DAR ES SALAAM (Reuters) - Canada’s Heritage Oil Corporation said on Monday Tanzania has allowed it to farm in four exploration licenses held by two other companies in the East African country.

A farm-in agreement allows a company to transfer part of its stake in an exploration area in exchange for its expenditures being borne by another company.
Heritage, which is also listed in London, said Tanzania had permitted it to farm-in the Kisangire license, an onshore exploration area covering 7,280 square km held by Dominion Petroleum Limited, and Lukuliro, another onshore exploration area of 8,828 square km also held by Dominion.
“Under the terms of the farm-in agreement with Dominion, Heritage initially has the right to earn a working interest of 55 percent in the Kisangire and Lukuliro licenses,” Heritage said in a statement posted on its Web site.
“In order to earn the working interests, Heritage will fund all costs to acquire a minimum of 150 kilometres of 2D seismic data and drill the first commitment well.”
Dominion signed a production sharing agreement (PSA) in 2005 that included a four-year exploration period followed by an extension of four years, a further extension of three years and the right to a development license with a term of 25 years.
Heritage said it had an option to get an additional 15 percent working interest, which would raise its participation in the license areas to 70 percent, by bearing 87.5 percent of the costs of drilling a second well.
The Canadian company said it also had received approval to farm-in the Latham and Kimbiji licenses, held by UK-based Petrodel Resources Ltd. The two areas cover a combined 9,354 square km onshore, near shore and in deep water.
Heritage said the deal with Petrodel gave it the right to earn a 70 percent working interest in Kimbiji and a 29.9 percent working interest in Latham in exchange for paying all seismic costs for the initial exploration periods on the two licenses.
The agreement also requires Heritage to drill two exploration wells on Kimbiji.
Petrodel won its PSA for Latham and Kimbiji in 2006, getting an initial four-year exploration period. The company is allowed to seek extensions of four years for Latham and three years for Kimbiji, and the right to a development license with a term of 25 years.
“Heritage will act initially as contract operator, being responsible for all technical and operational aspects of the work programs and will be appointed operator upon drilling the second exploration well in the Kimbiji license ,” it said.
Tanzania has about 15 companies involved in exploration.