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Scl - Sacoil Holdings Limited - Reviewed Provisional Results For The Year

Release Date: 31/05/2012 14:00:04      Code(s): SCL
SCL - SacOil Holdings Limited - Reviewed provisional results for the year       
ended 29 February 2012                                                          
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" or "the Group")                                      
Reviewed provisional results for the year ended 29 February 2012                
Consolidated Statement of Comprehensive Income                                  
                                                 12 months          12 months   
to 29 February     to 28 February   
                                                      2012               2011   
                                  Notes            ZAR`000            ZAR`000   
Revenue                                          37 172 586         35 143 119  
Cost of sales                                  (26 569 161)       (23 615 391)  
Gross profit/(loss)                    4         10 603 425         11 527 728  
Operating costs                                (55 237 484)       (38 684 867)  
Loss from operations                           (44 634 059)       (27 157 139)  
Share based payment expense            5        (8 891 216)        (4 178 928)  
Net loss on derecognition of                                                    
intangible assets                      6       (83 446 480)                  -  
Other income                           6        219 138 297                  -  
Operating profit/(loss)                          82 166 542       (31 336 067)  
Investment income                      7         27 552 335          1 271 134  
Finance costs                          8       (44 123 631)           (17 309)  
Fair value adjustments                             (20 115)            427 447  
Profit/(Loss) before taxation                    65 575 131       (29 654 795)  
Current tax                         14.2       (61 485 300)                  -  
Deferred tax                        14.1       (93 823 463)           (95 200)  
Loss for the year                              (89 733 633)       (29 749 995)  
Attributable to:                                                                
Owners of the parent                           (95 506 424)       (29 749 995)  
Non-controlling interest                          5 772 791                  -  
                                              (89 733 633)       (29 749 995)   
Other comprehensive loss:                                                       
Gains and losses on property                                                    
revaluation                                       (340 000)          (340 000)  
Taxation related to components of                                               
other comprehensive income                           95 200             95 200  
Other comprehensive loss for the                                                
year net of taxation                              (244 800)          (244 800)  
Total comprehensive loss                       (89 978 433)       (29 994 795)  
Attributable to:                                                                
Owners of the parent                           (95 751 224)       (29 994 795)  
Non-controlling interest                          5 772 791                  -  
                                              (89 978 433)       (29 994 795)   
Reconciliation of headline earnings                                             
Loss for the year                              (95 506 424)       (29 749 995)  
Loss on sale of intangible asset                                                
attributable to owners of                                                       
the parent net of tax                            65 254 812                  -  
Headline loss                                  (30 251 611)       (29 749 995)  
Weighted average number of shares                                               
(`000)                                          717 411 053        449 628 622  
Diluted weighted average number of                                              
shares (`000)                                   721 553 230        482 933 132  
Basic loss per share (cents)           3            (13,35)             (6,62)  
Diluted loss per share (cents)                      (13,24)             (6,16)  
Headline loss per share (cents)        3             (4,22)             (6,62)  
Diluted headline loss per share                                                 
(cents)                                              (4,19)             (6,16)  
Consolidated Statement of Financial Position                                    
ASSETS                                                                          
Non-current assets                                                              
Property, plant and equipment                     6 148 362          6 644 269  
Intangible assets                      6        181 995 823        394 641 967  
Other financial assets               6,7        331 430 863         45 086 969  
                                               519 575 048        446 373 205   
Current assets                                                                  
Inventories                                       2 540 131          2 408 474  
Other financial assets                                    -         11 413 375  
Trade and other receivables            9         85 219 043          6 317 846  
Cash and cash equivalents                        10 774 298         17 898 834  
                                                98 533 472         38 038 529   
Total assets                                    618 108 520        484 411 734  
Equity and liabilities                                                          
Equity attributable to equity                                                   
holders of parent                                                               
Share capital                         13        486 184 423        374 029 488  
Reserves                                         29 743 531         29 988 331  
Accumulated loss                              (182 814 593)       (96 199 385)  
                                               333 113 361        307 818 434   
Non-controlling interest                        115 731 731        161 760 089  
