HERITAGE Oil has cancelled its $370m (£235m) rights issue to fund its expansion into Nigeria, as it announced yesterday it is to sell a 26 per cent stake in a gas block to Tony Hayward’s Genel Energy.
The London-listed oil explorer will sell part of the Miran Block, in the volatile Kurdistan region of Iraq, for a cash sum of $156m, increasing Genel’s holding in the block from 25 per cent to 51 per cent.
Genel will also loan Heritage $294m, which will be repaid by a transfer of Heritage’s Middle Eastern arm to Hayward’s oil and gas vehicle, giving it full control of the Miran Block.
After exiting the block, Heritage will have no presence in the region.
Hayward, chief executive of Genel, said yesterday: “Our belief in the significant potential of the region is stronger than ever and we aim to continue to play a leading role in the consolidation and development of the oil and gas sector in Kurdistan.”
Shares in Heritage Oil yesterday closed up 21.95 per cent at 205p.