Capital Markets Day Presentation - Heritage Oil

Heritage Oil Plc
Capital Markets Day, 30 January 2013
January 2013

Disclaimer – Important Notice
Certain information in this presentation 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 presentation 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 presentation 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 presentation (including custodians, nominees and trustees) should observe these restrictions and should not send or distribute this presentation in, into or from any such jurisdictions.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION:
This presentation 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 exercise of the
Shoreline Option, 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 presentation reflect the Company’s view with respect to future events as at the date of this presentation 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 undertake any obligation publicly to release the results of any
revisions or up-dates to any forward-looking statements in this presentation that may occur due to any change in its expectations or to reflect events or circumstances after the date of this presentation.
Subject to certain exceptions, neither this presentation nor any copy of it may be taken or transmitted into the United States, its territories or possessions or distributed, directly or indirectly, in or into the United States, its territories or
possessions. Neither this presentation 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 presentation 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 presentation 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 presentation 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 presentation 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.
.
1
1

PRESENTATION OVERVIEW
2

Capital Markets Morning
Section Presenter Page
Introduction and Overview Paul Atherton 5
OML 30 – Transaction Details and Overview Paul Atherton 19
OML 30 – The Assets, Fields, Infrastructure Steve Kobak 26
OML 30 – Field Development Steve Kobak 43
OML 30 – Environmental and CSR Kola Karim 54
Nigeria Kola Karim 57
Production – Russia Steve Kobak 61
Exploration Brian Smith 64
Summary Paul Atherton 75
3

Biographies
Paul Atherton – CFO, Director
Mr. Atherton is a qualified accountant, having qualified with Deloitte & Touche, and holds a degree in geology from Imperial
College London. He has a corporate finance background with specific experience in the international mining and resource
sectors. He joined Heritage in 2000 and subsequently joined the Board of Directors in 2005.
.
Steve Kobak, VP Production
Mr. Kobak, a qualified engineer, has 27 years of experience in oil and gas production operations, reservoir studies and asset
development. The companies he has worked for include ESSO, Shell International and Khanty Mansiysk Oil Corporation in
Western Siberia where he held senior management positions guiding technical and operations activities. He has extensive
international experience working in Russia, the Far East, Middle East and Canada. Mr. Kobak joined Heritage in 2007.
Brian Smith, VP Exploration
Mr. Smith has 30 years experience in the oil industry. He initially worked as an exploration geologist for Exxon in the North Sea
and Gulf of Mexico. Later he joined Enterprise Oil where he managed various exploration projects in the Far East and Eastern
Europe/FSU. He joined Heritage as Vice President, Exploration in 1997.
Kola Karim, Director Shoreline Natural Resources
Mr. Karim is Group CEO and Managing Director of Shoreline Energy and Shoreline Power. Mr. Karim holds an MBA from the
University of Leicester and degree in Business Management from City University; he is also an alumni member of the Harvard
Business School for the Executive Management Programme and the Harvard Kennedy School for the Leadership and Public
Policy programme. He was awarded Young Global Leader Award in 2008 by the World Economic Forum.
4

HERITAGE OVERVIEW
5

Transformational Growth
TSR Versus Peers Since TSX Listing, %
10,000
9,000
8,000
Heritage Tullow Oil Premier Oil Soco International Afren Salamander Energy
2P Reserves
1999: 2.5 million barrels
2013: 412 million barrels
7,000
6,000
Production
1999: 367 bopd
2013: 11,583 bopd
5,000
4,000
3,000
Market Capitalisation
1999: US$13 million
2013: US$848 million
2,000
1,000
0
Jan 99 Jan 01 Jan 03 Jan 05 Jan 07 Jan 09 Jan 11 Jan 13
Cash raised from equity
markets: US$370m
Cash raised through sale
of assets: US$2bn
Dividend of c.US$500m
paid in 2010
Source: Factset and Datastream as of 25 January 2013
6

Ability to Deliver and Provide Substantial Growth
Completion of OML 30 Acquisition
•Acquisition of a world class asset providing a step change in production, reserves and cash
flow
•Creates a platform upon which to build within Nigeria
Completion of Miran Disposal
•Attractive valuation secured for a development asset with a significant future capital
expenditure requirement
•Proceeds used to partially fund entry into Nigeria and also to continue exploration and
development of the existing portfolio
Financial Flexibility
•Strong balance sheet
•Potential to develop and strengthen the portfolio through further acquisitions
Value Generation
•Exceptional record of generating value and monetising assets
•Raised US$2bn in asset sales with the current management team
Strategic Advantage
•Look to acquire assets that are underdeveloped or overlooked
•Early mover advantage
Technical Skillset
•Discovered four of the five largest onshore discoveries in Sub-Saharan Africa (excluding
Nigeria) in the last ten years
•Depth and breadth of industry experience
Management of Risk
•Ability to mitigate risk associated with political and security issues through local partners,
on-the-ground experience and engagement with local communities
•Balanced portfolio of exploration and production assets
7

Diversified Portfolio Across Core Areas
Production
Exploration
Malta
100% Area 2
100% Area 7
• Well planning ongoing.
Russia
95% Zapadno
Chumpasskoye
• Produced c.617 bopd in Q3
2012.
Libya
Sahara Oil Services
• 51% equity interest and control
of Sahara Oil Services which
will provide access to the
Libyan oil industry.
Nigeria
OML 30
• Major interest in OML 30
through Shoreline Natural
Resources. Produced gross
c.35,7oo bopd in November
2012.
Tanzania
29.9% Latham
100% Rukwa North Basin
100% Rukwa South Basin
100% Kyela
• Work programmes on Rukwa
and Kyela have commenced.
• Rukwa legacy 2D seismic has
been processed and additional
seismic is being acquired.
• Kyela gravity survey has been
interpreted and seismic
acquisition has completed.
Pakistan
54% Sanjawi Block
48% Zamzama North Block
• Initial interpretation of
existing seismic has identified
several prospects and leads.
8

Heritage Relative to Peer Group
2P Reserves, mmboe
Market Capitalisation, US$ million
16,966
500
5,000
412
400
380
4,000
2013E Production, kbpoed
300
296
3,133
3,000
2,458
200
185
130
2,000
100
75
62
1,000
0
0
FV/2P Reserves, US$/boe
2,009
848 773
399
100
89
50
46.5
75
67
40
50
25
44
21
16 14 12
30
20
10
16.4
14.1 13.4
11.4
3.4 2.3
0
0
Source: Factset as of 25 January 2013, company reports, and Woodmac for Soco and Salamander Energy 2013E production estimates
9