                                               448 845 092        469 578 523   
Liabilities                                                                     
Non-current liabilities                                                         
Long term borrowings                   6         28 939 490                  -  
Deferred tax liability              14.2         93 728 263                  -  
Provisions                                        1 065 974            945 972  
                                               123 733 727            945 972   
Current liabilities                                                             
Foreign taxation payable            14.1         20 495 100                  -  
Other financial liabilities           12         12 496 195                  -  
Finance lease obligation                                  -             90 508  
Trade and other payables                         12 538 406         13 796 733  
                                                45 529 701         13 887 241   
Total liabilities                               169 263 429         14 833 213  
Total equity and liabilities                    618 108 520        484 411 735  
Number of shares in issue                       832 225 699        674 090 410  
Net asset value per share (cents)                     53,93              69,57  
Net tangible asset value per share                                              
(cents)                                               32,06              11,03  
Summarised Consolidated Statement                                               
of Cash Flows                                                                   
                                                  Reviewed           Reviewed   
                                                     Group              Group   
12 months          12 months   
                                            to 29 February     to 28 February   
                                                      2012               2011   
                                                   ZAR`000            ZAR`000   
Net cash from operating activities            (179 768 660)       (19 139 391)  
Net cash from investing activities              120 955 599       (57 130 923)  
Net cash from financing activities               51 688 525         87 171 285  
Total cash movement for the year                (7 124 536)         10 900 970  
Cash at the beginning of the year                17 898 834          6 997 863  
Total cash at end of the year                    10 774 298         17 898 833  
Consolidated Statement of Changes in Equity                                     
                                                                  Revaluation   
Notes     Share capital         reserve   
Balance at 1 March 2010                             83 725 538       2 300 547  
Changes in equity                                                               
Loss for the year                                            -               -  
Other comprehensive income for the year                              (244 800)  
Total comprehensive income for the year                      -       (244 800)  
Issue of shares                                    290 303 950               -  
Share options issued                                         -               -  
Non-controlling interests                                    -               -  
Total changes                                      290 303 950       (244 800)  
Balance at 1 March 2011                            374 029 488       2 055 747  
Changes in equity                                                               
Profit/(loss) for the year                                   -               -  
Other comprehensive income for the year                      -       (244 800)  
Total comprehensive income for the year                      -       (244 800)  
Issue of shares                                    112 154 935               -  
Share options issued                       5                 -               -  
Share options lapsed                       5                 -               -  
Dividends                                                    -               -  
Total changes                                      112 154 935       (244 800)  
Balance at 29 February 2012                        486 184 423       1 810 947  
                               Reserves for                                     
                                own shares/                                     
                                      Share                                     
repurchase           Total       Accumulated   
                                    reserve        reserves              loss   
Balance at 1 March 2010           23 753 656      26 054 203      (66 449 390)  
Changes in equity                                                               
Profit for the year                        -               -      (29 749 995)  
Other comprehensive income for                                                  
the year                                           (244 800)                 -  
Total comprehensive income for                                                  
the year                                   -       (244 800)      (29 749 995)  
Issue of shares                            -               -                 -  
Share options issued               4 178 928       4 178 928                 -  
Non-controlling interests                  -               -                 -  
Total changes                      4 178 928       3 934 128      (29 749 995)  
Balance at 1 March 2011           27 932 584      29 988 331      (96 199 385)  
Changes in equity                                                               
Profit/(loss) for the year                 -               -      (95 506 424)  
Other comprehensive income for                                                  
the year                                   -       (244 800)                 -  
Total comprehensive income for                                                  
the year                                   -       (244 800)      (95 506 424)  
Issue of shares                            -               -                 -  
Share options issued               8 891 216       8 891 216                 -  
Share options lapsed             (8 891 216)     (8 891 216)         8 891 216  
