Go Back Email this Link to a friend


Sacoil Holdings Limited - Preliminary Audited Results For The Year Ended 28 February 2015

Release Date: 21/05/2015 09:45:00      Code(s): SCL     
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")


PRELIMINARY AUDITED RESULTS FOR THE YEAR ENDED 28 FEBRUARY 2015


HIGHLIGHTS
-  Implementation of revised business strategy
-  Acquisition of an oil-producing asset in Egypt
-  Portfolio rationalisation - exit from OPL 281 and OPL 233 in Nigeria
-  Settlement agreement related to EERNL loans
-  Strong cash balance
-  Resolution of going concern issue
-  Group repositioned for sustainable growth


OVERVIEW
This past financial year has seen the SacOil Board embark on a turnaround strategy 
driven by the rationalisation and balancing of the Group's existing portfolio of assets. 
The intention of the turnaround strategy was to ensure that the future business 
activities of the Group are focused on exploration and production, with an income-
producing asset. The activities undertaken as part of this exercise to reposition the 
Group were:

-  the acquisition by the Group of an oil-producing asset in Egypt;
-  the Group's exit from OPL 281 and OPL 233 in Nigeria; and
-  the restructuring of the debt owed to the Group by Energy Equity Resources Norway 
   Limited ("EERNL").

The Group reported a loss of R277.0 million (2014: profit of R9.5 million), basic loss 
per share of 8.54 cents (2014: earnings per share of 1.37 cents) and headline loss per 
share of 4.67 cents (2014: headline earnings per share of 1.37 cents), for the year 
ended 28 February 2015. This was almost entirely attributable to the other operating 
costs of R510.1 million (2014: R100.2 million). These operating costs were primarily 
a result of the above transactions undertaken to rationalise the Group's portfolio of 
assets and to restructure the EERNL loans to position the Group for sustainable growth. 
The Group's loss for the year was partially off-set by the investment income generated 
by it and foreign exchange gains on translation of financial assets arising from the 
continued weakening of the Rand.

The reported Group loss for the year, however, needs to be viewed in the light of the 
Company being released from the significant capital commitments related to OPL 233 and 
OPL 281 that contributed to the resolution of the material uncertainty related to the 
going concern of the Group, as previously reported. In addition, the above actions will 
result in the Group's cash balances of R229.4 million, including restricted cash of 
R116 million, benefiting from the restricted cash, related to the cash collateral, being 
released to the Company on the expiry of the performance bond on OPL 233 and the receipt 
of $12.5 million plus interest from Transcorp related to the OPL 281 exit.

The Group is now in a strong position to further expand its business activities, 
supported by a strong cash position, in line with its new strategy that is focused on 
income-producing activities. The Group is also better positioned to see through the 
challenging conditions in the industry and should benefit from the opportunities that 
will become available for acquisition or investment.

Dr Kgogo, the Chief Executive Officer, says, "The changes undertaken in the business 
in the financial year were critical to reset the business for sustainable growth in the 
future and address the legacy issues that have hampered our future prospects. We see 
SacOil's new strategy driving increased shareholder value in the near term, with 
Lagia development activities progressing well to achieve our target of 1 000 barrels 
by Q4 2015. Our focus will remain on finding other attractive income-producing or 
near-term producing assets for the Group. I look forward to being part of building a 
stronger and more profitable SacOil." 

ACQUISITION OF AN OIL-PRODUCING ASSET AT LAGIA
On 22 October 2014 the Group acquired Mena International Petroleum Company Limited 
("Mena") which owns the producing Lagia Oil Field for R151.7 million ($14.1 million), 
settled by a cash payment of R45.2 million ($4.1 million) and the issue of ordinary 
shares in SacOil for R106.5 million ($10.0 million). The acquisition of Mena was part 
of the Group's revised strategy to restructure the portfolio and allows the Group to 
report its first oil revenue and producing asset. Lagia is a low-cost producing asset 
with good development opportunities. 

Mena's contribution to revenue in the current financial year is minimal at R2.1 million. 
This is as a result of reporting only three months' results since the acquisition date, 
which was further impacted by the development plan in progress. Consequently Mena 
contributed a loss before taxation of R8.6 million to the Group's overall results. 
The turnaround of this asset should contribute well to the Group's revenue and earnings 
going forward.

The impact of the Mena acquisition on the Group's results at 28 February 2015 is the 
addition of the first producing oil and gas assets of R122.9 million. Furthermore, the 
acquisition increased other intangible assets by R60.9 million for the right to drill 
for petroleum reserves, inventory of R6.6 million, trade receivables of R6.6 million 
and cash of R4.5 million. Mena's results are reported in the Egypt segment in note 3.

FINANCIAL PERFORMANCE
Other income
Foreign exchange gains increased in the current financial year by R31.2 million to 
R78.6 million (2014: R47.4 million), due to the continued weakening of the Rand against 
the US Dollar. Foreign exchange gains arose on translation of the US Dollar denominated 
cash collateral, the contingent consideration receivable and loans advanced to our 
partners, EERNL and Divine Inspiration Group Private Limited ("DIG"). 

Also contributing to the increase in other income is the gain of R24.7 million on 
acquisition of Mena. Mena's net assets at acquisition date exceeded the purchase price 
paid by the Group that reflects the underlying value contributed to the Group. 

Other operating costs
Portfolio rationalisation and restructuring of EERNL loans
Other operating costs reflect the impact of the Group's portfolio rationalisation and 
restructuring of the EERNL loan. Other operating costs totalling R420.2 million 
(2014: R37.9 million) were incurred as follows:

OPL 233
OPL 233 was reclassified as an asset held for sale at 28 February 2015 following the 
Board's commitment to terminate its participation in the asset. Pursuant to the 
termination the underlying value of the asset represents an amount to be recovered 
from Nigdel under the terms of the Farm-In Agreement ("FIA"). The asset has been 
impaired by R194.1 million following management's assessment of the recoveries from 
Nigdel. The outcome of the termination negotiations with Nigdel which are currently 
ongoing may result in a reversal of part of this impairment in future. The Group will 
inform shareholders of the progress on these discussions as soon as there is certainty 
on the outcome.

EERNL loan settlement 
As announced on 8 April 2015 SacOil and EERNL entered into a settlement agreement to 
restructure the settlement terms of the loans owed to the Group by EERNL for activities 
related to OPL 281 and OPL 233. 

OPL 281
Following the termination of the Group and EERNL's participation in OPL 281, 
R220.8 million is due to SacOil and EERNL from Transcorp ("Transcorp Refund") under 
the terms of the Farm-In Agreement. In settlement of the loan relating to OPL 281 
EERNL elected to off-set its 50% share of the Transcorp Refund, representing the loan 
initially advanced, as full and final settlement of the loan outstanding of R183.3 million. 
Consequently R73.2 million was written off by the Group with respect to this loan.

OPL 233
The settlement terms of the loan of R286.4 million advanced by SacOil to EERNL with 
respect to OPL 233-related activities provide for the recovery of this loan as follows:

-  from EERNL's share of the cash collateral, representing the loan initially advanced;
-  from EERNL's share of Oil Mining Licence 113 ("OML 113") future cash flows; and
-  from EERNL's share of amounts to be recovered from Nigdel following the termination 
   of participation in OPL 233. 