OML 30 – DRIVING GROWTH
10

Nigeria, OML 30
• 45% interest in OML 30 1 acquired by
Shoreline Natural Resources
(“Shoreline”) 2
• Onshore Nigeria, located less than
50 kilometres east of Warri
• Lease covers 1,097 square kilometres
with eight producing fields; Afiesere,
Eriemu, Evwreni, Kokori, Oroni,
Oweh, Olomoro-Oleh, Uzere West
• 850,000 bpd pipeline to export
terminal
• Gross production of c.35,700 bopd
reported for November 2012 with
the potential to significantly increase
to c.100,000 bopd in the medium
term and c.300,000 bopd in the long
term, according to RPS evaluation
¹ OML 30 is 55% owned by Nigerian Petroleum Development Corporation (“NPDC”)
2
Shoreline equity split is 45% Heritage, 55% Shoreline Power Company
11

OML 30 - A Transformational Acquisition
Acquisition of world
class asset
• Completed in November 2012, 45% interest in OML 30, located onshore Nigeria, acquired by Shoreline
• Gross production c.35,700 bopd reported for November 2012
• Largest ever upstream asset transaction in sub-Saharan Africa on a 2P basis 1
Step change in
production and
reserves
• Step change in net production to Heritage, increasing from 617 bopd in Q3 2012 to c.11,350 bopd year end exit rate
• 2P crude reserves net to Heritage increase from 65 mmbbls to 412 mmbbls
Combining Nigerian
relationships with
technical expertise
Exposure to Nigeria
Diversification in
core areas
• Local partner Shoreline Power is an indigenous pan-African energy and infrastructure business with an existing
network of strong and respected relationships within Nigeria
• Heritage has a strong technical team with relevant geographic experience
• Proved reserves of 37.2 bn bbls 2 , the largest in sub-Saharan Africa, 2 nd largest in Africa and 10 th largest in the world
• Largest African producer with 2.5 mmbbls per day, with well-established infrastructure from over 50 years of oil
production
• Balancing exploration with production, within core geographic areas
• Oil focused producing lease
1
Herold, based on publicly sourced data
2
BP Statistical Review 2012
12

Acquisition Provides A Step Change in Production and Reserves
Net Production, bopd
12,000
Net Reserves, mmbbls
450
10,000
8,000
300
6,000
4,000
150
2,000
0
Heritage pre
acquisition
OML 30
Heritage post
acquisition
0
Heritage pre
acquisition
OML 30
Heritage post
acquisition
• Production:
• 2013 average 45,000 bopd gross from OML 30, net to Heritage 2013 production is expected to be 14,300 bopd
• 2014 average 70,000 bopd gross from OML 30, net to Heritage 2014 production is expected to be 22,000 bopd
• Reserves
• OML 30 gross 2P reserves of 1,114 million barrels
• 2P crude reserves net to Heritage increase from 65 mmbbls to 412 mmbbls
13

Positioning Shoreline within Nigeria’s Indigenous Oil Sector
2P Reserves, mmbbls
600
500
400
300
200
100
0
Latest Reported Production, bopd
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
• Nigeria’s indigenous oil sector is being strengthened by asset divestments from IOCs over the past 3 years
• Shoreline’s acquisition of OML 30 positions it as one of the largest indigenous oil companies in Nigeria
• Establishes Shoreline with critical mass of reserves and production to be leading player in the Nigerian oil sector
• Creates reputable platform with execution experience for potential future transactions
14

Recent Divestments
• OML 30 is one of a
number of licences
that have been
divested in the
Niger Delta
recently
• OML 30 has been
referred to as the
premier asset due
to location,
reserves, current
production,
availability of
facilities and
proved
development
capability
15

Attractive Acquisition Metrics
US$ per 2P Reserves of Precedent Transactions 1
10
8
6
4
2
0
FV/2P Comparison with Selected Peers, US$/boe
50
40
30
20
10
0
OML 30 OML 60 -
63
46.5
16.4
Average of precedents
OML 40 OML 42 OML 26 OML 4, 38,
41
14.1 13.4
11.4
OML 30 acquisition
multiple
3.4 2.3 1.7
• Attractive acquisition cost of US$1.7/2P reserves versus average
of US$5.9 for precedent transactions
• Significant discount compared to similar recent onshore
transactions in Nigeria
• Long-life asset with 2P reserve life of 87 years at current
production of c. 35,000 bopd
• OML 30 immediately cash generative upon completion
• Comparable transactions based on onshore Nigeria assets sold
during last 3 years by IOCs:
• Oando acquisition of OML 60-63 announced December
2012 (yet to be completed)
• Eland acquisition of OML 40 announced August 2012
• Neconde acquisition of OML 42 announced April 2011
• Afren/FHN acquisition of OML 26 announced October
2010
• Maurel & Prom/Seplat acquisition of OMLs 4, 38 and 41
announced January 2010
¹ Based on 2P reserves at announcement. No “2P case” published for OML 42, RPS “mid-case” used as proxy
Note: FV calculated based on market capitalisation from Factset as of 25 January 2013 and net debt from latest company filing
16

kBopd
Wells per Year
Cumulative Wells
OML 30 – The Opportunity
Historical Drilling
30
Wells Drilled Annually
Cumulative Wells
25
300
250
• Over 200 wells have been drilled on the licence since 1961 with
most drilling completed prior to 1992
• All wells are producers as the reservoirs are underlain by a strong
aquifer
20
15
10
5
0
Historical Oil Production, ‘000 bopd
300
250
200
200
150
100
50
0
• Sporadic drilling as the licence was not considered core and
therefore over-looked and under developed
• Production from the licence commenced in 1963 and peaked in
1971 at c. 280,000 bopd
• Over the period 2006 to 2009 production was severely impacted
by both security and funding issues
• These issues are less relevant for Shoreline and will make it easier
to bring production back on
• Production of c.35,700 bopd as at November 2012
150
100
50
0
17

