Heritage Oil Announces Its Annual Financial Report for the Year Ended 31 December 2009

CALGARY, ALBERTA--(Marketwire - April 30, 2010) -

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Heritage Oil Plc (TSX:HOC)(LSE:HOIL), an independent upstream exploration and production company, announces the publication of its annual financial report for the twelve months ended 31 December 2009. All figures are in US dollars unless otherwise stated.

Operational Highlights

--  Discovered the Miran West Field in the Kurdistan Region of Iraq
    ("Kurdistan")
--  Tests on the Miran West-1 well, Kurdistan, indicate potential for
    production from the well of 8,000-10,000 bopd
--  Miran West-2 well has intersected significant hydrocarbon-bearing
    intervals over approximately 1,800 metres
--  The Miran West-2 well is drilling to the deeper Jurassic and Triassic
    exploration targets which could add significantly to the hydrocarbon
    potential of the Miran structure
--  Three zones identified in the Cretaceous in Miran West-2 to be tested
    when exploration drilling is completed
--  Completed the successful Block 1 drilling programme in Uganda with the
    discovery of the world-class Buffalo-Giraffe Field

Financial Highlights

--  Proposed sale of Ugandan interests for up to $1.5 billion. Expect
    transaction to complete within the first half of 2010
--  Intention to pay special dividend of between 75p to 100p per share
    following completion of the sale of the Ugandan interests
--  Sale of non-core holdings in Oman realised cash of $28.4 million
--  Successful placing of 25.4 million new shares raised gross proceeds of
    $217 million
--  Back costs of $6.7 million were received on the exercise of third party
    back-in rights for 25% in the Miran Block, Kurdistan
--  Strong balance sheet; cash of $208 million at 31 December 2009, which is
    stated before the sale of the Ugandan interests and payment of the
    special dividend
--  Net average daily production of 329 bopd in 2009

Outlook

--  Heritage's most diverse work programme ever planned in several core
    areas
--  High impact exploration well in Malta planned for the fourth quarter of
    2010
--  Exploration and appraisal drilling on the Miran structure, Kurdistan, to
    continue in 2010
--  Exploration well planned in Pakistan for the fourth quarter of 2010
--  Production expected to increase in Russia with additional development
    drilling
--  Examine opportunities to generate further value for shareholders

Tony Buckingham, Chief Executive Officer, commented:

"Operational strength in 2009 coupled with corporate initiatives has placed the Company in a strong position for 2010 and beyond. In the short-term we remain focused on delivering shareholder value through the monetisation of our Ugandan interests and through our high impact drilling programme in Kurdistan. Wells planned in Malta and Pakistan for the second half of 2010 as well as the ongoing drilling of the Miran West-2 well, ensure that we continue with our diverse, active work programmes."

Heritage's 2009 Annual Report is available on its website at www.heritageoilplc.com.

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CHAIRMAN'S STATEMENT

I am pleased to report that 2009 has been another momentous year for Heritage. We have crystallised value with the disposal of our Omani interests and the proposed disposal of our Ugandan interests. We are now moving forward into a new chapter of core area activities.

It is with some sadness that we prepare to leave Uganda, but this is countered with pride that we have left a lasting legacy which has benefited people in our concession areas and has established a hydrocarbon future capable of supporting infrastructure and industrial development. This will have lasting benefits for the people of Uganda. We have established a solid base for other companies to build upon and we fully expect new entrants into Uganda to continue with the numerous corporate social responsibility ("CSR") programmes that we have initiated and pursued with enthusiastic support from Ugandans individually and from the Ugandan Government.

As we prepare to dispose of our interests in Uganda, which has been a core area of focus for us, it seems appropriate to reflect briefly on the evolution of Heritage. We listed on the Toronto Stock Exchange at the beginning of 1999 with a market capitalisation of less than $15 million and assets focused in Uganda and Congo. Through our own initiatives and technical expertise, combined with excellent strategic guidance, Heritage has evolved into a company currently valued at $2.3 billion with an extensive portfolio of core assets focused on Africa, the Middle East and Russia.

