Heritage sells off Ugandan assets to Eni
HERITAGE OIL, the exploration group, confirmed plans to sell off its Ugandan interests to Italian rival Eni for $1.5bn (£903.2m) yesterday, leaving it free to pull out of an increasingly unattractive Kurdish tie-up.
It will sell its 50 per cent stake in two Ugandan oil fields for $1.35bn cash, with a deferred payment of $150m, rather than merging with Turkish group Genel.
Paul Atherton, chief financial officer at Heritage, said the money raised would be used to develop its existing assets, make acquisitions, and could also go towards funding a special dividend of 75-100p per share.
“We’ll have a billion dollars in cash so we’ve certainly got the financial resources to undertake some very large transactions,” he said.
The deal will need to be approved by Ugandan authorities, but should be completed by 2010.
The deal spells the end for a long-awaited tie-up between Turkish rival Genel and Heritage, which could have seen it move into the FTSE 100.
Political disputes in Iraq and a lack of progress on large finds Heritage made in the semi-autonomous Kurdish region of Iraq earlier this year had also weighed on the group.
Analysts welcomed the sale’s strategic sense, saying the Ugandan fields sold by Heritage are about to enter a complex development stage, which would be better managed by a big oil company.
However, the agreed price was below most valuations of the fields, which had been at around $2bn.