Heritage Oil to sell Ugandan fields to Italy's Eni

British oil exploration company Heritage Oil PLC said Monday it has agreed to sell its stakes in two Ugandan fields to Italy's Eni SpA for up to $1.5 billion.

Heritage said it had signed a binding letter of intent to sell its 50 percent share in the two fields in the oil-rich Albert Basin for $1.35 billion in cash and a deferred payment of $150 million in either cash or an interest in a producing oil field.

Eni said the acquisition was part of an its expansion in sub-Saharan Africa. It also has interests in Angola, Nigeria, Gabon, Mozambique and the Republic of Congo.

Heritage chief executive Tony Buckingham said the agreed sale recognized "the very large multibillion dollar investment which is required to develop the Albert Basin and the related infrastructure." Eni said the two blocks had the potential to produce 1 billion barrels of oil.

The deal requires approval from Ugandan authorities and is expected to be completed in the first quarter of 2010.

Heritage said that once the deal was completed it would consider a shareholder dividend in the range of 75 pence to 100 pence a share.

The company said that as a result of the agreement it had terminated talks over buying Turkey's Genel Energy International Ltd.

Heritage shares rose 3.5 percent to 525 pence ($8.70) Monday on the London Stock Exchange.