OML 30 - Independent Evaluation
OML 30 Summary of Reserves
Gross
Remaining Reserves
Gross of
Royalty
Net of
Royalty
Heritage Group
Net Entitlement
Reserves
Gross of
Royalty
Net of
Royalty
(mmstb) (mmstb) (mmstb) (mmstb)
Proved Reserves (1P) 538 430 168 134
• Independent evaluation of OML 30 and Heritage’s existing assets
• 2P valuation range of US$2.2 to US$2.7 billion at 10% discount
rate
• RPS report does not factor in additional upside from gas reserves,
remaining undeveloped reservoirs and behind pipe reserves in
developed reservoirs where new wells are not expected
Proved & Probable
Reserves (2P)
Proved & Probable &
Possible Reserves (3P)
1,114 891 347 277
1,733 1,387 539 431
OML 30 Post-tax Valuation Net to Heritage
Base Income Tax
Scenario 1
($million)
Alternative Income
Tax Scenario 2
($million)
Post–tax NPV (10%) Post–tax NPV (10%)
Proved Reserves (1P) 1,189 1,410
Proved & Probable
Reserves (2P)
Proved & Probable &
Possible Reserves (3P)
2,162 2,652
3,129 3,820
1
Assumes the income tax applicable under current Nigeria law
2
Assumes the income tax under changes to Nigerian Law which Heritage believes might occur
18

Transaction Details and Structure
19

Combining Nigerian Relationships with Technical Expertise
Acquisition Structure
Heritage Oil
Plc
• Financial
strength
• Technical and
operational
expertise
• Experienced
African
operator and
investor
Buyer
US$850m
Leading auction
Vendors
Shoreline
Power
• Local
knowledge
and expertise
(indigenous Nigerian Company)
45% of OML 30
30%
10% 5%
• Operations
throughout
Nigeria and
West Africa
NPDC (Operator)
• Energy and
infrastructure
operating
expertise
55%
45%
• Network of
contacts in
the Nigerian
oil and gas
community
OML 30
Oil mining lease in Nigeria
20

Capital Structure
Shoreline Shareholder Arrangement & Debt Funding
45% equity interest
US$550
million bridge
facility
45%
OML 30
55% equity interest
• Shoreline Natural Resources is an indigenous
company based on equity split; Shoreline Power
holds 55%
• Economic interest takes into account equity
capital funded by each shareholder and profit
share
• Shoreline Power entitled to 2.5% profit share
• Consideration for Shoreline Power Call Option is
30% of equity funding into Shoreline Natural
Resources at time of exercise
• Equity funding is through shareholder loans
• Relationship between Heritage and Shoreline
Power governed by shareholder agreement
• Acquisition was funded through 18 month
bridge loan facility of US$550 million into
Shoreline Natural Resources from Standard
Bank
• Bridge facility has been syndicated to Nigerian
banks and China Development Bank
• Shoreline Natural Resources currently finalising
options to re-finance the bridge facility with a 5-
year debt instrument
21

The Operating Framework
• Shoreline owns a 45% interest in OML 30, NPDC own 55% and is operator
• The two companies work under the terms of a Joint Operating Agreement which is typical within industry
• Additionally, NPDC have solely entered into an agreement with Atlantic Energy, a Nigerian company, to provide financial and technical
assistance for their 55% interest. Atlantic Energy provides technical services, preparing drilling plans as an example, supplies any cash shortfalls
and is paid from the NPDC 55% share of revenues according to the terms of their agreement
Atlantic
Energy
NPDC
Shoreline
SHELL OML 30
Operating Staff
OML 30
22

The Operating Relationship
SUBCOM
TECOM
OPCOM
Shoreline
NPDC
• OML 30 is managed along the lines of most JOA agreements
• NPDC and Shoreline have established the OML 30 OPCOM to provide
recommendations on programmes, budgets and asset management.
OPCOM is composed of equal numbers from the two owners
• OPCOM decides on items that will be accepted or require further study
• Studies are carried out under the direction of SUBCOMs. Those studies
include all aspects of managing OML 30
• SUBCOM recommendations are in turn passed to TECOM for technical
approval
• When approved at OPCOM the issue is presented to NPDC and
Shoreline for approval
• Shoreline sells its 45% of production through a five year marketing contract
with Shell and receives funds direct
The key to successful management and development of OML 30 is communication, respect and a shared vision
23

Shoreline is an Indigenous Nigerian Company
Shoreline
• Shoreline is 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 are developing close relationships with
local communities and other stakeholders
Corporate Governance
• Shareholder agreement applies corporate governance standards
and ensures management efficiency
• Shareholder agreement covers matters requiring unanimous
approval
• Five directors; two appointed by Heritage
• Advisory board to include senior figures from local stakeholders
• Strong Nigerian profile
Profit-Sharing Agreement
• Shareholder Agreement provides for an economic interest that is
different to the equity interest
• Shoreline Power has exercised the option to acquire a 30%
participating economic interest, for which Heritage will receive
over US$100 million
Operatorship Post-Transaction
• Operatorship is transferring to NPDC, a subsidiary of the state oil
company Nigerian National Petroleum Corporation (“NNPC”)
• Highest quality members of existing Shell Nigeria operating team
will be transferred across
• Shell is providing assistance during the transition period
24

Organogram of Shoreline
Director and CFO
Chief Executive
Officer
Chief Financial
Controller
CEO Assistant
Chief Operating
Officer
Lagos
Organisation
VP Production
London Nigeria
Assets Technical
Organisation
Secretary
Production
Technologist
London Finance
Organisation
Finance
Manager
Technical
Director
Head, Human
Resources
Commercial
Director
Production Engineer
JV
Accountant
Corporate
Accountant
Joint venture
Operations
Accountant
Production
Engineer
Protocol
Specialist
Reservoir Engineer
Accountant
Joint Venture
Accountant
Reservoir
Engineer
IT Specialist (PT)
Facilities Engineer
Joint Venture
Accountant
Pipeline Engineer
Geologist
Facilities
Engineer
Geophysicist
Geologist
Geophysicist
25

The Assets
26

Nigeria, OML 30
• 45% interest in OML 30 1 acquired by
Shoreline
• Onshore Nigeria, located less than 50
kilometres east of Warri, benefits from
being on solid high ground
• Lease covers 1,097 square kilometres with
eight producing fields
• In addition, there is one field not currently
in production
• 850,000 bpd pipeline to export terminal
• Infrastructure includes ullage to handle
three times current production which is
sufficient for near and medium term
opportunities and the Trans Forcados
Pipeline segment which will provide tariff
income
• Gross production of c.35,700 bopd
reported for November 2012 with the
potential to significantly increase to
c.100,000 bopd in the medium term and
c.300,000 bopd in the long term,
according to the RPS evaluation
• Contains nine flow stations with a
combined capacity in excess of c.395,000
bpd
• Associated gas facilities can handle c.42
mmscf/day collected from six flow stations
¹ OML 30 is 55% owned by Nigerian Petroleum Development Corporation (“NPDC”)
27

