HERITAGE OIL ANNOUNCES MIRAN WEST-2 APPRAISAL WELL TO BE

DRILLED TO DEEPER EXPLORATION TARGETS

The Miran West-2 well has intersected significant hydrocarbon-bearing intervals

over approximately 1,800 metres within Cretaceous formations

Three zones, determined from logging, will be tested when the deeper target depth

has been reached

Significant structures have been mapped within the previously undrilled Jurassic

and Triassic levels, substantially adding to the hydrocarbon potential of the Miran

structure

The Miran West-2 well will continue to be drilled to a revised target depth of

4,600 metres to encounter these deeper exploration targets. This is expected to

take a further four to five months

3D seismic programme to commence in the second half of 2010

The Miran West-2 appraisal well, which spudded on 26 November 2009, has reached a

current depth of 2,627 metres and encountered hydrocarbon-bearing intervals totalling

approximately 1,800 metres within Cretaceous formations. An extensive coring

programme of approximately 250 metres was undertaken in the well.

This appraisal well is being drilled within a part of the Miran West structure where it now

appears the fracture network is less well developed. This variability in fracture

development is consistent with the carbonate reservoirs throughout the region. This

resulted in no hydrocarbons being flow tested to surface from the interval within Miran

West-2 equivalent to that successfully tested in Miran West-1. However, having

undertaken wireline logging, three zones from within a deeper Cretaceous interval have

been identified for testing once drilling operations have been completed.

The well will now be deepened to approximately 4,600 metres to explore further potential

in the underlying Jurassic and Triassic structures. These targets have been identified

from additional seismic data acquired in January 2010, after the Miran West-2 well had

commenced drilling. These exploration targets have the potential to contain substantial

volumes of additional hydrocarbons. It is expected that drilling will take a further four to

five months, following which the well will be tested.

Heritage is planning to acquire 3D seismic data over the Miran Block to enable further

appraisal drilling to encounter the fracture networks more efficiently. The Miran West-1

well has previously demonstrated that where open fractures are encountered in wells the

reservoir will support potential production rates of approximately 10,000 bopd.

Future plans for the drilling of the Miran East-1 exploration well are progressing and the

Company is looking to contract a rig for later this year.