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SCL - Sacoil Holdings Limited - Operational update financial trading statement

Release Date: 31/05/2012 08:00:08      Code(s): SCL
SCL - Sacoil Holdings Limited - Operational update financial trading statement  
SACOIL HOLDINGS LIMITED                                                         
(Incorporated in the Republic of South Africa)                                  
(Registration number 1993/000460/06)                                            
JSE share code: SCL                                                             
AIM share code: SAC                                                             
ISIN: ZAE0000127460                                                             
("SacOil" or "the Company" or "the Group")                                      
31 May 2012                                                                     
OPERATIONAL UPDATE                                                              
FINANCIAL TRADING STATEMENT (JSE)                                               
1.   Operational Update                                                         
1.1  Block III, Albertine Graben, Democratic Republic of the Congo ("Block      
At the end of 2011, Total, the Block III operator, completed the acquisition    
and interpretation of a satellite imagery survey over the entire concession.    
The processing of the satellite imagery reaffirmed the exploration potential    
of the entire Block III and therefore it was decided to commit to an airborne   
geographical survey over the whole concession. In preparation for the           
exploration programme, environmental and social studies were also successfully  
For the 2012, a budget of US$30 million was approved by the joint venture,      
which would include the above mentioned acquisition of an airborne gravity      
magnetic survey over the entire block by Q3 2012, following which a 2D seismic  
survey will be designed and planned. The operator`s current intention is to     
use a similar exploration approach to that of the immediately adjacent          
concession (the prolific Blocks I, 2 & 3 in the Ugandan territory of Lake       
Albert) which proved highly successful.                                         
In Q1 2012, Total increased their equity interest by acquiring a further 6.66%  
interest in Block III from DIG Oil to give Total a new total effective 66.66%   
interest in Block III. SacOil`s effective interest of 12.5% and its             
entitlement to contingent cash bonuses of US$54 million and a carry on all      
exploration expenses up to final investment decision (when a development plan   
is approved) remain unchanged.                                                  
1.2  OPL 281 Nigeria                                                            
SacOil and its partners, Energy Equity Resources and Transcorp are awaiting     
the final award of the OPL 281 Production Sharing Contract (PSC) and            
perfection of title. The intention is that following award, modelling and       
planning of the reprocessing of the existing 3D seismic data will commence.     
OPL 281 is a former Shell permit. There are 2 discovery wells on the            
concession which intersected Hydrocarbon accumulations, which has been          
attributed 99.2 mboe of gross contingent resources by TRACS International, a    
top tier Oil & Gas industry competent firm. Deeper prospects have been          
identified by the block`s technical team that may contain further hydrocarbon   
The concession is located near to existing off-take infrastructure and as       
such, early monetisation post the successful drilling of a well would be        
1.3  OPia                                                                       
SacOil successfully posted a US $25 Million Performance Bond (the "Bond") at    
the end of Q1 2012 as part of fulfilling its obligations under the Joint        
Venture and Production Sharing Agreements (PSC). The OPL 233 joint venture has  
completed the interpretation and evaluation of the existing seismic and well    
data on the block. In addition, the modelling and planning of a 3D Ocean        
Bottom Cable (OBC) Survey was completed and finalised in Q1 2012. In            
preparation for the 3D seismic acquisition, the joint venture partners are in   
the process of finalising the seismic contractor assessments and engagements    
for this acquisition.  Immediately after this contract award, which we expect   
imminently, acquisition and processing will commence, leading to what is        
anticipated to be the citing of an optimal well location. The US$10 million     
cash collateral provided by SacOil as part of the Bond fully funds the 3D       
seismic acquisition and interpretation.                                         
The commencement of an extended well test, booking of reserves and generation   
of cash flow may occur before the end of 2013.                                  
Growth Strategy                                                                 
As previously stated, the Company, being in its growth phase, is continuously   
evaluating and assessing acquisition opportunities to move closer to booking    
of reserves, production and cash flow generation. SacOil is currently under a   
cautionary announcement in terms of the JSE Listings Requirements as it is in   
the process of considering various proposals and potential transactions.        
Early in 2012 and as part of the growth strategy of the business, the Company   
was delighted to strengthen its technical management team by bringing on board  
Willem de Meyer as Vice President - Commercial and Jordaan Fouche as Vice       
President - Technical and New Business. Both Willem and Jordaan have,           
individually, in excess of 25 years` experience in the Oil & Gas Industry and   
having worked on the investment side in recent years, bring proprietary         
potential deal flow to the company.                                             
2.   Trading update                                                             
As part of the JSE Listings Requirements, companies are required to publish a   
financial trading statement as soon as they are reasonably certain that the     
financial results for the current reporting period will be more than 20%        
different to that of the prior corresponding period. Given the nature of        
SacOil`s business, which requires lump sum upfront capital investment, it is    
not unusual for there to be significant changes in the financial results from   
one period to another. As such SacOil expects:                                  
*    basic loss per share for the year ended 29 February 2012 to be between     
    6.12 cents and 7.34 cents per share higher than the prior comparative       
    period; and                                                                 
*    headline loss per share for the year ended 29 February 2012 to be between  
2.18 cents and 2.62 cents per share lower than the prior comparative        
The above information has not been reviewed or reported on by the Group`s       
auditors, Ernst & Young, and the Group`s results for the year ended 29          
February 2012 will be published on 31 May 2012.                                 
JSE Sponsor                                                                     
Nedbank Capital                                                                 
For further information please contact:                                         
finnCap Limited (Nominated Adviser and         +44 (0)20 7220 0500              
Matthew Robinson / Christopher Raggett                                          

FirstEnergy 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: 31/05/2012 08:00:08 Supplied by www.sharenet.co.za                     
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information disseminated through SENS.                                          

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