The Group expects that it could recover R221.0 million from these sources. Consequently 
R65.4 million has been written off as a bad debt with respect to this loan. An amount 
of R125.4 million (2014: R37.9 million on interest receivable) has been provided 
against the EERNL loan as doubtful based on the uncertainty of the outcome related to 
the OPL 233 recovery from Nigdel. The increase in the provision for impairment of 
R87.5 million has been expensed under other operating expenses.

Contingent consideration
The operations on Block III were temporarily suspended for most of the financial year 
due to the civil unrest in the north east of the DRC, resulting in delays of the work 
programme by a year. Consequently the contingent consideration receivable from the 
2011/2012 farm-out of Block III has been impaired by R23.8 million (2014: R22.1 million), 
representing the impact of the time value of money on expected future cash flows on the 
contingent consideration receivable.

General costs
The remainder of other operating costs increased by R25.9 million to R66.1 million 
(2014: R40.2 million) primarily due to Mena's operating costs R7.4 million (2014: RNil) 
in the period, once-off acquisition costs of Mena of R8.7 million (2014: RNil) and 
business development costs of R2.4 million (2014: RNil).

Investment income
The increase in investment income is primarily attributable to the interest on the 
Transcorp Refund of R29.6 million (2014: RNil), and the interest of R7.0 million 
(2014: R0.9 million) on the Group's cash and cash equivalents. The interest on loans 
to EERNL contributed R92.3 million (2014: R103.0 million), which has increased the 
EERNL financial asset, and interest on other financial assets contributed R29.2 million 
(2014: R26.7 million) to the Group's investment income.

Finance costs
The Group's finance costs of R0.001 million are minimal in the current financial year 
(2014: R12.9 million) following the settlement in the prior year of the Group's debt 
obligations.

FINANCIAL POSITION
Exploration and evaluation assets ("E&E assets")
The decrease in E&E assets is reflective of the portfolio rationalisation undertaken 
by the Group. Prior to the termination of its participation in OPL 233 and OPL 281 the 
Group invested R68.8 million (2014: R103.6 million) in OPL 233 for the seismic survey, 
and general and administrative ("G&A") expenses. The Group further invested R0.3 million 
in Block 1 in Malawi (2014: R0.4 million in the Botswana assets). As noted under other 
operating costs OPL 233 was subsequently reclassified as an asset held for sale, 
resulting in a decrease of R215.9 million in E&E assets. The cost of OPL 281 of 
R44.1 million, previously reported, was off-set against the Transcorp Refund, pursuant 
to the termination of participation in the asset and treated as a disposal in terms 
accounting standards.

Other financial assets
The increase of R21.5 million in other financial assets (non-current and current) is 
primarily attributable to the Transcorp Refund of R220.8 million (2014: RNil), foreign 
exchange gains of R52.6 million (2014: R106.4 million) on US Dollar denominated balances 
and interest of R121.5 million (2014: R167.8 million) on the EERNL loan, contingent 
consideration, advance payment against future services and Greenhills receivable, 
off-set by:

-  the EERNL loan settlement of R183.3 million (2014: RNil), bad debt expense of 
   R65.4 million (2014: RNil) and increase in impairment provision of R87.5 million 
   (2014: R37.9 million) as detailed under other operating expenses;
-  the impairment of the contingent consideration receivable of R23.8 million 
   (2014: R22.1 million), also detailed under other operating expenses; and 
-  the part settlement by EERNL and Greenhills of R13.4 million (2014: R14.8 million) 
   against amounts outstanding.

Cash and cash equivalents and cash flows
The Group's cash and cash equivalents decreased by R152.2 million to R229.4 million 
(2014: R381.6 million) during the year under review, largely due to:

-  expenditure on the OPL 233 seismic survey and G&A costs of R68.8 million;
-  Mena acquisition and transaction costs totalling R45.2 million and R8.7 million, 
   respectively; 
-  development cost of R18.6 million relating to the Lagia oil field; and
-  expenditure on the Group's operating costs of R24.3 million.

The Group's cash inflows benefited from the part repayments of the EERNL and Greenhills 
debt of R13.4 million.

The Group's cash and cash equivalents at 28 February 2015 comprise the restricted cash 
related to the cash collateral of R116.0 million (2014: R108.1 million) ($10.0 million), 
short-term deposits of R106.7 million (2014: RNil) and bank balances of R6.7 million 
(2014: R273.5 million).

Total shareholders' equity
The Company's stated capital increased by R106.5 million to R1.216 billion 
(2014: R1.110 billion), representing the shares issued for the acquisition of Mena.

The loss attributable to equity holders of the parent for the year of R269.2 million 
(2014: profit of R19.6 million) contributed to the increase in accumulated losses to 
R448.6 million (2014: R179.4 million).

The Group's reserves increased by R9.6 million to R15.6 million (2014: R6.0 million) 
due to share-based payment expenses of R0.9 million (2014: RNil) and foreign exchange 
gains on the translation of Mena operations of R8.7 million (2014: RNil).

The total shareholders' equity has decreased from R948.8 million to R787.9 million, 
which represents a 17% decrease in the current year due to the Group's activities in 
the year.

Deferred tax liability
The increase of R4.6 million in the deferred tax liability to R97.1 million 
(2014: R92.5 million) primarily arises from the estimated future contingent 
consideration receivable. 

Other financial liabilities
The decrease in other financial liabilities primarily reflects liabilities due to Nigdel 
reclassified as liabilities directly associated with assets held for sale of R21.8 million.

Current tax payable
Tax payable increased by R35.6 million (2014: R82.9 million) due to interest on taxes 
outstanding of R23.6 million (2014: R21.4 million) and foreign exchange losses of 
R13.1 million (2014: R47.5 million), off-set by a prior-year tax overprovision of 
R1.1 million (2014: charge of R14.0 million). The foreign taxes are denominated in US Dollars.

CONTRACTUAL COMMITMENTS
The Group's commitments have decreased by R684.5 million (2014: increase of R308.0 million) 
following the termination of the Group's participation in OPL 233 and OPL 281.

GOING CONCERN
The last published results of the Group highlighted uncertainties which cast doubt on 
the Company's ability to continue as a going concern. The Board is pleased to inform 
shareholders that these uncertainties have been resolved. The portfolio rationalisation 
undertaken by the Group had the effect of eliminating onerous future commitments on 
OPL 233 and OPL 281 and resulted in the improvement in the Group's projected future 
cash flows consequently addressing the legacy going concern issue. Further strengthening 
the Group's future cash flows are the Mena future cash flows, Transcorp Refund and the 
release of the cash collateral which previously secured the OPL 233 performance bond. 
The Group will continue to secure other sources of funding to ensure the Group's 
existing assets and expansion plans are adequately funded on a sustainable basis.

The preliminary financial statements are presented on a summarised basis.

PROSPECTS
The restructuring of the Group's portfolio of assets and the resolution of legacy 
issues has positioned the Group to pursue more opportunities on the African continent. 
In the execution of our revised strategy we will be adding more cash-generative assets, 
advancing our exploration assets and progressing studies in Mozambique. We intend to 
progress the development of the Lagia Oil Field and increase production to more than 
1 000 barrels per day. Management will continue to focus on risk management across 
our portfolio. 