Geology
28

The Niger Delta
• OML 30 lies within the
Niger Delta, located in
the Gulf of Guinea, one
of the most prolific oil
and gas provinces in the
world
• From the Eocene to the
present, the delta has
prograded southwestward,
forming
depobelts that represent
the most active portion
of the delta at each stage
of its development
• These depobelts form
one of the largest
regressive deltas in the
world covering
approximately 75,000
square kilometres with a
source rock thickness of
up to 7,000 metres
29

The Niger Delta cont’d
• OML 30 fields are deltaic
shallow marine shelf sands
(usually shore face sands) at
intermediate depth level in
growth fault structural setting
• Traps are typically related to
rollover structures or
anticlines of simple fault
complexity
• Progradation in the face of
significant wave reworking
has created sheet-like layers
of shoreface sand with
excellent reservoir quality
• The wave action has created
reservoirs with porosities of
20-30%
• Permeability is typically
greater than 500 mD and up
to 3,000 mD
30

Reservoir Structure and Traps
• The structural
configuration in the
Niger Delta can
generally be
characterized as
simple rollover
structures
• The structure is
associated with
landward dips that are
associated with
structure building
faults located in the
northernmost fault
blocks of the basin
• Structures tend to be
bounded down dip by
another structurebuilding
fault
• OML 30 reservoirs are
typically anticlines
structures. Some are
bound to the north
east by faults
31

Stacked Reservoirs
• The progradation of the Delta coupled with the
sea level changes controlled depositional patterns
and caused facies changes that have resulted in
stacked reservoirs
• Sands with thickness of 10 to 40 metres were
sandwiched between shales that created sealing
caps above reservoirs
• The OML 30 fields each contain up to 40 stacked
reservoirs. The seismic section for the Afiesere
field shown at left contains twenty one such
layers, or stacked reservoirs. The chart illustrates
the reserves associated with those reservoirs
• An alphanumeric system , that is unique to that
field, is used to label the reservoirs. The top
reservoir in Afiesere is the J1000 while the
deepest reservoir is the M8200
• Each layer exhibits different reservoir and
hydrocarbon characteristics
• Reservoirs contain different types of
hydrocarbons ranging from under-saturated oil
to gas-condensate
• OML 30 reservoirs are typically normally or
slightly over-pressured
• The reservoirs are underlain by substantial
aquifers that provide nearly infinite pressure
support
32

The Fields
33

Summary of Major Fields in OML 30
Major Fields Afiesere Eriemu Evwreni Kokori
Olomoro-
Oleh
Oroni
Oweh
Uzere
West
OML 30
Total
STOIIP
(mmbbls)
897 1,003 412 1426 1,592 395 412 647 6,784
Production to
date
(mmbbls)
189 76 52 383 383 40 40 122 1,285
Remaining
Technical
Resource
368 49 170 260 78 65 130 1,120
(mmbbls) 1
Current
production
(kbopd)
7 1 1 6 15 4 1 - 35
Discovered 1966 1961 1967 1960 1962 1965 1964 1963 -
First
Production
1968 1964 1969 1966 1963 1970 1966 1965 -
Number of
wells
41 20 14 40 40 8 11 16 190
¹ Based on RPS evaluation. Afiesere and Eriemu combined in RPS’s production forecast analysis
34

Infrastructure
35

Infrastructure Overview
• The licence benefits from all infrastructure being in place
• The licence includes 190 production wells, most are dual
string. Injection wells and water injection facilities are
unnecessary due to the strong aquifers
• Well production is collected at one of nine flow stations.
The flow stations have the capacity to handle 395,000
bpd, three times current production levels and will
handle several years of projected production growth
• The facilities are robustly designed and constructed and
benefit from following a standard design so equipment
can be easily replaced
• The facilities have been maintained by Shell and
therefore benefit from their worldwide experience and
standards
• Licence includes ownership of the Trans Forcados Pipeline that
transports crude 95 kilometres to the Forcados Terminal
36

Field Flow Stations
• Production for the wells is gathered at field specific flow stations
• The flow stations separate liquid from gas through a simple two stage
separation process
• Liquids are then pumped via a trunk line collection system to a central
manifold at Eriemu and onward through the Trans Forcados Pipeline
• Gas is used as fuel for power generation, run the compressors and as
gas lift gas. Any remaining gas is flared
• Design of the flow stations follows a similar template, and vessels are
similarly sized, making operations and maintenance straightforward
• Capacity of the stations is listed at left. Total capacity is c. 395,000
bpd. Current throughput is c. 120,000 bpd so there is substantial
existing capacity to accommodate future production. The expansion of
the facilities is straightforward and has been documented in various
FDP’s
Capacity
Flow Station
bbl/d
Afiesere 60,000
Eriemu 30,000
Evwreni 30,000
Kokori 90,000
Olomoro-Oleh 60,000
Oroni 30,000
Osioka 15,000
Oweh 30,000
Uzere West 60,000
37

Gas Lift Compressors
• Gas lift is the single method of artificial lift within OML 30
• Six of the eight fields have gas lift installed. The two remaining fields
are planned to have gas lift installed in 2014-2015
• Poor compressor performance and high downtime are the cause of
inefficient lifting and significant shortfall in daily production
• Improving the performance of the gas lift system is projected to
increase production by 20% and is the key target in 2013
Gaslift Number of Capacity
Compressor Station Units MMscf/d
Afiesere 5 21.2
Eriemu
gas from Afiesere
Evwreni 0
Kokori 3 13.2
Olomoro-Oleh 7 40
Oroni 0
Oweh
gas from Olomoro
Uzere West 2 10
38

Ughelli Pumping Station
• The Ughelli Pumping Station, (“UPS”) is the collection hub for OML 30
and several other operators’ production
• The facility has storage for 960,000 bpd of liquid and pumps the liquid
from the tanks down the Trans Forcados Pipeline to the Forcados
Crude Terminal
• Three Solar turbine powered pumps having a total capacity of 660,000
bpd perform the pumping
• The current facility is used to dewater crude for the Warri refinery.
Crude is separated from water via gravity separation and pumped from
the tank via a dedicated pipeline to the refinery
• The 960,000 bbl of storage also provides several days of storage in the
event of a shipping disruption on the Trans Forcados Pipeline
• Future plans call for expansion of the water separation capacity by
adding permanent subsurface water disposal facilities including
conversion of a suspended well to an injector into the substantial
aquifer and providing a water disposal line and injection pumping
39

