LONDON, UNITED KINGDOM--(Marketwire - Nov. 12, 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 OR CIRCULAR. CERTAIN CORPORATE DOCUMENTS RELATING TO CERTAIN MATTERS DISCUSSED HEREIN ARE/WILL BE AVAILABLE FROM THE COMPANY'S REGISTERED OFFICE AND FROM 34 PARK STREET, LONDON, W1K 2JD AND ARE/WILL BE AVAILABLE FOR VIEWING ON THE COMPANY'S WEBSITE.

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.

Further to the announcements made by the Company on 21 August 2012 and 23 August 2012, Heritage Oil Plc (TSX:HOC)(LSE:HOIL), an independent upstream exploration and production company, and its wholly owned subsidiary, Heritage Energy Middle East Limited ("HEME"), announce the proposed divestment of HEME's remaining 49% interest in the production sharing contract relating to the Miran Block (the "Miran PSC") in the Kurdistan Region of Iraq ("Kurdistan") and corresponding interest in the related joint operating agreement (the "Miran JOA") to Genel Energy (Miran) Limited, a wholly owned subsidiary of Genel Energy plc ("Genel") under the terms of a US$294 million exchangeable loan (the "Loan") provided to Heritage by Genel in August 2012, including the sum of cash calls paid by Genel to the operator of the Miran Block on HEME's behalf in respect of its 49% interest (the "Cash Calls"), since 1 July 2012 (the "Divestment"). Completion of the Divestment is subject to approval of the Company's shareholders.

Highlights

• Notice served by Heritage to Genel on 9 November 2012, stating that the Loan repayment is to be satisfied by the proposed Divestment of HEME's 49% interest in the Miran PSC and the Miran JOA (the "Divestment Assets"), reducing Heritage's interest in the Miran Block to nil
• Board of Directors believe that the proposed Divestment is the most advantageous option to repay the Loan due to the attractive valuation secured for a development asset with a very significant future capital expenditure requirement
• The proposed Divestment constitutes a class 1 transaction under the Financial Services Authority's ("FSA") Listing Rules, thereby requiring approval from the Company's shareholders by ordinary resolution prior to completion
• Combined proceeds of US$450 million received from Genel on 22 August 2012, further details of which are contained in the announcements made by the Company on 21 August 2012 and 23 August 2012, were used to partially finance the acquisition of a 45% participating interest in a producing oil mining licence in Nigeria ("OML 30") together with a 45% interest in other assets under the joint operating agreement for OML 30, without need for additional capital raising and without delay to the acquisition process
• Successful completion of the acquisition of OML 30 was announced by the Company on 9 November 2012
• A circular containing information on repayment of the Loan and details on the proposed Divestment, together with a notice to convene an extraordinary general meeting ("EGM"), will be sent to the Company's shareholders in due course

Background

On 22 August 2012, HEME completed the sale of a 26% interest in the Miran PSC and Miran JOA to Genel for cash consideration of US$156 million (the "Initial Sale"). Contemporaneously, the Company and Genel entered into a loan agreement in respect of the Loan (the "Loan Agreement"), as amended by deed on 9 November 2012, whereby Genel agreed to (i) loan Heritage US$294 million at an interest rate of 8% (subject to adjustment) ending on 1 February 2014 (the "Repayment Date") and (ii) pay the Cash Calls. The Loan Agreement states that the full amount of the Loan, plus any interest accrued thereon, must be repaid by Heritage in full on the Repayment Date unless, prior to such date, either of the parties have elected, and Heritage shareholders have given their approval by way of ordinary resolution, to Heritage repaying the Loan by way of a transfer of the Divestment Assets.

On 9 November 2012, Heritage gave notice to Genel of its election to repay the Loan and the Cash Calls, excluding accrued interest, by way of the proposed Divestment, subject to shareholder approval. Following completion of the proposed Divestment, HEME will not hold an interest in the Miran PSC or Miran JOA.