Heritage was the pioneering company in the Albert Basin. Entering Uganda in 1997, Heritage was the first company to explore for and operate Ugandan oil and gas interests in almost 60 years. Our entry into the region was exploration-led because we believed, from the geology, that it had the potential to be a significant oil basin. Our first licence covered the original Block 3. We were active on our licence for four years before Energy Africa farmed into our acreage. In 2004, part of Block 3 was relinquished and Block 3A, which covered most of the exploration acreage in the original Block 3, was re-licenced along with Block 1 at the northern end of the basin. Over the last 13 years we have carried out extensive work in the basin. Since 2006, we have drilled six wells on our licences, all of which have found hydrocarbons. The two wells tested in our licence areas each produced at rates in excess of 12,000 bopd. In addition to new field discoveries, we also established many other leads and prospects in our licence areas which have confirmed the Albert Basin to have multi-billion barrel resource potential.

Our operations in Uganda have adhered consistently to CSR policies which we are now beginning to extend to our other core area holdings as work commences in these new areas. We expect to achieve significant value accretion for our shareholders in a work environment that benefits local populations and establishes legacy assets that sustain long-term benefits for the countries in which we are working.

Operations

Uganda

In 2009, in Uganda, we continued building on successes achieved in 2008. The Giraffe discovery in Block 1, at the beginning of 2009, allowed us to exceed comfortably the required commercial threshold for development. This enabled us to progress methodically with our work with the Government of Uganda to plan for an early phased development, based initially on our Kingfisher discovery in Block 3A and progressing to commercialisation of the Albert Basin.

Kurdistan

Heritage commenced drilling the Miran West-1 well in December 2008, less than 15 months after being awarded the licence, demonstrating both the Company's operational efficiency and our commitment to the region. Initial testing operations concluded in May 2009. The Miran Field has been estimated to have oil-in-place of 3.4 billion barrels. Further testing on the Miran West-1 well indicated that it could produce at between 8,000-10,000 bopd.

We announced in April 2010, that the Miran West-2 appraisal well had intersected significant hydrocarbon-bearing intervals over approximately 1,800 metres within the Cretaceous formations. The well is now drilling down to the deeper Jurassic and Triassic exploration targets with the potential to contain substantial volumes of additional hydrocarbons.

Combined Code of Corporate Governance

We recognise our responsibility to shareholders for the Company's standard of governance and we also recognise the importance of maintaining responsible corporate governance practices. I am pleased to advise our shareholders that we have made further progress during the year to advance our adherence to the Combined Code on Corporate Governance published in 2008 (the "Combined Code").

In 2009, General Sir Michael Wilkes was appointed Senior Independent Director to comply with the Combined Code. His chief responsibility is to maintain sufficient contact with major shareholders to help develop a balanced understanding of their issues and concerns. In this role, General Sir Michael Wilkes is available to shareholders who have concerns that have not been, or cannot be, resolved through discussion with the Chairman, Chief Executive Officer or Chief Financial Officer or where such contact is inappropriate.

Other significant developments during 2009 and early 2010 included establishing a performance evaluation process for the Board and Board committees and for the Chairman, developing a formal framework for remuneration policy across the Company, confirming no annual bonuses would be paid to the Non-Executive Directors, undertaking an independent review of Executive Directors' remuneration, developing the Company's processes for reviewing key risks, internal controls and assessments, initiating processes for reviewing Director appointment and succession planning, establishing a Reserves Committee and establishing a CSR Committee.

Corporate Social Responsibility

We remain committed to adhering to our CSR policies and recognise the importance of engaging with local stakeholders at an early stage. The framework of our CSR policy has been refined through our experiences in Uganda where we have worked diligently with stakeholders to allay potential concerns arising from our activities and to address needs and requirements in a way that establishes a respected local reputation and identity for us. We believe that our active, ongoing involvement in community projects in Uganda and Kurdistan is fundamental in developing and maintaining strong relationships within these regions.

Outlook

Kurdistan remains a focus area for Heritage this year. As we continue with drilling on the Miran West structure and in the second half of the year plan to start exploration drilling on the Miran East structure, we expect to confirm the enormous potential of the Miran Block. 2010 will also bring to the fore a new set of projects and initiatives based on seismic and drilling campaigns in Malta and Pakistan scheduled for the second half of the year.

