LONDON, UNITED KINGDOM--(Marketwire - Aug. 6, 2012) -

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES OR ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION. THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS. THE SECURITIES REFERRED TO HEREIN ARE HIGHLY SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK AND SHOULD NOT BE PURCHASED BY PERSONS WHO CANNOT AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. A CIRCULAR AND PROSPECTUS WILL BE PUBLISHED BY THE COMPANY TODAY IN CONNECTION WITH THE PROPOSED ACQUISITION AND RIGHTS ISSUE. FOLLOWING PUBLICATION, COPIES OF THE CIRCULAR AND PROSPECTUS WILL BE AVAILABLE FROM THE COMPANY'S REGISTERED OFFICE AND FROM 34 PARK STREET, LONDON, W1K 2JD AND WILL BE AVAILABLE FOR VIEWING ON THE COMPANY'S WEBSITE

On 29 June 2012, Heritage Oil Plc (TSX:HOC)(LSE:HOIL), an independent upstream exploration and production company, announced that Shoreline Natural Resources Limited ("Shoreline"), a special purpose private Nigerian company formed between a subsidiary of Heritage and a local Nigerian partner, Shoreline Power Company Limited ("Shoreline Power"), had reached an agreement to acquire, by way of assignment, a 45% participating interest in a producing oil mining lease in Nigeria ("OML 30"), together with a 45% interest in other assets under the joint operating agreement for OML 30 (the "Acquisition Assets"), for a total cash consideration of US$850 million, net of costs (the "Proposed Acquisition").

The Proposed Acquisition will be financed by a US$550 million secured bridge finance facility, and a fully underwritten rights issue ("Rights Issue") raising proceeds of up to US$370 million (which amount may be reduced by the proceeds of any capital raising which has completed and settled prior to 27 August 2012). Heritage expects to publish a prospectus ("Prospectus") in connection with the Rights Issue today.

Principal Terms of the Rights Issue

The Rights Issue is fully underwritten pursuant to the Rights Issue Underwriting Agreement. The Issue Price at which Qualifying Shareholders will be invited to subscribe for New Ordinary Shares will be determined and announced in advance of the EGM and will be at a discount to TERP within a range of between 40 per cent and 45 per cent, having regard to, among other things, investor feedback, market conditions, any relevant requirements of the Listing Rules and/or Investor Protection Committee Guidelines and the market price of the Company's shares over the five days preceding the determination of the Issue Price. The Issue price is to be announced no later than 7.00 a.m. on 28 August 2012.

The New Ordinary Shares, when issued and fully paid, will rank pari passu in all respects with existing Ordinary Shares, including the right to receive dividends or distributions made, paid or declared (if any) after Admission of such New Ordinary Shares, as described below. Applications will be made to the UKLA for the New Ordinary Shares to be admitted to Listing on the Official List and to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on the Main Market. It is expected that Admission will occur, and that dealings in the New Ordinary Shares on the London Stock Exchange will commence, at 8.00 a.m., London time, on 17 September 2012.

The Rights Issue is conditional upon, amongst other things:

• the passing, without amendment, of the Resolutions that are to be proposed at the EGM;
• the Rights Issue Underwriting Agreement not having been terminated prior to becoming unconditional;
• the Facilities Agreement not having been terminated and none of the conditions precedent to drawdown set out therein having become incapable of satisfaction;
• the Acquisition Agreement not having been amended in any material respect, and not having lapsed or been terminated nor any of the Conditions having become incapable of satisfaction or having been waived prior to Admission; and
• Admission having become effective by no later than 8.00 a.m., London time, on 31 August 2012 (or such later time and/or date as the Company and the Underwriter may agree).

The results of the Rights Issue, including the aggregate number of New Ordinary Shares issued and the aggregate amount raised, net of expenses, is expected to be announced by Heritage to a Regulatory Information Service after 7.00 a.m., London time, on 17 September 2012.

Advance Capital Raisings

Concurrently with the Rights Issue, the Directors are contemplating (i) a potential non pre-emptive placing of Ordinary Shares ("Equity Placing") and (ii) subject to a waiver from the lenders under the Facilities Agreement having been obtained by the Company, a potential issuance of a convertible bond ("Convertible Bond Issue" and together with the Equity Placing, the "Advance Capital Raisings"), or a combination thereof.

If the Directors elect to implement any or both of the Advance Capital Raisings, any such Advance Capital Raising would complete and settle during the period between the date of the Prospectus (6 August 2012) and the announcement of the Issue Price (28 August 2012). Any amounts raised pursuant to any Advance Capital Raisings would reduce the size of the Rights Issue.

