Heritage Oil Shares Surge On Dividend News

2nd Aug 2010 13:58

London (Dow Jones)--Shares in Heritage Oil PLC (HOIL.LN) soared Monday after the company announced the payment of a special 100 pence a share dividend following the sale of the company's Uganda assets to Tullow Oil PLC (TLW.LN). The two companies completed the $1.45 billion deal last week after months of delay caused by an ongoing tax between heritage and Uganda's government. "Heritage was the pioneering oil company in Uganda, and this dividend reflects the value this sale represents for shareholders," CFO Paul Atherton told Dow Jones Newswires. Heritage entered Uganda 13 years ago with an initial $150 million investment. At 1252 GMT, Heritage's shares were up 18 pence, or 4.3%, at 428 pence, outperforming a 2.2% rise in London's oil and gas index. The special dividend is the first the Jersey-based exploration company has paid out, and leaves the company with a war chest of $700 million. The cash will be used to further the company's exploration program, although further acquisitions in the company's core regions of the Middle East and Africa have not been ruled out. "In the next six months the company will embark on its most diversified drilling program ever," said Atherton. The company is drilling in Kurdistan, Malta, Pakistan and Russia and is undertaking seismic tests in Mali, with wells in Mali and Tanzania expected within the next two years. Meanwhile, Heritage is still in talks with the Ugandan government over the tax issue, but progress has been made, said Atherton. As a condition of the sale to Tullow, Heritage deposited $122 million, or 30% of the $405 million Uganda says Heritage owes, with the government. The company placed a further $283 million in an escrow account pending settlement of the dispute. The Ugandan government said last Thursday it would decide within the next two weeks whether to refer the case to international arbitration or to settle the matter in local courts. -By Sarah Kent, Dow Jones Newswires; 4420-7842-9376; [email protected] (END) Dow Jones Newswires August 02, 2010 08:58 ET (12:58 GMT)