The Board believes that Heritage, with its technical and financial strengths, will continue to identify further attractive growth opportunities. The portfolio of assets within Heritage offers shareholders geographical diversification combined with a mix of exploration, development and production. This, together with a strong financial base, positions Heritage perfectly to pursue exciting opportunities.

Our management team has a track record of creating value for shareholders and holds a strong determination to continue that successful track record. Development of our Company could not have been achieved without the determination, commitment and dedication of our management team and our staff, together with contractors and suppliers. The Board thanks them all for their continued efforts and professionalism.

Michael J. Hibberd, Chairman

CHIEF EXECUTIVE'S STATEMENT

2009 saw further significant operational success and corporate developments in our core assets in Uganda and Kurdistan propelling Heritage forward into a new phase as we enter a new decade.

We are demonstrating the success of our strategy as a first-mover by the proposed monetisation of our Ugandan interests and are considering many new opportunities with the potential to generate value for our shareholders.

After reaching five-year lows, equity markets saw a recovery during 2009. Brent Oil prices moved up from the low of $36.40 per barrel in January 2009 to a high of $79.20 per barrel in November 2009 and the outlook for the oil and gas markets remains positive. Leading figures around the world acknowledge that demand for hydrocarbons will continue to increase as both populations and economies grow. Since much of the "easy oil" has already been discovered, it is frontier exploration that will be required to satisfy this growth. These areas often come with their challenges which we consider we are well equipped to manage through our experienced management and technical teams and our proven operating capability.

Uganda

At the beginning of 2009, we announced the successful Giraffe discovery in Block 1, Uganda, adding to our previous discoveries in the block, Warthog and Buffalo. Pressure and seismic data indicate that the Giraffe discovery is structurally connected to the Buffalo Field, creating a combined Buffalo-Giraffe Field covering approximately 48 square kilometres with an oil column of approximately 140 metres. This was a pivotal discovery that confirmed the viability of the Albert Basin as a commercial oil basin. The success of our multi-well programme, which began in October 2008, is evident with net contingent resources that have been estimated at 250 million barrels.

In February 2009, we completed the drilling of the successful Kingfisher-3A sidetrack well which appraised the Kingfisher discovery in Block 3A. This well intersected all three Kingfisher reservoir intervals encountered in the Kingfisher-1A and -2 wells. All three Kingfisher wells have been suspended as future producers.

Since discovering the Kingfisher Field in 2007, net contingent resources in Heritage operated Blocks 1 and 3A have been estimated at 355 million barrels with a value of $1.126 billion, based on a discount rate of 10%.

Kurdistan

Kurdistan remains a core area for Heritage. Since signing the licence in October 2007, we have shot seismic, drilled a discovery well on the Miran West structure and are currently drilling the Miran West-2 well. This is a huge achievement demonstrating our commitment to the region and confirming the high level of operational expertise within Heritage.

The Miran West-1 exploration well commenced drilling on 21 December 2008 and initial testing operations completed in May 2009. A gross oil bearing column of approximately 700 metres was discovered and the oil in place for the field has been estimated to be approximately 3.4 billion barrels with net combined contingent and prospective resources totalling approximately a billion barrels. Excellent recoveries, of between 50-70%, are expected from the fractured carbonate reservoirs, based on fracture porosity alone. During testing operations, concluded in August 2009, the Miran West-1 well flowed at a maximum rate of 3,640 bopd from a single reservoir interval.

We announced in April 2010 that the Miran West-2 appraisal well had intersected hydrocarbon-bearing intervals over approximately 1,800 metres within the Cretaceous formations. Three zones, determined from logging, within the Cretaceous formations have been identified for testing once drilling operations have completed.

The well is being deepened to approximately 4,600 metres to explore further potential in the underlying Jurassic and Triassic structures. These exploration targets have the potential to contain substantial volumes of additional hydrocarbons. We are planning to acquire 3D seismic over the Miran Block in the second half of 2010 to enable further appraisal drilling to encounter the fracture networks 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 we are looking to contract a rig for later this year.

