Heritage Oil Jumps Most in 18 Months on Nigerian Tax Accord
Heritage Oil Plc (HOIL) jumped the most in 18 months in London after saying its Nigerian venture “concluded successfully” tax rebate negotiations.
Heritage climbed 14 percent, the biggest gain since Aug. 21, 2012. It closed at 239 pence in London, valuing the company at 664 million pounds ($1.1 billion). It rose the most among companies in London’s FTSE All-Share Oil & Gas Producers Index.
Shoreline Natural Resources Ltd., Heritage’s joint venture in Nigeria, said in November it was in talks with the local tax authorities.
“Shoreline and Heritage are currently quantifying the impact and expect the benefit of this to be recognized in the 2013 year-end results,” Heritage said today in a statement.
The partners are developing the OML 30 license in Nigeria, where production rose 17 percent this year from the fourth quarter. Heritage’s share in the license means it’s getting 15,600 barrels of oil a day, the St. Helier, Jersey-based explorer said today.
It will use the project revenue to “obtain additional interests in Nigeria and in other core areas,” Chief Executive Officer Tony Buckingham said in the statement.
The announcement may reduce Heritage’s 2013 tax liability “that would have eroded year-end cash of about $190 million,” Al Stanton, an Edinburgh-based analyst at RBC Capital Markets, wrote in an e-mailed report.
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