Divestment and rationale

By executing the Loan Agreement contemporaneously with the Initial Sale, the Company received aggregate proceeds of US$450 million and was able to proceed, without delay and without the need for any equity capital raising, with the acquisition of OML 30, which successfully completed and was announced on 9 November 2012.

The proposed Divestment constitutes a class 1 transaction under the FSA's Listing Rules and therefore requires approval by ordinary resolution from the Company's shareholders. A circular including information on the repayment of the Loan and details on the proposed Divestment together with a notice to convene the EGM will be sent to shareholders in due course.

The Board of Directors believe that the proposed Divestment is the most advantageous Loan repayment option and is in the best interests of the Company's shareholders as a whole. The valuation achieved for the Miran PSC and Miran JOA is considered by the Board to be attractive taking into account the stage of development and the very significant future capital expenditure requirements associated with developing the Miran gas field, as described in the independent technical report prepared by RPS Energy Consultants Limited and included in the Company's prospectus published on 6 August 2012.

The Board therefore unanimously recommends that the Company's shareholders vote in favour of the proposed Divestment in order to effect full repayment of the Loan, as each of the Directors intend to do in respect of their own beneficial shareholdings, representing approximately 34.2% of the voting share capital.

Key Conditions of the proposed Divestment

In addition to requiring shareholder approval by ordinary resolution, the proposed Divestment is conditional on: (i) relevant approvals in respect of the proposed Divestment being granted by the Minister of Natural Resources for the Kurdistan Regional Government and the Regional Council for the Oil and Gas Affairs of Kurdistan; (ii) the execution of an amendment and novation agreement between HEME and Genel Energy (Miran) Limited in respect of the Divestment Assets; and (iii) other customary closing conditions.

Tony Buckingham, Chief Executive Officer, commented:

"The divestment of our remaining 49% interest in Miran will allow Heritage to monetise the asset at an attractive valuation and the total proceeds will have funded a significant part of the completed acquisition of OML 30 in Nigeria. Completion of these transactions will provide Heritage with a balanced portfolio of assets generating cash flow from production which will assist with work programmes on high impact exploration whilst allowing the Company to continue considering further opportunities."

Notes to Editors

• 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 producing assets in Nigeria and Russia, exploration assets in Malta, Tanzania, Pakistan, Libya and the Democratic Republic of Congo and an exploration, appraisal and development asset in Kurdistan (being the Divestment Assets).
• Following completion of the proposed Divestment, HEME will not hold an interest in the Miran Block.
• For further information please refer to our website, [ www.heritageoilplc.com ]

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

Standard Bank is authorised and regulated in the United Kingdom by the FSA, is acting as sole Financial Adviser to Heritage and for no one else in connection with the proposed Divestment 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 Limited, which conducts its UK investment banking business as J.P. Morgan Cazenove and is authorised and regulated in the United Kingdom by the FSA, is acting as sole Sponsor to Heritage in connection with the proposed Divestment 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 such matters or any other matters set out in this announcement. For the purposes of this announcement, references to "J.P. Morgan Cazenove" are to J.P. Morgan Limited.

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. Neither the Company nor J.P. Morgan Cazenove or Standard Bank 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

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

Persons who are not resident in the United Kingdom may be affected by the laws of jurisdictions other than the United Kingdom. Such persons should inform themselves about and observe any applicable requirements of such jurisdictions. Any failure by such persons to comply with any 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 Divestment, J.P. Morgan Cazenove and Standard Bank disclaim any responsibility or liability for the violation of such restrictions by any person.

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 Divestment, Loan, 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 of the proposed Divestment 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 Divestment or the Loan repayment.

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 or Standard Bank Group 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 FSA and is not a prospectus and has been prepared solely in connection with the proposed Divestment. Copies of certain corporate documents relating to certain matters discussed herein are/will be available from the Company's registered office and from 34 Park Street, London, W1K 2JD and are/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 ordinary shares of Heritage and exchangeable shares of Heritage Oil Corporation exchangeable into ordinary shares of Heritage can go down as well as up and past performance cannot be relied on as a guide to future performance.