October 5, 2011 / 6:58 AM / 6 years ago

CORRECTED-UPDATE 1-Heritage encouraged by oil tests at Iraq well

2 Min Read

(Adds dropped number '5' in paragraph four to read '53' instead of '3')

* Maximum flow rate 1,950 bopd, restricted by surface equipment

* Gross in-place P50-P90 contingent volumes of 53-75 MMbbls of oil

* Development wells could produce 8,000-10,000 bopd per well

* Drilling operations continuing ahead as planned

LONDON, Oct 5 (Reuters) - British explorer Heritage Oil said it was encouraged by results of tests for oil at its operations in Iraq where a major gas find announced earlier this year had been overshadowed by an apparent lack of oil.

"We are encouraged by the results of our first test in the Miran West-3 well," Chief Executive Tony Buckingham said in a statement on Wednesday. "We are drilling ahead with a view to conducting the next test in the Lower Cretaceous reservoir."

Heritage, which specialises in exploring for gas in tough frontier regions and political hot-spots, said drilling in the upper cretaceous reservoir achieved a maximum flow rate of 1,950 barrels of oil per day (bopd) and confirmed the potential for it to produce 8,000 to 10,000 bopd from each well at the reservoir.

The tests at the field in the Kurdistan region of Iraq also confirmed potential overall volumes in the Miran West structure's upper Cretaceous reservoir of 53 to 75 million barrels, Heritage said.

Shares in the company, which is currently valued at about $900 million, slid in January when it unveiled a major gas discovery but no oil at the nearby Miran West-2 well. Gas is seen as less commercially valuable in the region given a lack of infrastructure and the resulting difficulty in getting gas out.

Heritage announced on Tuesday that it had bought control of a Benghazi-based oil services firm, striking the first upstream deal in Libya since the overthrow of Muammar Gaddafi.

Reporting by Paul Hoskins; editing by Matthew Scuffham

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