CHANGE IN DIRECTORATE
The following changes to the Board occurred during the year under review:

-  Roger Rees resigned from the Board of SacOil on 31 May 2014;
-  Dr Thabo Kgogo was appointed to the Board of SacOil on 1 June 2014 in his capacity 
   as the CEO;
-  Bradley Cerff was appointed to the Board of SacOil on 11 August 2014 in his capacity 
   as the Executive Director: Operations;
-  Tariro Mudzimuirema, the interim Finance Director, resigned from the Board on 
   31 January 2015; and
-  Damain Matroos was appointed to the Board of SacOil on 1 February 2015 in his 
   capacity as the Finance Director.
-  Ignatius Sehoole is now classified as an independent Non-executive Director.

LITIGATION
Joseph Modibane
The Company previously reported on two actions instituted by Joseph Modibane 
("Mr Modibane") in the North Gauteng High Court. In the first action, Mr Modibane alleged 
that he was entitled to receive 105 000 000 SacOil Shares at an issue price of 30 cents 
per SacOil share but that the Company unlawfully declined to deliver the SacOil Shares 
to him. Consequently Mr Modibane alleges that the Company's unlawful conduct entitled 
him to claim damages against the Company in the amount of R67.2 million plus interest 
at the rate of 15.5% per annum from 14 September 2010 to date of payment.

In a second action, Mr Modibane alleges that the content of the announcement made by 
the Company on 15 September 2010, in relation to the first action was defamatory to him 
and he claims payment from the Company of damages in the amount of R80 million, together 
with interest at the rate of 15.5% per annum from 22 September 2010 to date of payment.

Based on the information in the Board's possession, the Board is of the view that the 
claims have no substance and the Company's legal advisors are defending both actions. 
Pleadings have closed in both actions. Trial dates that were allocated were not 
convenient. The actions were therefore, by agreement, removed from the trial roll. 
A SENS announcement published on 28 February 2013 reported that Mr Modibane passed 
away on 23 February 2013. It remains to be seen whether an executor for Mr Modibane's 
estate elects to persist with the two actions.

Robin Vela
The Company instituted legal action against Robin Vela (its former CEO) in which it 
claimed an amount of R3,324,524 together with interest in respect of taxes that became 
due to the South African Revenue Services and which were not deducted from the salary 
that was paid to him by the Company, during his tenure as CEO.

Mr Vela is defending the action and has also raised three counterclaims in the action, 
in terms of which he claims an amount of R280,749 allegedly owing in respect of unpaid 
leave; an amount of R2,784,948 allegedly due in respect of a bonus and an amount of 
R16,881,459 allegedly owing in respect of the breach of a share option agreement. 
In addition, Mr Vela is also claiming interest on these amounts. The Company is 
defending the counterclaims.


CONSOLIDATED CONDENSED PRELIMINARY STATEMENT OF COMPREHENSIVE INCOME
                                                                  2015           2014
                                                   Note              R              R
Revenue                                                      2 095 339              - 
Cost of sales                                               (3 225 015)             - 
Gross loss                                                  (1 129 676)             - 
Other income                                               103 334 136     47 350 527 
Other operating costs                                     (510 106 001)  (100 247 072)
Loss from operations                                      (407 901 541)   (52 896 545)
Investment income                                          158 052 007    130 555 693 
Finance costs                                                   (1 469)   (12 931 875)
(Loss)/profit before taxation                             (249 851 003)    64 727 273 
Taxation                                                   (27 178 233)   (55 212 656)
(Loss)/profit for the year                                (277 029 236)     9 514 617 
                  
Other comprehensive income:                  
Items that may be reclassified to profit or loss 
  in subsequent periods:                  
Exchange differences on translation of foreign operations    8 716 621              - 
Other comprehensive income for the year net of taxation      8 716 621              - 
Total comprehensive (loss)/income for the year            (268 312 615)     9 514 617 
                  
(Loss)/profit attributable to:                  
Equity holders of the parent                              (269 216 457)    19 594 296 
Non-controlling interest                                    (7 812 779)   (10 079 679)
(Loss)/profit for the year                                (277 029 236)     9 514 617 
                  
Total comprehensive (loss)/income attributable to:                  
Equity holders of the parent                              (260 499 836)    19 594 296 
Non-controlling interest                                    (7 812 779)   (10 079 679)
Total comprehensive (loss)/income for the year            (268 312 615)     9 514 617 
                  
(Loss)/earnings per share                   
Basic (cents)                                         4          (8.54)          1.37 
Diluted (cents)                                       4          (8.54)          1.36


CONSOLIDATED CONDENSED PRELIMINARY STATEMENT OF FINANCIAL POSITION
                                                                  2015           2014
                                                   Note              R              R
ASSETS                  
Non-current assets                  
Exploration and evaluation assets                           75 949 565    266 809 536 
Oil and gas properties                                     122 869 708              - 
Other financial assets                                7    345 753 287    433 344 048 
Property, plant and equipment                                  344 706        247 207 
Other intangible assets                                     61 095 540        175 476 
Total non-current assets                                   606 012 806    700 576 267 
Current assets                  
Other financial assets                                7    331 641 018    222 542 359 
Inventories                                                  6 641 663              - 
Trade and other receivables                                  7 152 505        649 764 
Cash and cash equivalents                                  229 431 001    381 579 766 
Total current assets                                       574 866 187    604 771 889 
Asset held for sale                                   6     21 839 945              - 
Total assets                                             1 202 718 938  1 305 348 156 
                  
EQUITY AND LIABILITIES                  
Shareholders' equity                  
Stated capital                                        9  1 216 503 883  1 109 977 054 
Reserves                                                    15 606 468      6 001 847 
Accumulated loss                                          (448 654 565)  (179 426 156)
Equity attributable to equity holders of parent            783 455 786    936 552 745 
Non-controlling interest                                     4 417 649     12 218 476 
Total shareholders' equity                                 787 873 435    948 771 221 
Liabilities                  
Non-current liabilities                  
Deferred tax liability                                      97 146 476     92 498 394 
Total non-current liabilities                               97 146 476     92 498 394 
Current liabilities                  
Other financial liabilities                                 57 888 500     74 167 311 
Current tax payable                                        212 416 721    176 856 253 
Trade and other payables                                    25 553 861     13 054 977 
Total current liabilities                                  295 859 082    264 078 541 
Total liabilities                                          393 005 558    356 576 935 
Liabilities directly associated with asset 
  held for sale                                       6     21 839 945              - 
Total equity and liabilities                             1 202 718 938  1 305 348 156 
                  
Number of shares in issue                                3 269 836 208  3 086 169 261 
Net asset value per share (cents)                                24.10          30.74
Net tangible asset value per share (cents)                       21.77          22.10