Dividends                                  -               -                 -  
Total changes                              -       (244 800)      (86 615 208)  
Balance at 29 February 2012       27 932 584      29 743 531     (182 814 593)  
Consolidated Statement of Changes in Equity                                     
                                     Total                                      
attributable to                                      
                            equity holders              Non-                    
                             of the Group/       controlling                    
                                   Company          interest     Total equity   
Balance at 1 March 2010          43 330 351                 -       43 330 351  
Changes in equity                                                               
Profit for the year            (29 749 995)                 -     (29 749 995)  
Other comprehensive income                                                      
for the year                      (244 800)                          (244 800)  
Total comprehensive income                                                      
for the year                   (29 994 795)                 -     (29 994 795)  
Issue of shares                 290 303 950                 -      290 303 950  
Share options issued              4 178 928                 -        4 178 928  
Non-controlling interests                 -       161 760 089      161 760 089  
Total changes                   264 488 083       161 760 089      426 248 172  
Balance at 1 March 2011         307 818 434       161 760 089      469 578 523  
Changes in equity                                                               
Profit/(loss) for the year     (95 506 424)         5 772 791     (89 733 633)  
Other comprehensive income                                                      
for the year                      (244 800)                 -        (244 800)  
Total comprehensive income                                                      
for the year                   (95 751 224)         5 772 791     (89 978 433)  
Issue of shares                 112 154 935                 -      112 154 935  
Share options issued              8 891 216                 -        8 891 216  
Share options lapsed                      -                 -                -  
Dividends                                 -     (51 801 149 )     (51 801 149)  
Total changes                    25 294 927      (46 028 358)     (20 733 431)  
Balance at 29 February 2012     333 113 361       115 731 731      448 845 092  
Notes to the Group Financial Statements for the year ended 29 February 2012     
1. Basis of preparation                                                         
The annual financial statements of the group for the year ended 29 February     
2012 have been prepared in accordance with the group`s accounting policies,     
which comply with International Financial Reporting Standards, IAS 34: Interim  
Financial Reporting, as well as the AC 500 standards as issued by the           
Accounting Practices Board or its successor, the Listings Requirements of the   
JSE Limited and the Companies Act of South Africa and are consistent with       
those of the previous period except for the adoption of IFRIC 19, amendments    
to IAS 24 and amendments to various IFRS standards. The adoption of these       
changes did not have a significant impact on the financial statements as        
reported.                                                                       
These financial statements have been prepared on a going concern basis.         
All monetary information is presented in the functional currency of the         
Company being South African Rand.                                               
2. Auditors` review report                                                      
The Group annual financial statements have been reviewed by Ernst & Young       
Inc., the Group`s auditors, and are the responsibility of the directors of the  
Company. They have been prepared under the supervision of the Group`s Finance   
Director, Carina de Beer CA(SA). The unqualified review report includes an      
"other legal and regulatory requirements" paragraph with respect to a           
reportable irregularity reported to the Independent Regulatory Board for        
Auditors in terms of section 45 of the Auditing Profession Act in relation to   
employees` tax that was not withheld by the Company and paid over to the South  
African Revenue Services. The error in the employees` tax withheld was due to   
an administrative oversight. The Company has already taken steps to rectify     
the oversight. The review report is available for inspection at the Company`s   
registered office.                                                              
3. Financial indicators                                                         
The Group reported a net asset value of 53.93 cents per ordinary share ("cps")  
(2011: 69.57), a net tangible asset value of 32.06 cps (2011: 11.03), basic     
loss of 13.35 cps (2011: 6.62) and a headline loss of 4.22 cps (2011: 6.62).    
The decrease in net asset value per share of 15.64 cps is largely attributable  
to a provision for deferred tax against profit and loss in an amount of R93.8   
million (11.26 cps). Refer to note 14.                                          
4. Greenhills                                                                   
The Company`s chemical processing plant in Mpumalanga, better known as          
Greenhills, increased sales by 6% whilst gross profit was negatively impacted   
by increased maintenance costs. With the shift of the Group`s focus to oil and  
gas, management is currently considering a number of alternatives in relation   
to the future of the plant.                                                     
5. Share-based payments                                                         
Share-based payments relate to 12 million call options issued to Renaissance    
BJM Securities Proprietary Limited (South Africa) ("Rencap") in relation to     
funding provided to enable SacOil to fulfil its obligations in relation to,     
inter alia, signature bonuses and farm in fees payable to the Nigerian          
Government on oil concessions OPL 281 and OPL 233. The average strike price of  
these call options was R1.46 and the call options expired at 29 February 2012.  
