Heritage Oil – Now everybody is talking about it
It is confirmed, Heritage Oil [HOIL], the UK-listed exploration and production company is to sell its stake in two fields in Uganda’s Lake Albert Rift Basin, to energy giant ENI of Italy.
ENI are to acquire the 50% working interest Heritage holds in two blocks in the Albert Basin, Blocks 1 and 3A, which it shares with Tullow Oil. Under the deal, Heritage will pay a special dividend of between 75 pence and 100 pence per share to investors, according to the Heritage website.
The deal is worth $1.35 billion.
The company also confirm that as a result of entering into the letter of intent (LOI) with Eni, discussions with Genel Energy International Limited (“Genel”) in relation to the proposed acquisition of Genel have been terminated. The deal is expected to complete in the first quarter of 2010. How this news will affect the share price, remains to be seen.
It is thought Heritage would use the proceeds from the Italian deal to further develop its assets in the Kurdish region of Iraq where the company has a 75% stake in the Miran block in Kurdistan.
The deal also means a windfall for Heritage CEO and founder Tony Buckingham, who holds around 33% of Heritage’s stock.
I bought into Heritage Oil early in the summer only to watch it slide for several months. Luckily I topped up on the way down, ever the optimist.
Virgin
Virgin
The current share price just does not reflect the true value of the HOIL. For me it is a term hold always has been. As for this mornings drop in sp, maybe the markets don’t like the way the Genel deal has been scrapped? Who knows?
dave
The price drop could be just profit taking? More likely though the markets do not like the way HOIL came out with the surprise dropping of GENEL. Should of left that news for another day?
Scan
So what’s with the electric false teeth? Are you leaving them to chatter because you are nervous about the fate of Heritage Oil or are they chattering because you are out in the cold not having insulated yourself with enough Heritage Oil shares?
Oh! I just clicked – its not chattering teeth… its “everyone” talking about Heritage Oil – is that why the price has slumped?
Have faith in Tony Buckingham, he has the killer instinct (a legacy of his stint in the SAS perhaps). Or maybe not, he’s said to be a pal of (also ex-SAS) Simon Mann whose own African oil enterprise landed him in a five star prison in Equatorial Guinea – a fate from which Mann’s alleged partner, Mark Thatcher, was saved. Perhaps Buckingham’s lesson is not to be too greedy.