CONSOLIDATED CONDENSED PRELIMINARY STATEMENT OF CHANGES IN EQUITY
                                                               Foreign                                                 Total equity           Non-
                                                 Stated       currency    Share-based                               attributable to    controlling
                                                capital    translation        payment          Total    Accumulated  equity holders       interest          Total
                                                (Note 9)       reserve        reserve       reserves           loss   of the parent          ("NCI")       equity
                                                      R              R              R              R              R               R              R              R
Balance at 28 February 2013                 534 172 123              -     26 681 469     26 681 469   (219 700 074)    341 153 518     22 298 155    363 451 673 
Changes in equity:                                                 
Profit/(loss) for the year                            -              -              -              -      19 594 296     19 594 296    (10 079 679)     9 514 617 
Total comprehensive income/(loss) 
  for the year                                        -              -              -              -      19 594 296     19 594 296    (10 079 679)     9 514 617 
Issue of shares                             575 804 931              -              -              -               -    575 804 931              -    575 804 931 
Share options lapsed                                  -              -    (20 679 622)   (20 679 622)     20 679 622              -              -              - 
Total changes                               575 804 931              -    (20 679 622)   (20 679 622)     40 273 918    595 399 227    (10 079 679)   585 319 548 
Balance at 28 February 2014               1 109 977 054              -      6 001 847      6 001 847    (179 426 156)   936 552 745     12 218 476    948 771 221 
Changes in equity:                                                 
Loss for the year                                     -              -              -              -    (269 216 457)  (269 216 457)    (7 812 779)  (277 029 236)
Other comprehensive income for the year               -      8 716 621              -      8 716 621               -      8 716 621              -      8 716 621 
Total comprehensive (loss)/income 
  for the year                                        -      8 716 621              -      8 716 621    (269 216 457)  (260 499 836)    (7 812 779)  (268 312 615)
Issue of shares                             106 526 829              -              -              -               -    106 526 829              -    106 526 829 
Share options issued                                  -              -        888 000        888 000               -        888 000              -        888 000 
Acquisition of non-controlling interest               -              -              -              -         (11 952)       (11 952)        11 952              - 
Total changes                               106 526 829      8 716 621        888 000      9 604 621    (269 228 409)  (153 096 959)    (7 800 827)  (160 897 786)
Balance at 28 February 2015               1 216 503 883      8 716 621      6 889 847     15 606 468    (448 654 565)   783 455 786      4 417 649    787 873 435


CONSOLIDATED CONDENSED PRELIMINARY STATEMENT OF CASH FLOWS
                                                                  2015           2014
                                                                     R              R
Cash flows from operating activities            
Cash used in operations                                    (39 130 214)   (39 133 285)
Interest income                                              6 961 514        889 724
Finance costs                                                   (1 469)    (1 324 143)
Tax (paid)/received                                                (23)        32 404
Net cash used in operating activities                      (32 170 192)   (39 535 300)
Cash flows from investing activities            
Purchase of property, plant and equipment                     (234 488)       (71 426)
Purchase of exploration and evaluation assets              (69 118 676)   (63 026 602)
Purchase of oil and gas properties                          (7 270 438)             - 
Purchase of other intangible assets                           (135 899)       (86 956)
Acquisition of subsidiary                                  (44 540 236)             - 
Payments received for other financial assets                13 463 071     14 793 124
Net cash used in investing activities                     (107 836 666)   (48 391 860)
Cash flows from financing activities            
Proceeds on share issue                                              -    337 273 662 
Settlement of borrowings                                   (20 461 137)             - 
Proceeds from other financial liabilities                      420 209     18 670 494
Net cash (used in)/from financing activities               (20 040 928)   355 944 156
Total movement in cash and cash equivalents for the year  (160 047 786)   268 016 996
Foreign exchange gains on cash and cash equivalents          7 899 021     19 530 354
Cash and cash equivalents at the beginning of the year     381 579 766     94 032 416
Cash and cash equivalents at the end of the year           229 431 001    381 579 766


NOTES

1  BASIS OF PREPARATION
   The consolidated condensed preliminary financial statements of the Group for the year 
   ended 28 February 2015 have been prepared in accordance with the Group's accounting 
   policies, which comply with the recognition and measurement criteria of International 
   Financial Reporting Standards, and the presentation and disclosure requirements of 
   IAS 34 - Interim Financial Reporting, the SAICA Financial Reporting Guides as issued 
   by the Accounting Practices Committee, the Financial Reporting Pronouncements as issued 
   by the Financial Reporting Standards Council, the Listings Requirements of the 
   JSE Limited and the Companies Act of South Africa (No.71 of 2008, as amended). 
   The accounting policies applied in the preparation of the results for the year ended 
   28 February 2015 are consistent with those adopted in the financial statements for 
   the year ended 28 February 2014 except as noted below.

   The Group has adopted the amendment to IAS 36 - Impairment of Assets. The application 
   of this standard has not had a material impact on the measurement of assets and 
   liabilities of the Group, but will result in additional disclosures.

   These consolidated condensed preliminary 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  AUDITOR'S AUDIT REPORT
   The directors take full responsibility for the preparation of these consolidated 
   condensed preliminary financial statements. They have been prepared under the 
   supervision of Marius Damain Matroos CA (SA). These consolidated condensed preliminary 
   financial statements have been audited by Ernst & Young Inc., the Group's auditors. 
   The audit report is available for inspection at the Company's registered office 
   together with the consolidated condensed preliminary financial statements identified 
   in the auditors' report.

   The audit report on the consolidated condensed preliminary financial statements 
   includes an "Other Legal and Regulatory Requirements" paragraph which highlights 
   reportable irregularities previously identified as disclosed in note 13.

3  SEGMENTAL REPORTING
   The Group operates in six geographical locations, which form the basis of the 
   information evaluated by the Group's chief decision-maker. For management purposes 
   the Group is organised and analysed by these locations. These locations are: 
   South Africa, Egypt, Nigeria, DRC, Botswana and Malawi. Operations in South Africa 
   relate to head office activities of the Group that include the general management, 
   financing and administration of the Group.

                                      Egypt        Nigeria            DRC         Malawi       Botswana   South Africa    Consolidated
                                          R              R              R              R              R              R               R
   2015                                          
   Revenue                        2 095 339              -              -              -              -              -       2 095 339 
   Cost of sales                 (3 225 015)             -              -              -              -              -      (3 225 015)
   Gross loss                    (1 129 676)             -              -              -              -              -      (1 129 676)
   Other income                           -     41 038 776      8 964 255              -              -     53 331 105     103 334 136 
   Investment income                      -     29 594 807     22 486 077              -              -    105 971 123     158 052 007 
   Finance costs                          -              -         (1 274)             -              -           (195)         (1 469)
   Other operating expenses      (7 430 208)      (333 572)   (23 775 428)             -       (500 183)  (478 066 610)   (510 106 001)
   Taxation                               -            (22)   (30 117 465)             -              -      2 939 254     (27 178 233)
   (Loss)/profit for the year    (8 559 884)    70 299 989    (22 443 835)             -       (500 183)  (315 825 323)   (277 029 236)
                                          
   Segment assets                                           
   - non-current                183 759 646              -    312 042 259      1 196 742        386 548    108 627 611     606 012 806
   - current                     17 852 480    226 456 059     41 776 214              -          1 420    288 780 014     574 866 187
   Segment liabilities                                          
   - non-current                          -              -    (95 070 394)             -              -     (2 076 082)    (97 146 476)
   - current                     (6 456 929)   (57 917 444)  (171 581 513)             -              -    (59 903 196)   (295 859 082)