6. Block III, Albertine Graben, Democratic Republic of the Congo, divestment    
At 29 February 2012, SacOil owned 50 per cent of the issued capital of Semliki  
Energy SPRL ("Semliki"), which in turn holds the oil concession rights          
pertaining to Block III, Albertine Graben in the DRC ("the Block III Rights").  
SacOil and the other shareholder of Semliki, DIG Oil Proprietary Limited        
("DIG") (collectively "the Initial Shareholders"), have committed to transfer   
an aggregate 15 per cent shareholding in Semliki to the DRC government,         
leaving the Initial Shareholders with an effective 85 per cent interest in      
Block III before the implementation of the Agreement. In terms of the           
Production Sharing Contract signed on 4 December 2007 (the "Block III PSC"),    
within six months of the issue of Presidential Ordinance approving the Block    
III PSC, the partnership between South Africa Congo Oil Company (Proprietary)   
Limited and the DRC national oil company, Cohydro (collectively the "Block III  
Contracting Party") was required to transfer the rights held by the Block III   
Contracting Party under the Block III PSC to a locally incorporated company. A  
Presidential Ordinance approving the Block III PSC was issued in June 2010 and  
Semliki was established to hold the Block III Rights in November 2010.          
In March 2011, Semliki disposed of 60% ("Disposed Asset") of its 85% interest   
in Block III to TOTAL RDC ("Total") for a cash consideration of US$15 million   
and future contingent bonus payments of US$108 million. Upon disposal, Semliki  
derecognised that portion of the intangible asset that was disposed of. SacOil  
furthermore received cash proceeds in an amount of US$1.4 million (net of       
costs in relation to Block III) from DIG`s share of the cash consideration in   
full and final settlement of a loan advanced to DIG in respect of, inter alia,  
the Block III Rights.                                                           
The loss on derecognition of an intangible asset of R83.4 million represents    
the difference between the carrying value of the Disposed Asset and the fair    
value of the consideration receivable at the closing date of the transaction    
being 31 March 2011.                                                            
The farm in agreement between Semliki and Total provides for a cash payment by  
Total to Semliki upon the occurrence of certain future events ("Bonus"). As     
there is a contractual right to receive cash from Total, Semliki has            
recognised a financial asset on its statement of financial position. The asset  
is initially recognised at its fair value. Subsequently, the financial asset    
meets the definition of a loan and receivable, and is accounted for at          
amortised cost taking into account interest revenue and currency movements. At  
each reporting period SacOil revises its estimate of receipts from the          
financial asset in line with the requirements of IAS 39. Included in profit     
and loss is a re-measurement gain of R219 million. At 29 February 2012 the      
fair value of the financial asset is R263 million and the amount is included    
in other financial assets. A provision for deferred tax on the Bonus is         
explained in note 14.                                                           
Included in intangible assets is an amount of R130 million, being the value of  
Semliki`s share in Block III after derecognising the Disposed Asset, and        
including the carry cost portion detailed below.                                
The farm in agreement also provides for a carry of costs, payable by Total, on  
behalf of Semliki and constitutes a finance-type carried interest. Per the      
contract between Total and Semliki, Total shall be entitled to recover the      
accrued aggregate of the carried costs from Semliki`s share of future cost and  
profit oil. This arrangement is considered a secured borrowing in which the     
underlying asset is used as collateral.                                         
Semliki has therefore increased its investment in Block III with the carried    
costs as incurred up to the reporting date, together with a corresponding       
financial liability representing the amount owed to Total, in an amount of      
R28.9 million. A corresponding deferred tax asset in an amount of R11.6         
million was recognised in profit and loss. Refer note 14 for details. As at 29  
February 2012 the fair value of Semliki`s interest in Block 111 was R130        
million which is included in Intangible assets.                                 
