Heritage Oil will repay a $294 million loan to partner Genel Energy in the form of  the sale of a 49 percent stake in the Miran gas field in Iraq.

Heritage announced on Monday that the loan granted to it by Genel earlier this year had come up for repayment, and that said full repayment would occur through the divestment of Heritage’s remaining 49 percent stake in the field located in the gas-rich Kurdistan region of Iraq to the benefit of Genel.

Alongside the shareholding in the field itself, the repayment also sees Genel take the corresponding portion of the joint operating agreement relating to the Miran gas block.

Heritage owes the money as a result of a deal struck in August of this year which saw Genel take a stake in the Miran block, and also provide Heritage with $450 million – $249 million of which took the form of an exchangeable loan which would eventually come up for repayment by Heritage.

By the structuring of the loan and repayment method, Genel will now be the 100 percent owner of the Miran gas field.

However, the deal still requires approval by the shareholders of Heritage.

The divestment not only sees Heritage exit from the Miran project, but also marks a withdrawal by the company from Kurdistan and Iraq overall.  The timing of the withdrawal is such that Heritage will be able to focus its efforts on a new project under development in Nigeria.

Chief Executive Officer of Heritage Tony Buckingham told BusinessDay: “The divestment of our remaining 49 percent interest in Miran will allow Heritage to monetise the asset at an attractive valuation and the total proceeds will have funded a significant part of the completed acquisition of OML 30 in Nigeria.”