Russia

The Zapadno Chumpasskoye Field is located in Western Siberia. Approval was received at the end of 2009 for a Field Development Plan to enable us to commence horizontal drilling to improve the recovery efficiency and also to enhance the economics of the field. The field was shut in for most of the first quarter of 2009 following a temporary reduction in domestic oil prices in Russia. After production restarted, measures were undertaken to increase output to the current production rate of approximately 650 bopd.

Financial and Corporate

With the disposal of the Oman operations in April 2009, oil production and revenue is now generated from the Zapadno Chumpasskoye Field in Russia. Heritage's net production decreased by 13% to an average of 329 bopd during 2009, compared to 2008, as a result of the field being shut in during early 2009.

During 2009, our liquidity was enhanced through two initiatives. Firstly, in April 2009, $28.4 million was realised through the sale of Eagle Energy (Oman) Limited ("Eagle Energy"). Secondly, in June 2009, 25.4 million new Ordinary Shares were placed successfully at a price of GBP 5.20 per share for total gross proceeds of $217 million.

In November 2009, we announced that a Letter of Intent ("LOI") had been signed with ENI International B.V. ("Eni") to sell our Ugandan interests for up to $1.5 billion. In December 2009 a Sale and Purchase Agreement ("SPA") was executed with Eni. Subsequently, Tullow Uganda Limited, our partner in the blocks, exercised its right of pre-emption on the same terms and conditions as agreed with Eni. In April 2010, we announced that we had received a letter from the Ugandan Government stating that it supports Heritage's sale and transfer of its Ugandan interests and that it will conclude its review of the transaction within eight weeks. Following this, Heritage expects to receive formal consent and to close the transaction shortly thereafter.

On completing the disposal we will have operations in seven countries and some of the disposal proceeds will be used to accelerate exploration, appraisal and development of these areas. Furthermore Heritage will have the financial flexibility to participate in opportunities to generate further value for shareholders.

Other 2010 Operations

Operations are planned to expand in Malta this year with the acquisition of 1,000 kilometres of seismic and the drilling of an exploration well. Heritage has already identified a number of large targets from over 3,500 kilometres of seismic acquired when the Company was awarded the Malta licences at the end of 2007.

In Pakistan, we are in the process of acquiring infill seismic in the Zamzama North Block. The current seismic database used to map the Zamzama North Block comprises some 750 kilometres of fair to good quality, 2D seismic. On the basis of this data we have mapped a number of structural leads. An exploration well is planned to be drilled in the second half of this year following interpretation of the current seismic programme.

Genel Enerji A.S.

In June 2009, Heritage announced that it had entered into a non-binding Memorandum of Understanding with Genel Enerji A.S. ("Genel") to acquire the entire share capital of Genel Energy International Limited ("Genel Energy"). In November 2009, after signing a LOI with Eni for the sale of our Ugandan interests, discussions with Genel were terminated before the terms of a definitive agreement had been settled.

Operating Capability

We are proud of both our environmental and safety records. We have continued our goal of pursuing operational excellence and have achieved the challenging goals set for last year. In addition, we have also maintained an excellent track record of no significant environmental issues. Last year's lost time incident frequency rate was well below industry average and was achieved at a time when Heritage's operational scope increased significantly.

Outlook

2010 is set to be another significant year for Heritage. We have never been stronger financially and we believe that we have a very valuable and prospective portfolio which will see high impact drilling in Kurdistan, Malta and Pakistan. Capital expenditures in 2010 are expected to be approximately $155 million, of which approximately $100 million will be allocated to exploration and appraisal activities and approximately $55 million to production and development activities.

In summary, 2010 promises to be a year of significant change for Heritage as we increase production, continue with high impact exploration and look for further exciting opportunities for our portfolio.

As always, I am very grateful to our talented management team and employees and supportive Board for their dedication and contribution to the remarkable progression made by Heritage this past year.

Finally, to our shareholders, thank you for your continued support and interest in Heritage.

Anthony Buckingham

Chief Executive Officer

FINANCIAL REVIEW

2009 saw several corporate developments leaving the Company with a strong balance sheet and financial flexibility for 2010.