7. Investment income                                                            
Interest income of R15.6 million was recognised in profit and loss in relation  
to a loan owed to SacOil by Energy Equity Resources Limited ("EER") in          
relation to capital costs paid by SacOil on behalf of EER with respect to oil   
concession blocks OPL 281 and OPL 233 in Nigeria. In terms of an agreement      
entered into between EER and SacOil ("Loan Agreement"), all acquisition costs   
paid by SacOil on behalf of EER bear interest at 25% calculated from the date   
of incurring such costs to the date of recovery.                                
The loan is repayable in three equal annual instalments, the first such         
instalment becoming due 60 business days after first oil production by taking   
that proportion of EER`s entitlement to petroleum that equals one third of the  
outstanding capital plus interest accrued. The second and third instalments     
will become payable on the same principle from EER`s subsequent entitlement to  
petroleum. The loan is secured by a cession and pledge over EER`s equity        
interests in both OPL 281 and OPL 233 in favour of SacOil. The loan in an       
amount of R66.2 million is included in other financial assets.                  
Also included in investment income is amortised interest in an amount of R13.4  
million recognised during the period under review in relation to the financial  
asset recognised on disposal of the Disposed Asset.                             
8. Finance costs                                                                
Included in finance costs is cash settlement costs of an equity conversion in   
an amount of R41.9 million in relation to a facility of US$30.9 million         
("Facility") provided to SacOil by Rencap. The management of SacOil elected a   
cash settlement of the equity conversion to avoid dilution of existing          
shareholders` interests in SacOil.                                              
9. Trade and other receivables                                                  
Included in trade and other receivables is an advance payment of R75.4 million  
made by SacOil in relation to an agreement whereby SacOil would be granted an   
exclusive right to negotiate a potential acquisition of certain material oil    
and gas concessions. Currently, constructive negotiations are in progress with  
all material stakeholders in relation to the potential acquisition, and         
clarification of the Company`s potential rights in relation to the agreement    
are on-going.                                                                   
In the event of a successful transaction which results in the Company           
acquiring an interest in potentially material oil and gas concessions, the      
payment may be converted to an intangible asset. In the event that a            
transaction is unsuccessful, there is a risk that SacOil may not be able to     
recover the payment but recourse to third parties will be open to the Company.  
At year end, there were no indicators that this receivable is impaired.         
10. Reclassification of Block III acquisition                                   
The purchase of SacOil Proprietary Limited in the 2011 financial year was       
disclosed as a business combination. On closer reflection, this is not a        
business combination, but rather an acquisition of an intangible asset (and     
related liabilities). The purchase was financed through an issue of shares by   
SacOil Holdings, and therefore constitutes an equity-settled share based        
payment transaction. The values attributed to this transaction remain           
unchanged, with the only impact of this reclassification relating to            
disclosures presented in the annual financial statements.                       
11. Specific issue of shares for cash                                           
Shareholders are referred to the announcement released on the Securities        
Exchange News Service ("SENS") of the JSE Limited ("JSE") and on the            
Regulatory News Service ("RNS") of the London Stock Exchange ("LSE") on         
Friday, 2 September 2011, regarding the specific issue of ordinary shares to    
Timtex Investments (Proprietary) Limited ("Timtex"), an associate of Encha      
Group Limited ("Encha") ("the Specific Issue").                                 
