STOCKS NEWS EUROPE-Heritage Oil hits two-year high on field news

Shares in Heritage Oil (Other OTC: HGOCF - news) rise to the highest level in more than two years on the back of positive production results from a Nigerian oil field.

The oil and gas company's stock has been performing well since the start of the year, with Wednesday's production update confirming its positive outlook and boosting shares further.

"Heritage Oil's share price has had a phenomenal performance since December with price performance driven by three events," Gerry Donnelly, equity analyst at FirstEnergy Capital, says.

"First (Other OTC: FSTC - news) , on the expectation of future dividend payment; second, more definitive guidance that the company could likely benefit from preferential tax status in Nigeria over the next 5 years; and thirdly we think the company is well primed to do other transactions in Nigeria," Donnelly says.

Heritage Oil's London-listed stocks were up 9 percent at 1120 GMT at 229.5 pence.

Heritage Oil said production from its OML 30 oil field in Nigeria was 17 percent higher than the previous year and output levels are expected to rise further as improvement work is planned.

"We expect further momentum, particularly if they can maintain production until the end of the year," said Donnelly.

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Reuters messaging rm://karolin.schaps.reuters.com@reuters.net