Gas Export
• Gas export, surplus to internal requirements for gas lift and fuel,
is available for export via the Nigerian Gas Company (“NGC”)
facilities
• The NGC facilities include gas compressors and trunk lines for
conserving gas. Total capacity is 42 MMscf/d
• Gas is collected from the six largest OML 30 fields (Kokori,
Afiesere, Eriemu, Oweh, Olomor Oleh and Uzere West) and
transported to the nearby Ughelli gas plant where it enters the
Nigerian domestic distribution system
• At present, the system is non operational awaiting NGC to repair
the gas gathering pipelines
• OML 30 has a “domestic supply obligation” of 40 MMscf/d. In
the event domestic demand requires it, the licence is expected to
supply gas to the domestic and power generation markets of up to
40 MMscf/d. As gas supply far outweighs domestic demand, it is
unlikely this obligation will be called on. In the event the supply
is required, OML 30 can quickly recomplete an existing well on a
gas reservoir and meet this commitment
• 2.5 TCF of gas in the licence not included in the RPS report
NGC Sales
Capacity
Compressor Station MMscf/d
Afiesere 8.8
Eriemu 10.0
Kokori 8.0
Olomoro-Oleh 3.3
Oweh 5.5
Uzere West 6.6
40

Trans Forcados Pipeline
• The TFP is owned by OML 30 (45%
owned by Shoreline)
Forcados
River MF
Rapele
MF
UPS
Eriemu
Field MF
• This satellite photo illustrates the route
of the Trans Forcados Pipeline;
stretching from the Eriemu manifold in
the east, through the UPS, around the
north of Warri and westwards through
OML’s 34 and 42 to the Frocados
terminal, located within OML 45, where
the crude is dewatered
• The TFP stretches some 95 km starting
as a 16" pipeline at the Eriemu manifold
in OML 30 increasing to 24” on exit
from the UPS and increasing to 28” at
the Rapele manifold
Forcados
Terminal
• Along the pipeline there are several
intermediate tie-in manifolds
• Pipeline is buried
41

Trans Forcados Pipeline
• OML 30 owns and operates the TFP
• Several other operators currently use the TFP
to transport crude to Forcados for dewatering
and export. Capacity of the line is 850k bpd.
Current use is c. 315kbpd
• These operators pay OML 30 a ‘Capacity tariff’
ranging from $0.11 to $0.87/bbl and a
‘Production charge’ of $0.17 to $0.44/bbl.
The tariffs are based largely on the length of the
line that is used
• OML 30 does not pay a tariff
• TFP projected tariff revenues total $57.4m.
The 2012 actual Opex was $4.4m. Advice
received from PWC is that the pipeline
revenues will be taxed at a corporate income
tax rate of 30%
42

Field Development
43

Oil Rate ('000 bopd)
Current Production
60
50
OML 30 Licence Production: 01-07-2010 to 30-11-2012
UZRE OWEH ORNI OLOM
KOKR EVWR ERMU AFIE
• OML 30 production since 1 July
2010 to 30 November 2012 is
illustrated. Production
averaged 35.7 kbopd during
November 2012
40
30
20
• Production from Uzere West,
averaging 2.5 Kbopd has been
shut-in since December 2011
due to community issues in the
adjacent town of Uzere
10
0
44

Realising Existing Potential and Future Upside
Short
term
• Increase production through:
• Improved gas lift by refurbishing existing system
• Complete repairs to flow and gas lines and tie-in wells
• Prevent downtime through improved community relations and share in profits to reduce vandalism
• Invest in facilities to increase uptime
• Modernise facility control equipment to increase efficiency
Medium
term
• Workover existing shut-in wells to improve completions and to install gas lift in wells without
artificial lift
• Large stock of proved drilling locations determined from 3D seismic
Long
term
• Upside potential through focused management of the field and employing techniques such as multiple
completions and horizontal drilling
• Future exploration of deeper targets identified on 3D seismic
• Future gas prices may lead to developing gas reserves
• Lease extension past 2019; expected to be renewed thereafter as legislation provides for extension
45

Production Profile
OML 30 Projected Gross Production, bopd 1
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
• Key developments to drive increase in production;
• Gas lift
• Uphole potential and flowline repairs
• Workovers
• Further drilling
• Exploration potential
• Upsides to the base case include development of the asset’s 2.5 Tcf of gas and deeper exploration potential
¹ RPS estimates of OML 30 gross Proved plus Probable Reserves (2P) production profile
46

Wells
The Work Programme – Gas Lift
• Gas lift is the key short term focus
• Compressors are operating below design capacity and require refurbishment (pistons, valves, gaskets, etc)
• Current compressor uptime c. 65%. Target to increase to 95%. Resulting production gains c.10,000 bopd. Downtime caused by
engines tripping due to mechanical integrity issues and fuel gas supply pressure. Study currently underway by the compressor
manufacturer
• Subsurface gas lift operation is inefficient
• Valves not set at correct depths and not working as designed. Results in inefficient lifting and waste of gas lift gas
• Detailed data gathering and well by well review underway with Government. Target is to optimise lift on 32 strings with
associated production gains target of c.8,100 bopd
• Gas lift not installed to all wells
• As water cut increases gas lift is required to maintain production. At 70% watercut wells will stop flowing. Gas lift system to be
expanded in fields that currently have compressors. Target is to install gas lift to 19 wells in 2013 and 2014. Resulting
production gains c.4,300 bopd
• Gas lift systems to be installed at Oroni and Evwreni fields (these two fields currently have flowing wells only). Production gains
associated with installing gaslift in Oroni and Evwreni total 3,600 bopd
25
20
15
10
5
Gas Lift Optimisation and Expansion
Uzere West
Oweh
Oroni
Olomoro-Oleh
Kokori
Evwreni
Eriemu
Afiesere
0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
47

Wells
The Work Programme – Flowline Repairs
• Some wells have damaged or vandalised flowlines that require repairs
• Flow lines are often ‘hack-sawed’ by locals to bunker small amounts of fuel or as vandalism
• Plan is to ensure every well string has a functioning flow line
• Twenty three wells do not have flow lines. Well surveillance and historical information indicates these wells are productive on the
current completion but also could be recompleted on shallower reservoirs
• Target production increase associated with flowlines is 6,300 bopd
14
12
10
8
6
4
2
Flowline Repairs
Uzere West
Oweh
Oroni
Olomoro-Oleh
Kokori
Evwreni
Eriemu
Afiesere
0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
48