On Tuesday, 30 August 2011, Timtex signed an irrevocable undertaking to         
subscribe for 111 940 298 new SacOil shares at an issue price of 67 cents per   
share, being the closing price of SacOil ordinary shares on 29 August 2011,     
the day before Timtex signed the irrevocable undertaking. The issue price is    
at a premium of 8.06% to the 30 day volume weighted average price of SacOil on  
29 August 2011.                                                                 
12. Standby Equity Distribution Agreement                                       
On Wednesday, 12 October 2011 SacOil entered into a Standby Equity              
Distribution Agreement ("SEDA") of US$25 million ("Commitment Amount") with     
Yorkville Advisers UK LLP ("YA"), an exempt limited partnership registered in   
the Cayman Islands.                                                             
The SEDA is available, unless otherwise terminated earlier in accordance with   
its terms, for a period of three years, and the number and timing of each       
advance draw down ("Advance") is at the discretion of the Company provided      
that the Company shall not be entitled to draw down more than one advance       
every five trading days, unless otherwise approved by YA.                       
Limitations on the number of Advances as well as the quantum of the Advances    
ensures a spread of the drawdown amounts over a three year period. In           
spreading the drawdowns over three years, the dilution of existing              
Shareholders is also spread to avoid sudden dilution of existing Shareholders`  
interests in the Company.                                                       
Each Advance by the Company will be settled by the issue of new Ordinary        
Shares ("Ordinary Shares"). Any Ordinary Shares to be issued in relation to an  
Advance shall be listed on the JSE and admitted to trading on AIM. The number   
of Ordinary Shares to be issued in relation to an Advance shall be equal to     
the Advance amount divided by the purchase price, where the purchase price      
shall be 94% of the lowest of the daily volume weighted average prices of the   
Ordinary Shares of the Company during the period of five consecutive trading    
days beginning on the first trading day after the date of the Advance notice.   
At 29 February 2012 an amount of R12.5 million was owed to YA in terms of the   
SEDA. During the period under review SacOil issued 25 245 087 Ordinary Shares   
to YA.                                                                          
13. Stated capital                                                              
SacOil issued the following Ordinary Shares during the period under review:     
Date             Issued to         Nature of          Number of         Stated  
issue                 shares        capital   
Opening balance                                     674 090 410    374 029 488  
04-Apr-11        Rencap            Specific Issue       796 577      1 720 607  
08-May-11        AIM bonus shares  Specific Issue     9 042 215     19 350 341  
22-Nov-11        Timtex            Specific Issue   111 940 298     75 000 000  
13-Dec-11        YA                Specific Issue    14 318 181      6 300 000  
17-Jan-12        Peregrine                                                      
                Securities        General Issue     11 111 112      5 000 000   
08-Feb-12        YA                Specific Issue    10 926 906      4 783 988  
Closing balance                                     832 225 699    486 184 425  
14. Taxation                                                                    
14.1 Deferred tax                                                               
Included in the deferred tax liability is an amount of R105.4 million provided  
in relation to the contingent bonus payments of US$108 million as referred to   
in note 6 ("Bonus"). This amount was reduced by a deferred tax asset of R11.6   
million which is the estimated future tax benefit available to Semliki in       
relation to carried costs of US$3.8 million (R28.9 million) actually spent by   
Total on behalf of Semliki during 2011.                                         
In the DRC, in matters of capital gain tax, the global cost of oil rights       
transferred during the exploration period up to first investment date are       
deducted from the overall proceeds of the sale of oil rights, and the           
difference obtained will constitute the capital gain on which a tax of 40% on   
the transfer of interest would be levied.                                       
The current provision therefore excludes future costs to be carried by Total    
on behalf of Semliki up to First Investment Date, which costs could further     
reduce the value of the deferred tax liability once these costs have been       
incurred, and the resultant benefit is available to Semliki. The approved       
joint venture budget for 2012 is US$22 million.                                 
At 29 February 2012 the Company had unused tax losses not recognised as         
deferred tax assets of R94.2 million (2011: R43.8 million).                     
