commencing drilling in 2014 Kyela - full tensor gravity survey acquired, which has now been interpreted, In conjunction with 100 kilometres of new 2D seismic data. The presence of tilted fault blocks and structural features has been confirmed Heritage considers these blocks as sharing geological similarities with the Albert Basin of Uganda where the Company had considerable exploration success Rukwa North 10,175 sq km 100%, operator Rukwa South 8,745 sq km 100%, operator Kyela 1,934 sq km 100%, operator Latham 1,2 5,056 sq km 29.9%, operator The offshore Latham block is on trend with the recent major deep-water gas discoveries in Tanzania waters. Clear gas indicators are present within the block 1 Petrodel 70.1% 2 All expenditures relating to Latham have been written-off following a technical review in

35 Papua New Guinea Exploration Two licences, Petroleum Prospecting Licence No:319 ( PPL 319 ) and Petroleum Retention Licence No:13 ( PRL 13 ), have gross areas of approximately 2,025 and 160 square kilometres respectively Heritage will earn an 80% working interest in each licence and be appointed operator The licences are located in a known hydrocarbon bearing region that includes the multi-tcf Triceratops and Elk/Antelope discoveries The licences are close to current and under-construction infrastructure with the Kutubu oil export pipeline and the PNG Liquefied Natural Gas pipeline crossing the acreage The licences also benefit from the Kikori River providing a link to the open sea thereby increasing transport options. The work programme has begun with the acquisition of 62 kilometres of seismic over the Tuyuwopi structure. This has confirmed a drilling location and plans are underway to drill a well in early Seismic acquisition over the remaining leads identified is expected to resume after the rainy season in Q Heritage management believe there is additional exploration potential within both of the licences 34

36 Libya Strategically Well Placed Exploration Heritage established a base in Benghazi in April 2011 Extremely well placed to benefit in the future development of the oil industry in Libya Heritage Oil acquired a 51% equity interest and control of Sahara Oil Services Holdings Limited ( Sahara Oil ), an established oil field service provider Sahara Oil owns the entire share capital of Sahara Oil Services Limited ( Sahara ) Sahara has the necessary long term permits and licences to provide onshore and offshore oil field services in Libya as well as the rights to own and operate oil and gas licences Through this acquisition Heritage is exploring ways to gain access to key producing fields and other licence opportunities in Libya 35

37 Malta Exploration Heritage Oil 100% working interest and operator Two areas; c.18,000 sq km Structures identified on Areas 2 & 7 could be analogous to the giant Bouri Field where IHS estimate reserves of 630 MMbbls and in excess of 8 TCF of gas Number of producing fields offshore Libya and Tunisia Oil and gas shows close to Area 7 Water depths of metres 1,023 kilometres of legacy 2D seismic reprocessed 1,400 kilometres of 2D seismic acquired processed and interpreted High-impact exploration well planned which will target approximately 500 mmboe. Well planning ongoing 36

38 SUMMARY AND OUTLOOK 37

39 Summary Corporate Highlights Total revenues of $236.2 million in Q ($2.3 million, Q1 2012) Production for Q net to Heritage averaged 7,373 bopd (605 bopd, Q1 2012), gross production has returned to 35,000 bopd 2013 gross production from OML 30 expected to average 35,000 bopd Cash position of $184.1 million as at 31 March 2013, excluding monies related to the Ugandan Tax dispute of approximately $405 million and $101 million used as part security in OML 30 financing Operational Highlights Catalysts Expanded the portfolio with the farm in to two licences in Papua New Guinea Acquisition of 2D seismic across the Tuyuwopi structure in PPL 319 has completed and a drilling location identified Active work programme across licences in Tanzania have continued with encouraging results from newly acquired 2D seismic data More regular newsflow to be expected from OML 30, Nigeria, where production is expected to increase Step Change in Production, bopd 12,000 10,000 8,000 6,000 4,000 2,000 0 Heritage pre acquisition Entry into Nigeria OML 30 Acquisition of a world class asset Heritage post acquisition Combines Shoreline Power s local knowledge and relationships with Heritage s technical expertise Provides a step change in production, reserves and cash flow Initial exploration programmes in Tanzania and PNG ongoing with drilling expected to commence in 2014 Potential for developing and strengthening the portfolio further through acquisitions 38

