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17

Heritage Oil in Preliminary Takeover Talks

Heritage Oil Ltd, a UK-based oil explorer has said it was in talks which could lead to a takeover bid for the company

Heritage Oil Ltd, a UK-based oil explorer has said it was in talks which could lead to a takeover bid for the company, which has a market value of around $1 billion.

Responding to a sharp rise in its shares, Heritage said in a statement on Thursday it was in “highly preliminary discussions” about the sale of certain assets and that the talks could lead to an offer for the company.

Heritage, which has oil and gas operations in Africa, the Middle East and Russia, did not disclose the name of any potential buyer, nor the assets it is considering disposing of.

"These discussions may or may not ultimately lead to an offer for the company," Heritage said in a statement.
Heritage's London-listed shares closed up 17.7 percent at 240 pence.

Analysts said Heritage's main assets were its licences in Uganda, where project partner Tullow Oil has said the basin around Lake Albert could contain over 1 billion barrels of oil.

Tullow has repeatedly denied interest in bidding for Heritage and on Thursday an industry source familiar with the company's thinking said it was not Heritage's potential suitor.

Industry executives said a large international oil company such as Italy's Eni SpA, which has been snapping up assets across Africa, or an Asian state oil company were more likely bidders.

A spokeswoman for Eni said the company did not comment on takeover speculation.

There are any number of majors and companies out there looking for large reserve bases or large resource bases," analyst Toby Pierce at brokerage Tristone said.

Heritage, which has its roots in Angola, was founded by Briton Anthony Buckingham, who owns around 33 percent of the company.

After Unita rebels overran one of its Angolan oilfields, Buckingham and partners including Simon Mann, who is serving 34 years for a failed coup plot in Equatorial Guinea, founded military contractors Executive Outcomes to retake the field, according the prospectus for Heritage Oil's IPO earlier this year.

Buckingham was also a principal of another military contractor, Sandline International, but the prospectus said he has had no involvement with any military or security operations since the spring of 1998.

Author: Jo Amey