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SCL - SacOil Holdings Limited - Entry into unincorporated joint venture

Release Date: 05/10/2010 09:45:01      Code(s): SCL
SCL - SacOil Holdings Limited - Entry into unincorporated joint venture         
agreement with Energy Equity Resources ("EER") and update on Farmout agreement  
in respect of the Chaal Gas Permit, Tunisia.                                    
SacOil Holdings Limited                                                         
Incorporated in the Republic of South Africa                                    
Registration number: 1993/000460/06                                             
Share code: SCL                                                                 
ISIN code: ZAE000127460                                                         
("SacOil" or "the Company")                                                     
Entry into unincorporated joint venture agreement with Energy Equity Resources  
("EER") and update on Farmout Agreement in respect of the Chaal Gas Permit,     
*    Strategic focus on production and near production oil and gas fields;      
*    Joint venture agreement with credible Nigerian local partner, EER; and     
*    Joint venture positioned to participate in the Nigerian divestment         
for producing and near term production (undeveloped discoveries) oil and gas    
fields.Strategic focus on production and near production oil and gas fields     
SacOil, the JSE listed Pan African independent upstream oil and gas company,    
has embarked on its strategy of seeking to acquire production and near          
production oil and gas fields on the African continent ("Production Assets").   
SacOil`s focus, in this regard, will be to target such Production Assets in     
established oil and gas production basins in Africa. Nigeria is the natural     
first stop given the long standing relations between Nigeria and South Africa.  
More specifically, Nigeria has many discovered but undeveloped oil and gas      
fields and there is active divestment of certain Production Assets by           
international oil companies ("IOCs") because of, inter alia, Nigeria`s          
Indigenisation Laws. To acquire Production Assets, SacOil needed a local        
Nigerian partner and SacOil is therefore pleased to announce its entry into     
an unincorporated joint venture agreement with EER.                             
Energy Equity Resources                                                         
EER is a Nigerian led and managed London based Pan African oil and gas company  
operating in Nigeria and Nigeria/Sao Tome joint development zone for over 7     
years. It has been involved in developing several assets in the region and      
worked with Shell, ExxonMobil, Chevron, Addax and Anadarko. EER has also worked 
with several independent and local oil and gas companies such as Afren Plc and  
Oriental Energy Resources Ltd.                                                  
EER has been involved in assisting the IOCs, host communities, the local and    
Federal government of Nigeria in finding a lasting solution to the issues in    
the Niger Delta. EER is run by professional and experienced Nigerian and        
International oil and gas industry experts and is owned by its management       
and some major United Kingdom institutional investors.                          
EER`s Chief Executive Officer, Osamede Okhomina says "in SacOil we have a       
corporate partner that shares our business and social objectives. Most          
importantly SacOil`s access to the South African capital market and deep        
institutional investor base would ensure that the joint venture has necessary   
access to funding that meets its aggressive expansion objectives."              
Robin Vela, Chief Executive Officer of SacOil, says "the Company is delighted to
form an association with EER because of its excellent track record and access to
near term production and producing fields in Nigeria. The arrangement with EER  
fits neatly with SacOil`s objective of working with credible local partners in  
the jurisdictions the Company looks to enter. EER maintains strong relationships
with the Nigerian authorities, host communities and IOCs operating in Nigeria.  
The joint venture`s envisaged initial transaction (in onshore Niger Delta) has a
recoverable contingent resource (P50) (as verified by an independent competent  
person) of a 100 million barrels of oil equivalent (mboe) and a potential to    
produce up to 30 000 barrels of oil per day.                                    
SacOil has a world class exploration interest in the Democratic Republic of     
Congo and produces manganese sulphate and oxide for the feed, fertiliser and    
chemical industries at its Greenhills plant in Mpumalanga, South Africa.        
Farmout Agreement in respect of the Chaal Gas Permit, Tunisia                   
Candax Energy Inc. ("Candax") has announced that according to the Journal       
Official de la Republique Tunisienne, the Chaal Permit (which covered an area   
of 1,200 km2, situated onshore central Tunisia approximately 50 km west of      
the city of Sfax) and in which Candax had a 60% working interest has been       
annulled.  Having requested a one year extension with the intention of testing  
the commerciality of the Chaal-1 gas discovery, Candax and its partners are     
in the process of considering their options in relation to this decision.       
Under the terms of the Farmout Agreement, details of which were included in     
the circular that was posted to SacOil shareholders on 4 September 2010,        
signed between Candax and the Company, Candax has until 31 January 2011         
to deliver a one year extension to their exploration permit and Tunisian        
Government consents to the Farmout Agreement.                                   
5 October 2010                                                                  
BDO Corporate Finance                                                           
Date: 05/10/2010 09:45:01 Supplied by www.sharenet.co.za                     
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