40 APPENDICES 39

41 Appendices Heritage Oil Plc Board Shoreline Natural Resources Board CSR Contact Details 40

42 Heritage Oil Plc Board Anthony Buckingham CEO, Director Active oil sector businessman since 1970s; founded Heritage in 1992 Former advisor to Premier Oil (introduced them to Pakistan) Sonangol and Ranger Oil; architect behind Sonangol E&P Paul Atherton CFO, Director Chartered accountant, degree in geology, corporate finance background Joined Heritage in 2000 Michael Hibberd Chairman, Non-Executive Director Extensive background in international energy, planning & capital markets. Former Director of Scotia McLeod On the board of a number of public and private companies Joined Heritage in 2006 General Sir Michael Wilkes Non-Executive Director, Senior Independent Director Retired from the British Army as the most senior administrative officer Chairman and non-executive director of a number of public and private companies Joined Heritage in March

43 Heritage Oil Plc Board (cont d) Gregory Turnbull Non-Executive Director Regional Managing Partner of McCarthy Tétrault LLP Extensive knowledge of corporate governance issues and has acted for many boards of directors Joined Heritage in 1996 John McLeod Non-Executive Director Professional engineer with over 36 years of varied resources extraction experience Joined Heritage in 1996 Carmen Rodriguez Non-Executive Director Recently held the position of Chairperson and CEO ( ) of Sociedad Estatal Espanola P4R, S.A., a Spanish owned consultancy firm specialising in foreign trade, investment and co-operation Joined Heritage in March 2012 Colonel Mark Erwin (Retd.) Non-Executive Director Mr. Erwin served in the United States Army for over 25 years culminating his career as the Chief of Staff of the United States Army Special Operations Command Joined Heritage in May

44 Shoreline Board Dr Ladi Bada CEO Dr. Bada has been working in the Nigerian oil and gas sector for the last 14 years with 10 of those years in directorial roles He is presently a director in Linetrale Oil and a consultant to Oriental Energy Paul Atherton CFO Chartered accountant, degree in geology, corporate finance background Joined Heritage in 2000 Kola Karim Chairman Group CEO and Managing Director of Shoreline Energy and Shoreline Power Mr. Karim holds an MBA from the University of Leicester and degree in Business Management from City University. He is also an alumni member of the Harvard Business School for the Executive Management Programme and the Harvard Kennedy School for the Leadership and Public Policy programme. He was awarded Young Global Leader Award in 2008 Tunde Karim Mr. Karim also serves on the board of Shoreline Energy, April Travels Ltd, Nigerian Ropes Plc, Fortis Construction Co. Ltd Shoreline Electrical Systems Ltd, L.D Alberto Company Ltd and Askar Paints Ltd Mr. Karim is a member of the Institute of Directors Nigeria and holds a degree in Biochemical Engineering from University College of Wales, U.K 43

45 Shoreline Board (cont d) Philip Blows Mr. Blows is a chartered accountant and has been an adviser to Heritage for 20 years Holds a degree in Business Law 44

46 CSR is a Key Component of Enhancing Performance Heritage Approach to CSR Engage and work with stakeholders towards a shared future and to be viewed as a partner of choice Committed to a programme of proactive engagement to create lasting legacies for local communities CSR policy framework is integrated in our business model, setting out our essential core values Strong track record for health and safety Employment of local personnel Maximise local content of all contracts Devise and maintain systems Communicate and report to stakeholders Set policies Measure and monitor performance Heritage Approach in Nigeria Shoreline is structured as an indigenous company to incentivise local support Profit share to support local communities and implement long-term sustainable development initiatives Over 50 communities in the lease area Internationally recognised environmental agency commissioned to review the lease No identified legacy issues for Shoreline OML 30 operational staff will be drawn from local communities Growth in production will result in growth in employment Apply stakeholder feedback Advisory Group Group already established Consists of senior leaders from local communities Regular dialogue with local communities Focusing on education and healthcare 45

47 Contact Details Heritage Oil Plc Tony Buckingham / Paul Atherton Tel: +44 (0) Investor Relations Heritage Oil Plc Tanya Clarke Tel: +44 (0) info@heritageoilplc.com ir@heritageoilplc.com Website: Media Enquiries Ben Brewerton / Natalia Erikssen Canada Cathy Hume / Jeanny So Tel: +44 (0) heritageoil.sc@fticonsulting.com Tel: x231 / x225 cathy@chfir.com / jeanny@chfir.com Stock symbols London HOIL HOX (Exchangeable) Toronto HOC (Exchangeable) 46