Highlights of the Proposed Acquisition

• OML 30, located onshore in the delta in Nigeria, includes eight producing fields and associated infrastructure, including a segment of the 850,000 bpd capacity Trans Forcados pipeline
• The Proposed Acquisition represents a significant opportunity for Heritage to achieve a material change in production and reserves
  • OML 30 is currently averaging gross production of c.35,000 bopd, increasing Heritage's net production from 567 bopd to c.11,320 bopd
  • RPS estimates that OML 30 has gross proved and probable reserves of 1,114 mmbbls of oil
  • In addition, Heritage's Directors estimate 2.5 Tcf gross of gas which has not been included in the RPS review or valuation
  • Net proved and probable reserves increase 568% from 61 mmbbls to 408 mmbbls
  • Potential to ramp up production of OML 30 in the short term by refurbishing and maintaining existing infrastructure
• Cash consideration of US$850 million, net of costs, for Shoreline to purchase a 45% participating interest in OML 30 and related assets under the corresponding joint operating agreement
  • OML 30 is expected to be cash generative immediately following completion of the Proposed Acquisition
• Shoreline will be one of the leading indigenous companies producing in Nigeria
  • Combines Shoreline Power's energy and infrastructure operating expertise and respected network of relationships within Nigeria with Heritage's strong technical team with relevant geographic expertise
  • Shoreline and Heritage will work to develop close relationships with local communities and other stakeholders
• The Proposed Acquisition provides Heritage with exposure to Nigeria, which is reported to contain the second largest proved reserves in Africa, and provides further growth opportunities in a prolific hydrocarbon region
• The Proposed Acquisition will further diversify Heritage's portfolio, balancing exploration with production, while extending Heritage's geographic footprint within its core areas of Africa and the Middle East

Expected Timetable

All times are London times unless specifically stated otherwise.

Restoration of trading

As the Proposed Acquisition is classified as a reverse takeover under the Listing Rules, the listing of the Company's Ordinary Shares and Exchangeable Shares on the Official List of the UK Listing Authority was suspended with effect from Monday 2 July 2012 until sufficient information on the Proposed Acquisition was available to the market. Following approval by the UK Listing Authority of the Circular and Prospectus as expected later today, the Company will request that the listing of its Ordinary Shares and Exchangeable Shares be restored to the Official List and trading in such Shares is expected to resume with effect from the commencement of trading on 7 August 2012.

Tony Buckingham, Chief Executive Officer, commented:

"The Proposed Acquisition is considered to be the largest ever upstream asset transaction in sub-Saharan Africa, based on the licence's proved and probable reserves. The sheer size and valuation of the oil fields, based on the recently issued independent reserves report, and the use of debt to fund a considerable portion of the purchase consideration make this transaction transformational and highly attractive.

"We remain confident of completing the acquisition in the announced timeframe and that we will build Shoreline into one of the leading oil and gas producers in Nigeria."

Analyst Presentation

Mr. Paul Atherton, Chief Financial Officer, will be hosting an analyst presentation at 11.00 a.m. (BST) on 6 August 2012, details of which can be obtained from Stephanie Power at FTI Consulting on 0207 269 7277 or [ stephanie.power@fticonsulting.com ].

Capitalised terms used in this announcement, unless otherwise specified, have the meanings given to them in the Prospectus and the Circular.

Notes to Editors

Shoreline Power

• Shoreline Power is a subsidiary of Shoreline Energy International Limited ("SEI"), a leading private Nigerian energy and infrastructure company. SEI was founded in 1997 and has offices in Lagos, where it has its headquarters, and London.
• SEI has operations across Sub-Saharan Africa and a portfolio of 16 operating companies with over 3,000 employees.
• SEI has interests in the infrastructure, construction, energy, investments and energy trading, and telecommunications sectors.
• Shoreline Power is led by Mr. Kola Karim, who is also the CEO of SEI.
• For further information please refer to [ www.shoreline-power.com ]

Heritage

• Heritage is listed on the Main Market of the London Stock Exchange and is a constituent of the FTSE 250 Index. The trading symbol is HOIL. Heritage has a further listing on the Toronto Stock Exchange (TSX:HOC).

• Heritage is an independent upstream exploration and production company engaged in the exploration for, and the development, production and acquisition of, oil and gas in its core areas of Africa, the Middle East and Russia.

• Heritage has an exploration, appraisal and development asset in the Kurdistan Region of Iraq, exploration assets in Malta, Tanzania, Mali, Pakistan, Libya and the Democratic Republic of Congo and a producing property in Russia.

• For further information please refer to our website, [ http://www.heritageoilplc.com ]

This press release is not for distribution to United States Newswire Services or for dissemination in the United States.