                                                   Nigeria            DRC         Malawi       Botswana    South Africa   Consolidated
                                                         R              R              R              R               R              R
   2014                                    
   Other income                                  9 722 354     12 441 074              -              -      25 187 099     47 350 527 
   Investment income                               872 310     20 499 497              -              -     109 183 886    130 555 693 
   Finance costs                                         -              -              -              -     (12 931 875)   (12 931 875)
   Other operating expenses                       (199 450)   (22 149 316)             -        (10 381)    (77 887 925)  (100 247 072)
   Taxation                                         32 404    (37 378 904)             -              -     (17 866 156)   (55 212 656)
   Profit/(loss) for the year                   10 427 618    (26 587 649)             -        (10 381)     25 685 029      9 514 617 
                                    
   Segment assets                                    
   - non-current                               191 159 973    295 859 426        896 740        386 548     212 273 580    700 576 267 
   - current                                   108 144 436     38 929 675              -              -     457 697 778    604 771 889 
   Segment liabilities                                    
   - non-current                                         -    (88 597 261)             -              -      (3 901 133)   (92 498 394)
   - current                                   (53 973 973)  (136 593 804)             -              -     (73 510 764)  (264 078 541)

   Business segments
   The operations of the Group comprise one class of business, being oil and gas 
   exploration and production. The activities currently undertaken in Mozambique 
   related to the Mozambican pipeline are not significant at this stage and have not 
   been separately disclosed. These activities therefore do not meet the recognition 
   criteria for operating segments.

   Revenue
   The Group's reported revenue is generated from a single customer (the Egyptian 
   General Petroleum Corporation), with respect to oil sales. This revenue is 
   attributed to the Egypt segment.

   Taxation - Egypt
   No income or deferred tax has been accrued by Mena as the Concession Agreement 
   between the EGPC, the Ministry of Petroleum and Mena provides that the EGPC is 
   responsible for the settlement of income tax on behalf of Mena, out of EGPC's 
   share of petroleum produced. The Group has elected the net presentation approach 
   in accounting for this deemed income tax. Under this approach Mena's revenue is 
   not grossed up for income tax payable by EGPC on behalf of Mena. Consequently, 
   no income or deferred tax is accrued.

                                                                   2015           2014
                                                                      R              R
4  (LOSS)/EARNINGS PER SHARE            
   Basic (cents)                                                  (8.54)          1.37 
   Diluted (cents)                                                (8.54)          1.36 
   (Loss)/profit attributable to equity holders of the 
     parent used in the calculation of the basic and 
     diluted loss per share                                (269 216 457)    19 594 296 
                  
   Weighted average number of ordinary shares used in 
     the calculation of basic (loss)/earnings per share   3 151 081 689  1 435 074 830 
   Issued shares at the beginning of the reporting period 3 086 169 261    953 340 791 
   Effect of shares issued during the reporting period 
     (weighted)                                              64 912 428    481 734 039 
   Add: Dilutive share options                                        -      1 618 673 
   Weighted average number of ordinary shares used in the 
     calculation of diluted (loss)/earnings per share     3 151 081 689  1 436 693 503 
                  
   Headline (loss)/earnings per share            
   Basic (cents)                                                  (4.67)          1.37 
   Diluted (cents)                                                (4.67)          1.36 
                  
   Reconciliation of headline (loss)/earnings            
   (Loss)/profit attributable to equity holders 
     of the parent                                         (269 216 457)    19 594 296 
   Adjusted for:            
   Impairment of assets held for sale                       194 065 780              - 
   Gain on acquisition of subsidiary                        (24 718 054)             - 
   Tax effects of adjustments                               (47 417 363)             -
   Headline (loss)/earnings                                (147 286 094)    19 594 296

5  BUSINESS COMBINATIONS
   On 22 October 2014 the Group acquired 100% of the share capital of Cyprus-registered 
   exploration and production company, Mena International Petroleum Company Limited 
   ("Mena"), which holds a 100% interest in the development lease for the Lagia Oil Field, 
   covering an area of approximately 32 square kilometres on the Sinai Peninsula in Egypt. 
   Mena was acquired to grow and balance the Group's existing portfolio of assets by 
   adding reserves and production. As a result of the acquisition the Group now generates 
   revenue from an oil-producing asset and operates in a new geographical location.

   The Group issued 183 666 947 SacOil ordinary shares as part consideration for the 
   acquisition of Mena. The fair value of the shares was based on the published share 
   price of SacOil shares on 22 October 2014, which was 58 cents. The resulting value 
   of the shares issued was R106 526 829 ($10.0 million). The Group further paid a 
   cash consideration of R45 200 315 ($4.1 million) as share capital in Mena to settle 
   outstanding liabilities. The fair value of the consideration transferred was 
   therefore R151 727 144.

   The following table summarises the consideration paid for Mena and the provisional 
   fair values of assets acquired and liabilities assumed:

   Provisional fair values recognised on acquisition                                R 
   Oil and gas properties                                                 110 062 658 
   Other intangible assets                                                 59 668 026 
   Inventories                                                              6 026 074 
   Trade and other receivables                                             43 506 640 
   Cash and cash equivalents                                                  660 079 
   Total identifiable assets at fair value                                219 923 477 
   Borrowings                                                             (20 461 137)
   Trade and other payables                                               (23 017 142)
   Total identifiable net assets at fair value                            176 445 198 
   Gain on bargain purchase                                               (24 718 054)
   Total consideration transferred                                        151 727 144

   The fair values disclosed are provisional as at 28 February 2015 due to the complexity 
   of the acquisition and the fact that the assessment of the underlying reserves 
   acquired is still being finalised. As a result the final fair values may differ. The 
   review of the fair value of the assets and liabilities acquired will be completed 
   within 12 months of the acquisition of the asset.

   The fair value of trade and other receivables is R43.5 million representing the gross 
   contractual amounts receivable. None of the trade and other receivables were impaired 
   at the acquisition date as it was expected that the full contractual amounts would be 
   collected. These receivables were subsequently collected as at the date of the 
   financial statements.

   A gain on acquisition of Mena of R24.7 million has been recognised in "other income" 
   in profit or loss.

   From 22 October 2014 to 28 February 2015 Mena contributed R2.1 million to Group revenue 
   and R8.6 million to Group loss. If the acquisition of Mena had taken place at the 
   beginning of the year, Group revenue for the 2015 year would have been R2.8 million 
   and Mena would have contributed a profit of R97.6 million to the Group results, 
   thereby reducing the Group loss to R163.8 million.

   Acquisition-related costs of R8.7 million have been charged to "other operating costs" 
   in profit or loss. Mena's net assets at acquisition date exceeded the purchase price 
   paid by the Group.

   The cash outflow at acquisition is as follows:
                                                                 Group        Company
                                                                     R              R 
   Cash paid                                                45 200 315     45 200 315 
   Net cash acquired with the subsidiary                      (660 079)             -
   Net cash outflow                                         44 540 236     45 200 315

   Taxation
   No income or deferred tax has been accrued by Mena as the Concession Agreement 
   between the EGPC, the Ministry of Petroleum and Mena provides that the EGPC is 
   responsible for the settlement of income tax on behalf of Mena, out of EGPC's share 
   of petroleum produced. The Group has elected the net presentation approach in 
   accounting for this deemed income tax. Under this approach Mena's revenue is not 
   grossed up for income tax payable by EGPC on behalf of Mena. Consequently, no 
   income or deferred tax is accrued.