Wells
The Work Programme – Workovers
• The licence includes 190 wells. Among those, 70 wells are currently temporarily suspended for various issues. Among the 120 that are available
to be produced, half are operating sub-optimally
• Workovers are planned on wells to optimize gas lift design. Valves have been installed at the wrong depth and in many cases valves are
not working. If the work cannot be completed using wireline equipment, a workover will be completed
• The reservoirs are comprised of slightly unconsolidated sands and have typically been completed with gravel packs. Some wells are shutin
requiring workovers due to high sand production and require replacement of the gravel packs or installation of other sand control
measures
• Advancing aquifers cause increasing water production. Several opportunities to increase production by completing water-shut-offs. As
deeper reservoirs become depleted wells can be recompleted on shallower reservoirs
• So far 41 workovers have been identified with target gains totaling 9,600 bopd
16
14
12
10
8
6
4
2
Workovers
Uzere West
Oweh
Oroni
Olomoro-Oleh
Kokori
Evwreni
Eriemu
Afiesere
0
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
49

Wells
The Work Programme – Drilling Proved Locations
• Of the current c.190 wells only 30 wells were drilled post the initial field development period that occurred between 1960 and 1980
• The lack of continued development has resulted in an extensive catalogue of proved drilling locations, currently totaling c. 220
• Potential well locations have been extensively studied and well documented in past FDP’s
• Plan is to verify the technical work within the existing FDP and use these as guidelines for near term development
• The existing FDP’s call for extensive development using horizontal drilling technology to reduce gas and water coning and to maximise recovery
factors. Horizontal drilling is being used extensively in the region
• Horizontal drilling is proven in the delta
• Infill drilling is scheduled to commence in 2014. Tendering for the first drill rig is moving in parallel with a rig for an adjacent licence
50
45
40
35
30
25
20
15
10
5
0
Drilling
Uzere West
Oweh
Oroni
Olomoro-Oleh
Kokori
Evwreni
Eriemu
Afiesere
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
50

The Work Programme – Exploration of Deeper Targets
Prospect
Oil
MMbbls
Condensate
MMbbls
In Place Volumes
Gas
MMboe
Total
MMboe
Uzere SP 26 88 1,128 308
Oroni DP 12 75 720 210
Oweh DP 7 60 497 153
Omogon Bik B 44 18 449 137
• To date the extensive seismic information base has
identified many prospects and leads
• Development of the shallower producing reservoirs will
provide opportunities to drill deeper and explore
structures that have not yet been penetrated
• As an example, the Omogon prospect, located southeast of
Kokori, is illustrated below:
Eriemu N 11 30 433 114
Oweh NW 25 1 406 96
ODHE Lyede 3 7 492 95
Ofum E 28 1 337 87
Urhure 19 13 256 76
Isoko W 22 9 218 68
Oroni E 10 9 218 68
Ekiugbo 4 14 193 51
Ekiugbo N 1 4 50 13
Olomoro N 4 1 38 11
TOTAL 215 331 5,505 1,485
51

Gross CAPEX Projection
$700
$600
$500
$400
$300
$200
OML 30 Gross 100% CAPEX (US$m)
• CAPEX totals $3.5 billion (Gross 100%)
US$1.6 billion Net Shoreline
• Includes drilling of 218 new, primarily
horizontal, wells
• Cost of horizontal well US$15m
• Drilling commences with first rig in 2014 and
then one new rig added every six months
• Maximum of six rigs peaks at end of 2016
• Drilling ramps down in 2020 and ends in
2025
$100
$0
• Facilities CAPEX investments, scheduled to be completed during 2013 to 2015 include;
• compressor maintenance and expansion or refurbishment of the gas lift system - US$67m
• installation of temporary and custody transfer metering - US$33m
• modification to the Ughelli Pumping Station to provide water separation and additional facilities modernisation - US$65m
• flowline repairs for existing wells - US$17m
• workovers on existing wells to restore production - US$85m
52

Netback per Barrel
$130
$120
$110
$100
$90
$80
$70
$60
$50
$40
$30
$20
$10
OML 30 Net Back
$115.00/bbl
$23.00
$1.70
$7.00
$5.00
$51.35
$26.75
• Shoreline’s per barrel netback is US$26.75
• The calculation follows the current fiscal assumptions
• Royalty levied at a rate of 20% oil
• Education Tax, levied as 2% * (revenue - royalty - Opex)
• NDDC levy, levied as 3% * (total Capex + total Opex)
• Annual licence rental payable at the rate of MOD US$ 1.1 mm
• Petroleum Investment Allowance, 5% of annual tangible Capex
• Income tax scenario
• Oil Base Case, 65.75% for 5 years and 85% thereafter
• Alternate case 65.75% for 5 years and 70% - 80% thereafter
• Assumptions could change with new PIB regulations
• Capex intangible/tangible split of approximately 30%/70% -
depreciation 20% in years 1 to 4 and 19% in fifth year
• Forcados crude receives c.3% premium to Brent
$0
Royalty
Education Tax
Capex
BARREL
Net Back
NDDC Levy
Opex
Petroleum Profits Tax
53

Environmental and CSR
54

CSR is a Key Component of Enhancing Performance
Heritage Approach to CSR
• Engage and work with stakeholders
towards a shared future and to be
viewed as a partner of choice
• Committed to a programme of proactive
engagement to create lasting
legacies for local communities
• CSR policy framework is integrated in
our business model, setting out our
essential core values
• Strong track record for health and safety
• Employment of local personnel
• Maximise local content of all contracts
Devise and
maintain
systems
Communicate
and report to
stakeholders
Set policies
Measure and
monitor
performance
Apply
stakeholder
feedback
Six Key Areas:
• Environment and Sustainability
• We aim to make a positive
contribution to the protection of the
environment
• Health and Safety
• A natural priority and core element
of our activities
• Employees
• Ability to create sustainable value is
linked to our ability to recruit,
motivate and retain high calibre staff
• Community and Human Rights
• Relationships to be conducted
sensitively and with mutual respect
• Business Conduct
• Heritage is resolutely opposed to
bribery and corruption in whatever
forms they may take
• Corporate Governance
• Compliant with law and relevant
regulations
55

CSR in OML 30
Heritage Approach in Nigeria
• Shoreline is structured as an indigenous company to incentivise
local support
• Profit share to support local communities and implement longterm
sustainable development initiatives
• Over 50 communities in the lease area
Advisory Group
• Group already established
• Consists of senior leaders from local communities
• Regular dialogue with local communities
• Focusing on education and healthcare
• Internationally recognised environmental agency commissioned
to review the lease
• No identified legacy issues for Shoreline
• OML 30 operational staff will be drawn from local communities
• Growth in production will result in growth in employment
56

