* Company on hunt for acquisitions in Nigeria
* OML 30 output averages 20,000 bpd since acquisition
* CFO says 2013 year end target of 58,000 bpd unchanged
By Sarah Young
LONDON, April 30 (Reuters) - Britain’s Heritage Oil is looking for further acquisitions in Nigeria, months after switching its main focus to the problematic Niger Delta region where performance of its field has to date been erratic.
Last year, Jersey-based FTSE 250 company Heritage bought into a Nigerian oilfield which had been owned by oil major Shell in a $850 million deal, and sold out of a gas field it found in Kurdistan.
“We are looking to expand the footprint in Nigeria without question. We are in discussions with parties,” Chief financial officer Paul Atherton said in an interview on Tuesday, declining to name the parties.
The company, which made its name with big oil finds in Uganda that it has now also sold, is under pressure to almost triple production at the Nigerian field, named OML 30, by the end of the year after strikes affected its performance to date.
The Niger Delta, heartland of Africa’s biggest oil and gas industry, is prone to bouts of unrest and riven by militant factions and widespread oil theft to date this year has caused the country’s oil production to fall well below expectations.
Heritage’s strategy in Nigeria is to raise production at fields like OML 30, those too small to be significant to companies like Shell, by investing in equipment and drilling, and improving community relations.
Calling OML’s output since the acquisition “varied”, Atherton said the year end production goal was unchanged, but conceded there were teething troubles.
Output from OML 30 has averaged 20,000 barrels of oil per day (bpd) since the acquisition, Heritage said on Tuesday, lower than the 36,000 bpd level recorded last November and way off the 58,000 bpd level production target Heritage has for the end of the year.
“It’s a new group, a new operator, obviously people have to get their feet under the desk,” Atherton said.
Shares in the company dipped 2.5 percent in mid-morning, paring earlier losses of as much as 5 percent, which analysts attributed to what they saw as a lower than expected production figure.
Production, which has gone as high as 43,000 bpd since Heritage’s acquisition in November, has suffered due to the strike by local workers as well as a pumping system failure.
Royal Bank of Canada analyst Al Stanton said the production figures raised questions over Heritage’s ability to influence operations at OML 30, where the company through its Nigerian unit is junior partner to state-run Nigeria National Petroleum Corporation.
Atherton said production would improve due to a ramp up in maintenance and the installation of new pumps, plus the positive impact of the social programmes which the company is putting in place in local communities.
Heritage, founded by Tony Buckingham, a former North Sea diver who went on to provide mercenary fighters in Africa when he was a partner in the military contracting firm Executive Outcomes, formed a joint venture with Nigeria-based Shoreline with the aim of taking advantage of Nigeria’s plan to indigenise its oil industry.
“We’ve stated our intention is to be one of the leading indigenous oil companies (in Nigeria) so therefore we are looking at some very large transactions,” said Atherton, adding that the company was also considering acquisitions elsewhere in Africa.