6  NON-CURRENT ASSETS HELD FOR SALE
   On 27 February 2015 the SacOil Board endorsed a plan to investigate the termination 
   of the Group's participation in OPL 233 in Nigeria. The termination is in line with 
   the balancing and rationalising of the Group's portfolio of assets with the aim to 
   restructure the Group's future capital requirements to focus on cash-generative 
   assets and low-risk exploration assets. The Farm-In Agreement provides for the 
   recovery of costs incurred on the asset upon termination. It is expected that the 
   process to give effect to the termination in accordance with the Farm-In Agreement 
   will be completed by 31 August 2015. The non-current asset held for sale and the 
   liabilities associated with this asset at 28 February 2015 are outlined below:

                                                                                 2015
                                                                                    R
   Asset held for sale      
   Exploration and evaluation assets - OPL 233 Nigeria                     21 839 945
      
   Liabilities directly associated with the asset held for sale      
   Nigdel                                                                 (21 839 945)

   Prior to classification as an asset held for sale, OPL 233 was recognised as an 
   E&E asset in the accounting records of the Company's subsidiary SacOil 233 Nigeria 
   Limited. Consequently OPL 233 was recognised as an asset by the Group and not the 
   Company. An asset held for sale is therefore reported at Group level only. 

   SacOil 233 Nigeria Limited's obligations are funded by SacOil Holdings Limited. 
   The Nigdel liability associated with OPL 233 is recognised by SacOil Holdings Limited 
   and, consequently, the Group. The liability directly associated with the asset held 
   for sale is therefore reported for both Group and Company results.

   Immediately before the classification as an asset held for sale OPL 233 had a carrying 
   amount of R215.9 million. An impairment loss of R194.1 million was recognised to 
   reduce the carrying amount of the asset to the fair value less costs to sell. Based on 
   a preliminary assessment and pending the outcome of termination negotiations with 
   Nigdel, the Group expects to recover R21.8 million which will be off-set against the 
   Group's indebtedness to Nigdel. The impairment loss was recognised in the statement 
   of comprehensive income under other operating costs.

                                                                  2015           2014
                                                                     R              R
7  OTHER FINANCIAL ASSETS            
   Non-current            
   Deferred consideration on disposal of 
     Greenhills Plant                                 1      1 718 470      3 281 164
   Advance payment against future services            2     68 627 273     62 388 430
   Loan due from EERNL                                3     37 731 560    146 181 302
   Contingent consideration                           4    237 675 984    221 493 152
                                                           345 753 287    433 344 048
   Current            
   Loan due from EERNL                                3    183 242 921    210 835 454
   Loan due from DIG                                  5     51 036 906     47 694 469
   Transcorp receivable                               6    220 824 802              -
   Deferred consideration on disposal of 
     Greenhills Plant                                 1      1 890 810      1 890 811
                                                           456 995 439    260 420 734
   Less: Provision for impairment                     3   (125 354 421)   (37 878 375)
                                                           331 641 018    222 542 359
                                                           677 394 305    655 886 407

   1  The deferred consideration represents the present value of the remaining 
      consideration for the Greenhills Plant which was sold in October 2012. As the 
      future consideration receivable is R4.0 million receivable in October 2015 and 
      October 2016 in equal instalments of R2.0 million each, the present value 
      recognised at 28 February 2015 is R3.6 million (2014: R5.2 million). 

   2  At 28 February 2015, R3.0 million has been received with respect to this disposal.
      The amount due represents Encha Energy's indebtedness to SacOil Holdings Limited 
      under the Acknowledgement of Debt Agreement concluded between the two parties on 
      28 February 2013. As the future value of this asset is R75.5 million, the financial 
      asset recognised at 28 February 2015 is R68.6 million (2014: R62.4 million), 
      representing the present value of this future receivable. Interest amounting to 
      R6.3 million (2014: R5.7 million) arising from the unwinding of the discount 
      applied to the future receivable on initial recognition has been included in 
      investment income. 

   3  On 26 March 2015 SacOil and EERNL restructured the settlement of the outstanding 
      loans as detailed in note 14. As a result of the restructuring and termination of 
      participation in OPL 281 by both parties the long-term loan due from EERNL 
      attributable to OPL 281 was off-set against EERNL's share of the Transcorp Refund 
      (see footnote 6) as full and final settlement of this liability. This resulted in 
      a write-off of R73.2 million due to the interest differential between the Transcorp 
      Refund and the EERNL loan. Prior to the settlement agreement the long-term loan 
      accrued interest at 25% per annum and was denominated in US Dollars.

      The restucturing of the repayment of the loans also means that part of the 
      short-term loan which relates to OPL 233 is reclassified as long term, representing 
      the settlement of the loans from the OML 113 cash flows expected in 2019 and 2020. 
      At 28 February 2015, R37.7 million has been recognised with respect to this 
      receivable, being the present value of future payments totalling R57.9 million 
      ($5 million). 

      An amount of R65.4 million has been written off as a bad debt expense following 
      management's assessment of the recovery mechanisms in the settlement agreement, 
      which specifies the recovery options available to the Group. The remainder of the 
      short-term loan is expected to be recovered within a year from EERNL's share of 
      the cash collateral and recoveries from Nigdel pursuant to the termination of 
      EERNL's participation in OPL 233. The recovery from Nigdel of R125.4 million has 
      been provided for pending the finalisation of exit negotiations. This resulted in 
      an increase in the provision for impairment by R87.5 million. Both expenses have 
      been recognised under other operating costs. 

      SacOil agreed to an interest freeze on the outstanding loan from 30 November 2014. 
      Prior to this the loan accrued interest at 32%. The loan is denominated in US Dollars.

   4  The Farm-In Agreement between Semliki and Total provides for a cash payment by 
      Total to Semliki upon the occurrence of certain future events ("contingent 
      consideration"). As there is a contractual right to receive cash from Total, 
      Semliki has recognised a financial asset in its statement of financial position. 
      The asset was 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 date SacOil revises its estimate of receipts from the financial 
      asset in line with the requirements of IAS 39. Included in the statement of 
      comprehensive income at 28 February 2015 is an impairment loss of R23.8 million 
      (2014: R22.1 million) representing the write-down of future expected cash flows 
      from the contingent consideration for the Block III farm-outs in March 2011 and 
      March 2012. The write-down was necessitated by the delay in activities on 
      Block III related to civil unrest and the deferred receipt of the contingent 
      consideration, and is reflective of the time value of money. A deferred tax charge 
      amounting to R6.5 million (2014: a credit of R16.0 million) was recognised in the 
      statement of comprehensive income. The assumptions used to measure the contingent 
      consideration are detailed below:

      Probability of exploration success (single well)                            26%
      Probability of at least one success from two wells                          45%
      Probability of successful completion given exploration success              89%
      Discount rate                                                               10%
      First Investment Decision Date ("FID")                         28 February 2020
      First Oil Date ("FOD")                                         28 February 2024
      Valuation date                                                 28 February 2015
      First contingent consideration      
      FID                                                                 $42 549 000
      FOD                                                                 $36 680 000
      Second contingent consideration      
      FID                                                                  $4 635 000
      FOD                                                                  $6 660 000

      Should the probability factors applied to the valuation model be increased or 
      decreased by 10%, all other variables held constant, post-tax loss would have 
      been R55.2 million (2014: R51.4 million) lower and R55.2 million 
      (2014: R51.4 million) higher, respectively. 