Nigeria
57

Exposure to Nigeria Provides Opportunities for Future Growth
Proved Oil Reserves, bn bbls 1
300
250
200
150
100
50
0
• Currently experiencing the longest period of democratic
rule in its history with reforms positively impacting the
economy
• Availability of highly skilled workers
Growing economy
• Second largest economy in Africa in GDP terms as at 2010
• Predicted to be one of the largest growing emerging
economies with growth expected in the energy sector
• IMF forecasts a graduals lowering and stabilising of
Nigerian inflation
Large reserves
• First discovery made in Nigeria in 1956 and production
commenced two years later
• Proved reserves of 37.2 bn bbls 1 , the largest in sub-
Saharan Africa, the 2nd largest in Africa after Libya and
the 10th largest in the world
• Largest African producer with 2.5 mmbbls/day
• Ability to exploit attractive reserves close to infrastructure
¹ BP Statistical Review 2012
58

Further Indigenisation of the Oil Industry
• Large number of discovered but undeveloped fields with significant
upside potential
• Resource ownership and production has been dominated by the five
major IOCs
Resource Ownership in Nigeria, mmboe
5% 3% 1% 1%
• Major IOCs are divesting existing leases/fields which are neglected
• Expect indigenous independent companies to increase representation
in terms of commercial reserves and production
• Expected fiscal stability for indigenous companies within the proposed
new Petroleum Industry Bill
47%
• The acquisition and partnership with Shoreline Power enhances
Heritage’s profile in the country and creates a platform for further
growth opportunities in this prolific hydrocarbon region
43%
Major IOC
State owned
International NOC
Indigenous
International E&P
International Integrated/large cap
59

Petroleum Industry Bill
• Represents the largest overhaul of the government petroleum
system in the last four decades
• Bill has been debated since 2008 and is set to be the overriding
guide for oil and gas business in Nigeria
• Establishes the legal and regulatory framework, institutions and
regulatory authorities for the Nigerian petroleum industry
• Stipulates guidelines for operations in the upstream, midstream
and downstream sectors
• Combines 16 different Nigerian petroleum laws in one
document, helping to provide transparency
• Currently being discussed by Parliament however final
promulgation unknown
• Potential Impact on Shoreline
• Expect indigenous companies to be the main
beneficiaries
• Improve tax and royalty terms for indigenous
companies
• Likely to result in divestment programmes for IOCs
continuing
• It proposes:
• A commercially run National Oil Company (NOC) and
National Gas Company (NGC)
• Tougher upstream licensing rules and work
commitments, with more recycling of acreage
• Oil and gas profits taxed as one
• Nigerian Content Plan
60

PRODUCTION - RUSSIA
61

Russia
• 95% equity interest in Zapadno Chumpasskoye Licence 1
• Licence located in Western Siberia (region accounts for >60% of Russia’s oil
production)
• Production in Q3 2012 averaged 617 bopd, a 9% increase over the first half of
the year
• RPS certified 65 mmboe and $336 million NPV10
• Work in 2009/10 included installation of artificial lift and commencement of
water injection
• FDP approved by the Central Committee on Resource Development (TSKR) at
end of December 2009
• Infrastructure development includes tie-in to Transneft export pipeline
• Successful completion of a horizontal well in August 2011
• The horizontal well is the first such well drilled in the immediate area and
presents a more effective and efficient method to develop the field
• Based on the excellent horizontal drilling results, further horizontal wells are
planned
¹ Acquired 95% ownership stake in Russian company ChumpassNefteDobycha Limited, 100% owner of the licence
62

Zapadno Chumpasskoye
• Based on positive results from the horizontal well, a revised field development plan was submitted for Zapadno Chumpasskoye, replacing
vertical producers to horizontal wells. The drilling grid, utilising horizontal wells is illustrated below
• The change in well type result is a 50% reduction in number of production wells required to develop the field and a corresponding reduction in
drilling capex of over US$200m
• The development proposal was accepted by regulatory authorities end December 2012
63

EXPLORATION
64

Heritage’s Successful Track Record
Heritage Net 2P Resource (MMboe) vs Time
Exploration Drilling Success
950
800
650
500
350
200
50
-100
-250
-400
-550
-700
Uganda sale
Kurdistan sale
2008 2009 2010 2011 2012 2013
Oil
60%
Gas and
Condensate
30%
Dry
10%
Uganda
8 Wells
Kurdistan
2 Wells
Russia Uganda Kurdistan Nigeria
• Year-by-year proven success
• Increased resource and reserve base over time
• Proven success in divestment and monetising of resource base
funding growth
• 90% exploration success rate as operator
• Additional 10 appraisal and production wells successfully drilled
in Uganda, Kurdistan and Russia
65

Tanzania
66

Tanzania
• The offshore Latham block is on trend with the recent
major deep-water gas discoveries in Tanzania waters.
Clear gas indicators are present within the block.
• Acquisition of 3D seismic offshore completed and data
being processed with a view to establishing a potential
drilling location
• Awarded Rukwa PSA in November 2011 and Kyela PSA in
January 2012
• Operations have commenced and the initial work
programme comprises;
• Rukwa - 2,300 kilometres of legacy 2D seismic data
reprocessed. Acquisition has begun of an additional
650 kilometres of 2D seismic data to infill this legacy
data
• Kyela - full tensor gravity survey acquired, which has
now been interpreted. Completed acquisition of 100
kilometres of 2D seismic data intended to further
delineate features of interest identified in the gravity
data
• Latham 1 5,056 sq km 29.9%, operator
• Rukwa North 10,175 sq km 100%, operator
• Rukwa South 8,745 sq km 100%, operator
• Kyela 1,934 sq km 100%, operator
• Heritage considers these blocks as sharing geological
similarities with the Albert Basin of Uganda where the
Company had considerable exploration success
1
Petrodel 70.1%
67

Tanzania - Rukwa
2,300km of legacy
2D seismic
Modelled source
kitchen
Legacy data lead
Targeted 2D seismic campaign
commenced. Particular focus on
NE margin to delineate
kingfisher analogues
(completion Q1 2013)
Legacy data
potential kitchen
650km of Targeted 2D
Seismic Infill
68

Tanzania - Kyela
Reconnaissance
2D seismic
Local Kitchen
High Resolution Gravity Data
Gravity-defined
lead
• Over 4000m of section identified
• Leads identified on gravity highs
Gravity -defined
kitchen
• Potential source kitchen identified
• 100km reconnaissance seismic
acquisition completed
69