J.P. Morgan Limited, which conducts its UK investment banking business as J.P. Morgan Cazenove and is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting as Sole Financial Adviser to Heritage and for no one else in connection with the Proposed Acquisition only and will not be responsible to anyone other than Heritage for providing the protections afforded to its clients nor for providing advice in relation to the matters set out in this announcement.

J.P. Morgan Securities plc, which conducts its UK investment banking business as J.P. Morgan Cazenove and is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting as Sole Sponsor to Heritage in connection with the matters set out in this announcement, and Joint Global Coordinator, Joint Bookrunner and Underwriter in connection with the Rights Issue and any other capital raising as set out in this announcement to Heritage and for no one else and will not be responsible to anyone other than Heritage for providing the protections afforded to its clients nor for providing advice in relation to the matters set out in this announcement. For the purposes of this announcement, references to "J.P. Morgan Cazenove" are to both J.P. Morgan Limited and/or J.P. Morgan Securities plc, as appropriate.

Standard Bank Plc is authorised and regulated in the United Kingdom by the Financial Services Authority and is entered in the FSA's register (register number 124823). Standard Bank Plc is acting as Joint Global Coordinator and Joint Bookrunner to Heritage and for no one else in connection with the Rights Issue and any other capital raising as set out in this announcement and will not be responsible to anyone other than Heritage for providing the protections afforded to its clients nor for providing advice in relation to the matters set out in this announcement.

Canaccord Genuity Limited is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting as Lead Manager to Heritage and for no one else in connection with the Rights Issue and any other capital raising as set out in this announcement and will not be responsible to anyone other than Heritage for providing the protections afforded to its clients nor for providing advice in relation to the matters set out in this announcement.

If you would prefer to receive press releases via email please contact Jeanny So ([ jeanny@chfir.com ]) and specify "Heritage press releases" in the subject line.

Certain information in this announcement 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. None of the Company, J.P. Morgan Cazenove, Standard Bank Group or Canaccord 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

The participation in the Rights Issue by persons who are not resident in the United Kingdom may be affected by the laws of the relevant jurisdictions. Such persons should inform themselves about and observe any applicable requirements. Further details in relation to overseas shareholders will be contained in the Prospectus.

Any failure to comply with the 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 Acquisition and the Rights Issue disclaim any responsibility or liability for the violation of such restrictions by any person.

This announcement has been prepared for the purposes of complying with English law and the Listing Rules of the United Kingdom Financial Services Authority and information disclosed may not be the same as that which would have been prepared in accordance with the laws of jurisdictions outside England.

Unless otherwise determined by Heritage, and permitted by applicable law and regulation, the shares to be issued in connection with the Rights Issue will not be issued directly to shareholders in and will not be capable of acceptance in or from any jurisdiction where to do so would constitute a breach of securities laws in that jurisdiction. Copies of this announcement 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 announcement (including custodians, nominees and trustees) should observe these restrictions and should not send or distribute this announcement in, into or from any such jurisdictions.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION:

This announcement 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 Proposed Acquisition, 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 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 Acquisition. Forward-looking statements also appear in a number of places in the RPS Report, which reproduces data derived from studies conducted on behalf of the Company relating to its interest in reserves and resources of crude oil and gas in certain of the Company's properties and the reserves and resources of crude oil and gas of OML 30, and contains projections and estimates relating to the Company's current plans regarding volume of crude oil and gas, well development, amount and type of equipment and transportation infrastructure necessary to implement its exploration and production plans and associated timeline and capital and operating expenditures required to purchase or build such equipment and infrastructure. The estimates and projections contained in the RPS Report are based on certain assumptions, which may prove to be incorrect.

Any forward-looking statements in this announcement reflect the Company's view with respect to future events as at the date of this announcement 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, Standard Bank Group or Canaccord undertake any obligation publicly to release the results of any revisions or up-dates to any forward-looking statements in this announcement that may occur due to any change in its expectations or to reflect events or circumstances after the date of this announcement.

Subject to certain exceptions, neither this announcement nor any copy of it may be taken or transmitted into the United States of America, its territories or possessions or distributed, directly or indirectly, in or into the United States of America, its territories or possessions. Neither this announcement 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 announcement 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 announcement 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 announcement constitutes an advertisement within the meaning of the Prospectus Rules of the United Kingdom Financial Services Authority and is not a prospectus and has been prepared solely in connection with the Proposed Acquisition. A prospectus and circular will be published by Heritage today in connection with the Proposed Acquisition. Copies of the Circular and Prospectus will be available from the Company's registered office and from 34 Park Street, London, W1K 2JD and will be available for viewing on the Company's website at [ www.heritageoilplc.com ].

Important Information

This announcement 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 the Heritage Shares can go down as well as up and past performance cannot be relied on as a guide to future performance.

Contributing Sources

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