Heritage sells off Ugandan assets to Eni

HERITAGE OIL, the exploration group, confirmed plans to sell off its Ugandan interests to Italian rival Eni for $1.5bn (&pound;903.2m) yesterday, leaving it free to pull out of an increasingly unattractive Kurdish tie-up.<br /><br />It will sell its 50 per cent stake in two Ugandan oil fields for $1.35bn cash, with a deferred payment of $150m, rather than merging with Turkish group Genel. <br /><br />Paul Atherton, chief financial officer at Heritage, said the money raised would be used to develop its existing assets, make acquisitions, and could also go towards funding a special dividend of 75-100p per share.<br /><br />&ldquo;We&rsquo;ll have a billion dollars in cash so we&rsquo;ve certainly got the financial resources to undertake some very large transactions,&rdquo; he said.<br /><br />The deal will need to be approved by Ugandan authorities, but should be completed by 2010.<br /><br />The deal spells the end for a long-awaited tie-up between Turkish rival Genel and Heritage, which could have seen it move into the FTSE 100. <br /><br />Political disputes in Iraq and a lack of progress on large finds Heritage made in the semi-autonomous Kurdish region of Iraq earlier this year had also weighed on the group.<br /><br />Analysts welcomed the sale&rsquo;s strategic sense, saying the Ugandan fields sold by Heritage are about to enter a complex development stage, which would be better managed by a big oil company. <br /><br />However, the agreed price was below most valuations of the fields, which had been at around $2bn.