Libya
70

Libya – Strategically Well Placed
• Heritage established a base in Benghazi in April 2011
• Extremely well placed to benefit in the future development of the
oil industry in Libya
• Heritage Oil acquired a 51% equity interest and control of Sahara
Oil Services Holdings Limited (“Sahara Oil”), an established oil
field service provider
• Sahara Oil owns the entire share capital of Sahara Oil Services
Limited (“Sahara”)
• Sahara has the necessary long term permits and licences to
provide onshore and offshore oil field services in Libya as well as
the rights to own and operate oil and gas licences
• Through this acquisition Heritage is exploring ways to gain access
to key producing fields and other licence opportunities in Libya
71

Malta
72

Malta
Heritage Oil 100% working interest and operator
• Two areas; c.18,000 sq km
• Structures identified on Areas 2 & 7 could be analogous to the
giant Bouri Field where IHS estimate reserves of 630 mmbbl and
in excess of 8 TCF of gas
• Number of producing fields offshore Libya and Tunisia
• Oil and gas shows close to Area 7
• Water depths of 250-300 metres
• 1,023 kilometres of legacy 2D seismic reprocessed
• 1,400 kilometres of 2D seismic acquired processed and
interpreted
• High-impact exploration well planned which will target
approximately 500 mmboe. Well planning ongoing
73

Malta
Fault cutting
near to surface
Seabed reef –
methanophilic
bacteria
Possible gas
chimney
Regional MFS
(Souar Fm) acting
as seal?
Upper Caravaggio
Continued
progradation
through the Oligo-
Miocene section
Lower Caravaggio
Nummulite/Reef
mound
Talus slope
74

SUMMARY AND OUTLOOK
75

Summary
Entry into Nigeria
• Acquisition of a world class asset
• Provides a step change in production, reserves and cash flow
• Combines Shoreline Power’s local knowledge and relationships with Heritage’s technical expertise
Exit from Kurdistan
• Attractive exit valuation secured for a development asset with a significant future capital expenditure requirement, political risk and no
pipeline to market
• Proceeds used to partially fund acquisition of OML 30 and continue exploration and development of existing portfolio
Corporate Outlook
• Strong balance sheet
• Potential for developing and strengthening the portfolio further through acquisitions
Operational Outlook
• Catalysts
• Increase in production from OML 30
• Initial exploration ongoing in Tanzania
• Well planning ongoing in Malta
• Material increase in production, cash flow and revenues generating more regular newsflow
76

APPENDICES
77

Appendices
• Heritage Oil Plc Board
• Shoreline Board
• Contact Details
78

Heritage Oil Plc Board
Anthony Buckingham – CEO, Director
• Active oil sector businessman since 1970s; founded Heritage in 1992
• Former advisor to Premier Oil (introduced them to Pakistan) Sonangol and Ranger Oil; architect behind Sonangol E&P
Paul Atherton – CFO, Director
• Chartered accountant, degree in geology, corporate finance background
• Joined Heritage in 2000
Michael Hibberd – Chairman, Non-Executive Director
• Extensive background in international energy, planning & capital markets. Former Director of Scotia McLeod
• On the board of a number of public and private companies
• Joined Heritage in 2006
General Sir Michael Wilkes – Non-Executive Director, Senior Independent Director
• Retired from the British Army as the most senior administrative officer
• Chairman and non-executive director of a number of public and private companies
• Joined Heritage in March 2008
79

Heritage Oil Plc Board (cont’d)
Gregory Turnbull – Non-Executive Director
• Regional Managing Partner of McCarthy Tétrault LLP
• Extensive knowledge of corporate governance issues and has acted for many boards of directors
• Joined Heritage in 1996
John McLeod – Non-Executive Director
• Professional engineer with over 36 years of varied resources extraction experience
• Joined Heritage in 1996
Carmen Rodriguez – Non-Executive Director
• Recently held the position of Chairperson and CEO (2007-2012) of Sociedad Estatal Espanola P4R, S.A., a Spanish owned
consultancy firm specialising in foreign trade, investment and co-operation
• Joined Heritage in March 2012
Colonel Mark Erwin (Retd.) – Non-Executive Director
• Mr. Erwin served in the United States Army for over 25 years culminating his career as the Chief of Staff of the United States
Army Special Operations Command
• Joined Heritage in May 2012
80

Shoreline Board
Dr Ladi Bada – CEO
• Dr. Bada has been working in the Nigerian oil and gas sector for the last 14 years with 10 of those years in directorial roles
• He is presently a director in Linetrale Oil and a consultant to Oriental Energy
Paul Atherton – CFO
• Chartered accountant, degree in geology, corporate finance background
• Joined Heritage in 2000
Kola Karim – Chairman
• Group CEO and Managing Director of Shoreline Energy and Shoreline Power
• Mr Karim holds an MBA from the University of Leicester and degree in Business Management from City University; he is
also an alumni member of the Harvard Business School for the Executive Management Programme and the Harvard
Kennedy School for the Leadership and Public Policy programme. He was awarded Young Global Leader Award in 2008.
Tunde Karim
• Mr. Karim also serves on the board of Shoreline Energy, April Travels Ltd, Nigerian Ropes Plc, Fortis Construction Co. Ltd
Shoreline Electrical Systems Ltd, L.D Alberto Company Ltd and Askar Paints Ltd
• Mr. Karim is a member of the Institute of Directors Nigeria and holds a degree in Biochemical Engineering from University
College of Wales, U.K
81

Shoreline Board
Philip Blows
• Mr. Blows is a chartered accountant and has been an adviser to Heritage for 20 years
• Holds a degree in Business Law
82

Contact Details
Heritage Oil Plc
Tony Buckingham / Paul Atherton
• Tel: +44 (0)1534 835 400
• Email: info@heritageoilplc.com
• Website: www.heritageoilplc.com
Investor Relations – Heritage Oil Plc
Tanya Clarke
• Tel: +44 (0)20 7518 0838
• Email: ir@heritageoilplc.com
Media Enquiries
Ben Brewerton / Natalia Erikssen
• Tel: +44 (0) 20 7831 3113
• Email: heritageoil.sc@fticonsulting.com
Canada
Cathy Hume / Jeanny So
• Tel: +1 416 868 1079 x231 / x225
• Email: cathy@chfir.com / jeanny@chfir.com
Stock symbols
London
HOIL
HOX (Exchangeable)
Toronto
HOC (Exchangeable)
83