HERITAGE OIL shares fell more than six per cent yesterday after it revealed that it needed to drill deeper in one of its wells in Iraq.
The Miran West-2 appraisal well in Kurdistan will need to be deepened to 4,600 metres from its current 2,627 metres in order to explore its potential.
Chief executive Tony Buckingham said: “The further hydrocarbon potential in the deeper targets in the Miran structure has the potential to increase resources significantly.
“We look forward to undertaking a testing programme when drilling has been completed.”
Richard Griffith, analyst at Evo Securities, said: “The company has highlighted further structures in the Jurassic and Triassic levels (previously not mapped) which could add significant value and will drill these over the next four to five months.”
He added: “If consistent with the region these are likely to be targeting billions of additional oil in place. At present there is no change to our recommendation or target price.”
Heritage added that the Ugandan government has backed the sale of its interests in two oilfields in the country to Tullow Oil for $1.35bn (£888m).
The firm said it received a letter from the East African state’s government supporting the sale of its stakes in the sites on the shore of Lake Albert.
The complex negotiations have taken months and the letter could signal a significant move towards the deal being finalised.