26 January 2011

HERITAGE OIL ANNOUNCES THE DISCOVERY OF A MAJOR GAS FIELD

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Highly productive Jurassic reservoir intervals tested at a restricted cumulative flow rate of over 75 million cubic feet per day (MMscfd)

• Estimated gross P90-P50 in-place volumes of between 6.8-9.1 TCF, with a P10 upside of 12.3 TCF

• Management estimates Heritage has mean risked contingent and prospective resources in Miran West and Miran East of 744 million barrels of oil equivalent (MMboe), based on a 75% working interest

• Significant increase in contingent resources following the successful testing of hydrocarbons

• Development options being considered with first production targeted for 2015 using planned regional infrastructure

• 2011 multi-well drilling programme has been accelerated with the Miran West-3 appraisal well scheduled to commence drilling in the second quarter

• Second rig planned to commence drilling in the autumn of 2011

• Size of 3D seismic programme has been expanded following this successful well

• Miran East prospect risk reduced

The Miran West-2 well was initially designed as an appraisal well for the Cretaceous section and was subsequently modified to assess the exploration potential of the deeper formations, eventually being drilled to a total depth of 4,426 metres. The well results have confirmed three additional pay zones within Lower Cretaceous and Jurassic formations, in addition to the pay zone identified in the Upper Cretaceous in the Miran West-1 well.

Additionally, well results have established that the Miran Field contains two hydrocarbon systems, with oil in the shallower Upper Cretaceous section and wet gas/condensate

within the deeper Lower Cretaceous and Jurassic formations. This has resulted in the previously anticipated prospective oil resources in the Lower Cretaceous, identified on the basis of oil shows in the Miran West- 1 well, being proven to be wet gas/condensate.

The Miran West-2 well has been suspended as a future producer.