14.2 Current tax                                                                
Current tax includes R40.9 million (US$6 million) paid to the DRC government    
in relation to the cash consideration received from Total and dividend          
withholding tax of R20.5 million (US$3 million) in relation to dividends        
declared by Semliki.                                                            
15. Dividends                                                                   
The Board has resolved not to declare any dividends to Shareholders for the     
period under review.                                                            
16. Subsequent events                                                           
On 12 March 2012, Total acquired a further 6.66% effective interest in Block    
III from DIG, a shareholder in Semliki. Pursuant to the acquisition, Total`s    
holding in Block III increased to 66.66%, whereas SacOil`s effective interest   
remains unchanged at 12.5%, DIG`s holding reduces to 5.84% and the DRC          
Government retains 15.0%. As a result of this transaction, Semliki, a company   
incorporated in the DRC and through which SacOil and DIG own their interests    
in Block III, is now owned 68% by SacOil and 32% by DIG. 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.                
17. Segmental information                                                       
The Group`s business model has not advanced to a stage where accurate and       
meaningful segmental information can be presented. Currently, the only          
operation generating revenue is the Greenhills plant, which is a non-core       
asset. Sales for the year ended 29 February 2012 are as follows:                
                         Group                         Group                    
               12 months ended               12 months ended                    
29 February 2012     %        28 February 2011               %    
Export sales         20 709 650    58              20 233 436              58   
Local sales          16 462 936    42              14 919 683              42   
Total                37 172 586   100             35 143 119              100   
By order of the board                                                           
Melinda Gous                                                                    
Fusion Corporate Secretarial Services Proprietary Limited                       
Company secretary                                                               
Johannesburg                                                                    
JSE sponsor                            AIM nominated adviser and joint broker   
Nedbank Limited                        finnCap Ltd                              
CORPORATE INFORMATION                                                           
Registered office and physical address                      Postal address      
2nd Floor, The Gabba                                        PostNet Suite 211   
Dimension Data Campus                                       Private Bag X75     
57 Sloane Street                                            Bryanston           
Bryanston 2021                                              2021                
Contact details                                                                 
Tel: +27 (0) 11 575 7232                                                        
Fax: +27 (0) 11 576 2258                                                        
Email: info@sacoilholdings.com                                                  
Website: www.sacoilholdings.com                                                 
Advisers                                                                        
Company secretary: Fusion Corporate Secretarial Services Proprietary Limited    
Transfer secretaries South Africa: Link Market Services South Africa            
Proprietary Limited Transfer secretaries United Kingdom: Computershare          
Investor Services (Jersey) Limited Corporate legal advisers: Norton Rose South  
African and United Kingdom Auditors: Ernst & Young Inc.                         
Notes to oil and gas disclosure                                                 
In accordance with AIM Guidelines, Bradley Cerff, is the qualified person that  
has reviewed the technical information contained in this news release. Bradley  
has over 16 years` experience in the oil and gas Industry with Masters Degrees  
in Science and Business Administration focused on foreign direct investment in  
the African oil and gas industries. He is also a member of the Society of       
Petroleum Engineers.                                                            
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 to bring about a competitive advantage at the point  
of entry. SacOil`s primary strategic objective is the development, exploration  
and production of discovered assets, with existing or near-term production,     
cash and revenue potential.                                                     
SacOil is focussed on oil and, where there is a defined access to market, gas   
in proven hydrocarbon bearing basins. The Company seeks to build a portfolio    
of assets across the Exploration & Production ("E&P") spectrum from             
potentially high-impact exploration through to undeveloped discoveries with     
near-term cash flow potential and 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   
detailed as follows:                                                            
* in Block III DRC, 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 Nigeria, SacOil is in the process of evaluating and    
appraising oil discoveries through the reprocessing of seismic data with a      
view to drilling an appraisal well; remaining conditions precedent to the farm- 
in agreement include perfection of title and all the necessary Nigerian         
government and Nigerian National Petroleum Company (`NNPC`) consents in         
relation to the licence; and                                                    
* in OPL 233 Nigeria, the Joint Venture Committee consisting of SacOil, NIGDEL  
and EER is committed to acquiring 3D OBC seismic data, which should assist in   
evaluating the size of the existing oil discovery.                              
31 May 2012                                                                     
Date: 31/05/2012 14:00:03 Supplied by www.sharenet.co.za                     
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