   5  The loan comprises the taxes recoverable from DIG with respect to the capital 
      gains tax payable by Semliki on the farm-out of the 6.67% interest in Block III 
      in March 2012, which transaction was initiated by and solely benefited DIG. 
      The loan is interest free, unsecured, has no fixed repayment terms and is 
      denominated in US Dollars. The Group is in the process of restructuring its 
      holding in Block III, which will result in the elimination of the Group's 
      foreign taxes as these taxes will become the liabilities of DIG. Consequently 
      this will eliminate DIG's indebtedness to the Group. The restructuring is 
      expected to be finalised by 31 August 2015.

   6  The Transcorp Refund represents amounts recoverable from Transcorp under the 
      provisions of the FIA following the termination of SacOil 281's participation 
      in OPL 281. SacOil paid R44.1 million ($6.25 million) on behalf of its subsidiary, 
      SacOil 281, and R43.6 million ($6.25 million) on behalf of EER 233 Nigeria Limited 
      for a signature bonus and other costs relating to OPL 281, which contractually will 
      be refunded by Transcorp with interest on the signature bonus component at 20% per 
      annum. EERNL has ceded its share of the refund as settlement of the OPL 281 loan 
      owed to SacOil as detailed in note 14 and footnote 3. Consequently R110.4 million 
      has been recognised as a receivable from Transcorp by SacOil under the terms of 
      the settlement agreement. A further R110.4 million has been recognised by SacOil 281 
      in line with the provisions of the FIA. Pursuant to the exit SacOil will not have 
      future commitments and obligations associated with the appraisal of OPL 281. 
      Furthermore, the farm-in fee which would have been payable to Transcorp and the 
      transaction fee which would have been payable to Energy Equity Resources Norway 
      Limited of US$12 million and US$2.5 million respectively, as disclosed in the 
      prior year commitments (note 10), are no longer due and payable.

      At 28 February 2015 the Company receivable of R110.4 million with respect to the 
      above transactions represents SacOil's entitlement to EERNL's share of the 
      Transcorp Refund. The Group receivable of R220.8 million further includes 
      SacOil 281's share of the refund.

8  FAIR VALUE MEASUREMENT
                                       Carrying value                  Fair value      
                                    2015           2014           2015           2014
                                       R              R              R              R
   Loans and receivables                        
   Other financial assets1   677 394 305    655 886 407    590 452 903    589 512 367

   1  In terms of SacOil's accounting policies and IAS39 - Financial Instruments: 
      Recognition and Measurement ("IAS 39") these financial instruments are carried at 
      amortised cost and not at fair value, given that SacOil intends to collect the 
      cash flows from these instruments when they fall due over the life of the instrument. 
      Changes in market discount rates which affect fair value would therefore not impact 
      the valuation of these financial instruments and are not considered to be objective 
      evidence of impairment for items carried at amortised cost per IAS 39 as this does 
      not impact the timing or amount of expected future cash flows.

   Asset                     Fair value at 
                          28 February 2015
                                         R   Valuation technique                       Significant inputs
   Other financial assets      590 452 903   Discounted cash flow model                Weighted average cost of capital
   Asset held for sale          21 839 945   Undiscounted cash flows due to            Non-performance risk
                                             the short term maturity of this asset      
                  
   Assets/(Liabilities)      Fair value at 
                           22 October 2014
                                         R   Valuation technique                       Significant inputs
   Other intangible assets      59 668 026   Multi-period excess earnings method       Weighted average cost of capital, 
                                                                                       useful life, forecast revenue, EBITDA margin 
                                                                                       and attrition rate
   Oil and gas properties      110 062 658   Discounted cash flow model                Weighted average cost of capital
   Inventories                   6 026 074   Discounted cash flow model                Weighted average cost of capital
   Trade and other receivables  43 506 640   Undiscounted cash flows due to the        Non-performance risk
                                             short term maturity of this asset      
   Cash and cash equivalents       660 079   Undiscounted cash flows due to the        Non-performance risk
                                             short term maturity of this asset      
   Borrowings                  (20 461 137)  Discounted cash flow model                Weighted average cost of capital
   Trade and other payables    (23 017 142)  Undiscounted cash flows due to the        Non-performance risk
                                             short term maturity of this asset      

   The Group's own non-performance risk as at 28 February 2015 was assessed to be 
   insignificant.

   Fair value hierarchy
   The following table presents the Group's assets not measured at fair value in the 
   statement of financial position, but for which the fair value is disclosed above. 
   The different levels have been defined as follows:

  Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities
  Level 2: Other techniques for which all inputs which have a significant effect on the 
           recorded fair value are observable, either directly or indirectly
  Level 3: Techniques which use inputs that have a significant effect on the recorded fair 
           value that are not based on observable market data

                                 Level 1        Level 2        Level 3          Total
   Other financial assets              -              -    590 452 903    590 452 903 
   Asset held for sale                 -              -     21 839 945     21 839 945 
                        
   At 22 October 2014                        
   Other intangible assets             -              -     59 668 026     59 668 026 
   Oil and gas properties              -              -    110 062 658    110 062 658 
   Inventories                         -              -      6 026 074      6 026 074 
   Trade and other receivables         -              -     43 506 640     43 506 640 
   Cash and cash equivalents           -              -        660 079        660 079 
   Borrowings                          -              -    (20 461 137)   (20 461 137)
   Trade and other payables            -              -    (23 017 142)   (23 017 142)
                        
   There were no transfers between any levels during the year.                        

9  STATED CAPITAL
                                                                Number         Stated
   Date                        Issued to                     of shares        capital
   Balance at 1 March 2013                                 953 340 791    534 172 123 
   3 October 2013               N Gutta*                     2 777 777        691 244 
   29 January 2014              Various** ***            1 246 601 549    336 582 418 
   30 January 2014              Westglamry Limited**       641 840 797    173 297 015 
   30 January 2014              Newdel Holdings Limited**  241 608 347     65 234 254 
   Balance at 28 February 2014                           3 086 169 261  1 109 977 054 
   Balance at 1 March 2014                               3 086 169 261  1 109 977 054 
   22 October 2014              Mena Hydrocarbons 
                                Incorporated**             183 666 947    106 526 829 
   Balance at 28 February 2015                           3 269 836 208  1 216 503 883 
                  
   *    General issue
   **   Specific issue
   ***  Shares issued to various shareholders under the terms of the rights offer that 
        closed on 27 January 2014. 1 219 302 642 (98%) of these shares were issued to 
        the Government Employees Pension Fund.                  

10  COMMITMENTS AND CONTINGENT LIABILITIES
                                                                          2015          2014
                                                                             R             R
    Commitments            
    Exploration and evaluation assets - work programme commitments
    - due within 12 months                                          68 660 750   130 425 256 
    - due within 13 to 48 months                                    19 500 334   642 206 667 
                                                                    88 161 084   772 631 923 
            
    Exploration and evaluation commitments will be funded 
    through a combination of existing cash, and if required, 
    debt and equity funding.            
            
