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Scl - Sacoil Holdings Limited - Performance Bond

Release Date: 17/04/2012 08:00:02      Code(s): SCL
SCL - Sacoil Holdings Limited - Performance Bond                                
SACOIL HOLDINGS LIMITED                                                         
(Incorporated in the Republic of South Africa)                                  
(Registration number 1993/000460/06)                                            
JSE share code: SCL     AIM share code: SAC                                     
ISIN: ZAE000127460                                                              
("SacOil" or "the Company")                                                     
17 April 2012                                                                   
Johannesburg                                                                    
USD$25 million Performance Bond approved to secure oil concession block OPL     
233 in Nigeria                                                                  
USD$10 million cash collateral to be put towards the work program as            
stipulated in the production sharing contract for oil concession block OPL 233  
Appointment of GMP Securities Europe LLP as joint broker                        
Performance Bond                                                                
SacOil is pleased to announce that it has successfully procured a USD$25        
million Performance Bond ("Bond"), which enables it to assist NIGDEL United     
Company Limited ("NIGDEL") to fulfil its obligations under the Profit Sharing   
Contract ("PSC") on oil concession OPL 233 in Nigeria ("the Concession"). The   
Bond is payable to the Nigeria National Petroleum Corporation ("NNPC").         
SacOil entered into a farm-in agreement with NIGDEL and Energy Equity           
Resources ("EER") dated 30 November 2010 under which SacOil and EER agreed to   
assist NIGDEL in the procurement of the Performance Bond as required under the  
PSC.                                                                            
The Bond, which was issued by Ecobank Nigeria PLC ("Ecobank"), was approved on  
the condition, inter alia, that cash collateral in the amount of USD$10million  
is delivered in favour of Ecobank. SacOil has now delivered the aforementioned  
cash collateral through a combination of debt and equity funding and            
accordingly the Bond was posted on 13 April 2012.                               
SacOil has provided EER`s 50 per cent share of the obligations under the Bond,  
secured against EER`s interest in the Concession. EER is obliged to repay to    
SacOil its 50 per cent share of the Bond together with interest and costs       
associated with the cash collateral and the procurement of the Bond prior to    
the commencement of an agreed work program on the Concession.                   
The successful posting of the performance bond allows the partners to proceed   
with the acquisition of up to 100 km2 Ocean Bottom Cable (OBC) 3D seismic       
survey.  Results of this survey are expected to enable the optimum placement    
of an appraisal well following the Olobia-1 oil discovery which, if             
successful, will be placed on an extended well test subject to NNPC and         
Department of Petroleum Resources ("DPR") approvals.  Production data obtained  
from the extended well test should enable a better estimate of recoverable      
resources and the optimal design of a full field development.  This would not   
only provide SacOil with the ability to book proved reserves, it would also     
provide cash flow to SacOil and its partners.  Results from the OBC survey are  
furthermore expected to provide information on additional prospective           
resources in the Concession which may enhance the value of the acreage and      
support continued exploration and appraisal activities.                         
Appointment of joint broker                                                     
The Company is also pleased to announce the appointment of GMP Securities       
Europe LLP as joint broker with immediate effect.                               
ENDS                                                                            
About SacOil                                                                    
SacOil is an African independent upstream oil and gas company, focused on       
African assets with a dual listing on the JSE and AIM. SacOil`s vision is to    
build a balanced hydrocarbon exploration and production portfolio using the     
Company`s African heritage as a competitive advantage at the point of entry     
where the primary strategic objective is the exploration, development and       
production of discovered assets, with existing or near term production, cash    
and revenue potential.                                                          
SacOil is focussed on oil and, where there is defined access to market, gas in  
proven hydrocarbon bearing basins. The Company seeks to build a portfolio of    
assets across the E&P spectrum from potentially "high impact" exploration to    
undeveloped discoveries with near term cash flow potential, and through to      
production with defined upside.                                                 
The Company is willing and able to operate through the exploration phase but    
will continue to focus on the establishment of strategic industry partnerships  
in order to maximise its opportunity set, manage portfolio risk and ensure      
that the optimum technical and operating skills are applied to each             
opportunity.                                                                    
Consistent with this strategy, SacOil has built up an E&P portfolio including   
oil discoveries in Nigeria and potentially high impact exploration in the DRC   
as follows:                                                                     
in Block III, through its partnership with Total, it is envisaged that the      
work program committed to will demonstrate prospectivity and eventually lead    
to oil production;                                                              
in relation to OPL 281, SacOil is in the process of evaluating and appraising   
oil discoveries through the reprocessing of seismic data with a view to drill   
an appraisal well; remaining conditions precedent to the farm in agreement      
include perfection of title and all the necessary Nigerian government and NNPC  
consents in relation to the licence;  and                                       
in OPL 233, SacOil is committed to acquiring 3D OBC seismic data, which should  
assist in evaluating the size of the existing oil discovery and the potential   
upside of the block.                                                            
JSE Sponsor                                                                     
Nedbank Capital                                                                 
For further information please contact:                                         
                                                                                
finnCap Limited (Nominated Adviser and          +44 (0)20 7220 0500             
Broker)                                                                         
Matthew Robinson / Christopher Raggett                                          
                                                                                

First Energy Capital (Joint Broker UK)          +44 (0) 20 7448 0200            
Majid Shafiq                                                                    
Travis Inlow                                                                    
GMP Securities Europe LLP (Joint Broker UK)     +44 (0)20 7647 2800             
Nick Morgan                                                                     
Chris Beltgens                                                                  
The Riverbed Agency (SA)                                                        
Raphala Mogase                                  +27 (0) 11 783 7903             
Pelham Bell Pottinger (UK)                                                      
Philip Dennis                                   +44 (0)20 7861 3919             
Nick Lambert                                    +44 (0)20 7861 3936             
Rollo Crichton-Stuart                           +44 (0)20 7861 3918             
Date: 17/04/2012 08:00:01 Supplied by www.sharenet.co.za                     
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