Heritage Oil has entered into a non-binding Memorandum of Understanding with Genel Enerji (a 56% subsidiary of Cukurova in Turkey) to create a new integrated oil company with activities in two core areas: Kurdistan and Uganda. The MoU is subject to various conditions and execution of binding documentation to acquire Genel Energy International, a private independent oil and gas exploration and production company, which holds licences in the Kurdistan Region of Iraq. The proposed acquisition would be paid for wholly in new shares of Heritage and would result in Genel shareholders owning approximately 50% of the enlarged ordinary share capital of Heritage. Heritage will issue 260 million ordinary shares, constituting 100% of the current issued share capital of Heritage, in exchange for acquiring the entire share capital of Genel. It is anticipated that following the Proposed Acquisition, the Company, as enlarged by the acquisition of Genel will be re-named HeritaGE Oil plc. Genel has interests in two producing oil fields, being the joint operator of the Taq Taq field holding a 55% working interest (44% participating interest) as well as having a 25% working interest in the Tawke field. Genel also owns the right to develop the Taq Taq Petroleum Refinery. This refinery in Kurdistan is primarily being built through the phased construction and operation of a 60,000 bbl/d refinery in the vicinity of the Taq Taq and Miran oil fields. The phased construction of the refinery is expected to be completed by 2012 with 40,000 bbl/d expected to be operational in 2011. Net production to the Enlarged Group from Kurdistan is currently approximately 30,000 bbl/d and is estimated to be around 43,000 bbl/d by year end 2009.