Companies: DPL    HOIL   

The Tanzanian government has approved Heritage Oil’s farm in to Dominion Petroleum’s Kisangire project.

AIM-quoted Dominion first agreed in April to give fully listed Heritage majority stakes and the role of operator in four licences under the Kisangire production-sharing agreement in eastern Tanzania. Now the authorities have approved the deal, whereby Heritage can earn 55 per cent of the Kisangire and Lukuliro licences by funding seismic data and drilling one well and take that to 70 per cent by funding 87.5 per cent of the costs of a second well.

The agreement allows Heritage to earn a 70 per cent working interest in the Kimbiji licence area and a 29.9 per cent interest in the Latham licence area in return for funding all seismic costs for an initial exploration period for both and drilling two exploration wells at Kimbiji. Both companies’ chief executive officers, Mike Garland for Bermuda-based Dominion and Tony Buckingham for Heritage, express their enthusiasm for testing this area.

At 16.5p, Dominion’s shares are well down from their 64.5p peak last year and value the company at £71milliion. Heritage's share price at 194p, down from 350p June, value it at £494 million.

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