    Contingent liabilities             
    Performance bond on OPL 233 issued by Ecobank in respect 
      of OPL 233 exploration activities1                           173 665 500   161 841 000 
    Cost carry arrangement with Total2                              96 612 847    36 508 805 
    Farm-in and transaction fees on receipt of title to OPL 2333             -   141 341 140 
    Farm-in and transaction fees on receipt of title to OPL 2814             -   156 446 300 
                                                                   270 278 347   496 137 245

    1  Performance bond
       In April 2012 the Group posted a R289.4 million (2014: R269.7 million) 
       ($25.0 million) performance bond to support the work programme on OPL 233. This 
       performance bond is secured by a R116.0 million (2014: R108.1 million) ($10 million) 
       cash collateral. The remainder of the performance bond, disclosed as a contingent 
       liability, is secured by a first ranking legal charge over SacOil's investment in 
       SacOil 233 Nigeria Limited. This performance bond expired on 2 May 2015.

    2  Cost carry arrangement
       The Farm-In Agreement between Semliki and Total provides for a carry of costs by 
       Total on behalf of Semliki on Block III. Total will be entitled to recover these costs, 
       being Semliki's share of the production costs on Block III, plus interest, from future 
       oil revenues. The contingency becomes probable when production of oil commences and 
       will be raised in full at that point. At 28 February 2015 Total has incurred 
       R96.6 million (2014: R36.5 million) of costs on behalf of Semliki. Should this 
       liability be recognised a corresponding increase in assets will be recognised which, 
       together with existing exploration and evaluation assets, will be recognised as 
       development infrastructure assets. 

    3  Farm-in and transaction fees - OPL 233
       At 28 February 2015, OPL 233 was classified as an asset held for sale and the SacOil 
       Board was committed to a plan to investigate the termination of participation in 
       the asset. Subsequent to the year-end SacOil informed Nigdel of its decision to 
       terminate participation in OPL 233. Consequently SacOil will not have any future 
       commitments and obligations associated with the appraisal of OPL 233. Furthermore, 
       the farm-in fee which would have been payable to Nigdel and the transaction fee 
       which would have been payable to Energy Equity Resources Norway Limited of 
       US$10.6 million and US$2.5 million respectively, as disclosed in the prior-year 
       commitments, are no longer due and payable.

    4  Farm-in and transaction fees - OPL 281
       On 3 December 2014 SacOil terminated its participation in OPL 281. Consequently 
       SacOil will not have any future commitments and obligations associated with the 
       appraisal of OPL 281. Furthermore, the farm-in fee which would have been payable 
       to Transcorp and the transaction fee which would have been payable to Energy Equity 
       Resources Norway Limited of US$12 million and US$2.5 million respectively, as 
       disclosed in the prior-year commitments, are no longer due and payable.

11  RELATED PARTIES
    Key management compensation                                   2015           2014
                                                                     R              R
    Non-executive directors:            
    Fees                                                     2 796 665      1 644 216
    Executive directors:            
    Salaries                                                13 074 814      3 087 500
    Other key management:            
    Salaries                                                 4 641 152      5 889 500

12  DIVIDENDS
    The Board has resolved not to declare any dividends to shareholders for the period 
    under review.

13  REPORTABLE IRREGULARITIES
    As announced to shareholders in the 31 August 2014 interim results, The Board of 
    SacOil engaged Ernst & Young Inc. ("EY") to carry out a forensic investigation on 
    specific historical transactions of the Company between 1 August 2011 and 
    30 November 2011 relating to the Company's unsuccessful attempt to acquire interests 
    in Blocks I and II in the DRC, amongst other matters.

    Based on matters raised in the preliminary forensic report EY, the Company's external 
    auditors, reported to the Independent Regulatory Board for Auditors ("IRBA") on 
    31 October 2014 that they had reason to believe that reportable irregularities 
    committed by previous members of management had taken place. The reportable 
    irregularities related to matters which did not affect the current year financial 
    results. On 28 November 2014, having completed additional work on the matters 
    identified, EY subsequently informed the IRBA that the reportable irregularities 
    were no longer continuing.

    The forensic investigation represents a key step taken by the Board to address 
    historical governance issues. The investigation is now at an advanced stage and 
    the SacOil Board is reviewing the results of the investigation.

14  EVENTS AFTER THE REPORTING PERIOD
    The following events took place from the period 1 March 2015 to the date of this report:

    EER loan
    On 26 March 2015 SacOil and EERNL signed a settlement agreement to restructure the 
    repayment of the outstanding loans detailed in note 7. The salient terms of the 
    agreement are outlined below:

    Long-term loans outstanding with respect to OPL 281
    - The EERNL Group nominated a SacOil bank account for the repayment of the full 
      amount due from Transcorp as full and final settlement of any amounts advanced to 
      the EERNL Group by SacOil in respect of OPL 281. This will effectively return 
      $12.5 million plus interest to SacOil of which $6.25 million represents the amount 
      ceded to SacOil by EERNL as repayment of the OPL 281 loan.
    - SacOil will indemnify the EERNL Group against any and all costs incurred or 
      sustained as a result of any counterclaims by Transcorp; in return, EERNL Group 
      has ceded its rights to SacOil 281 relating to any claims that it has against Transcorp.

    Short-term loans outstanding with respect to OPL 233
    The repayment of the loan relating to OPL 233 has been restructured as follows:

    - interest freeze from 30 November 2014 on the outstanding loan balance of US24.2 million;
    - EERNL Group's right to the US$2.5 million promote fee, payable by SacOil to EERNL 
      Group upon receipt of government approval for the assignment of interest in OPL 233, 
      is set off against the outstanding balance on the loans;
    - any and all proceeds subsequently received by EERNL Group through its involvement 
      in OPL 233 to be allocated to the repayment of the loans;
    - if, at the time of first oil production from OML 113 there continues to be sums 
      outstanding pursuant to the loans, 50% of the net OML 113 cash flow amounts - after 
      providing for the debt service costs, capital expenditure and other operating costs 
      relating to OML 113 - received by EERNL will be paid to SacOil semi-annually to 
      reduce the outstanding loans, up to US$5 million.

    General
    - The settlement agreement terminates the Master Joint Venture Agreement between 
      SacOil and EERNL, dated 24 September 2010, including all rights and obligations 
      consequent thereto.

    OPL 233
    Pursuant to the Board's decision to investigate the termination of the Group's 
    participation in OPL 233 SacOil officially notified Nigdel of its decision to terminate 
    on 19 May 2015. SacOil paid $21.3 million for capex, borrowing and general costs, 
    which costs are recoverable under the provisions of the Farm-In Agreement. Pursuant 
    to the exit SacOil will not have future commitments and obligations associated with 
    the appraisal of OPL 233. Furthermore, the farm-in fee which would have been payable 
    to Nigdel and the transaction fee which would have been payable to Energy Equity 
    Resources Norway Limited of US$10.6 million and US$2.5 million respectively, as 
    disclosed in the prior-year commitments, are no longer due and payable.

On behalf of the Board

Tito Mboweni             Dr Thabo Kgogo                         Marius Damain Matroos
Chairman                 Chief Executive Officer                Finance Director

Johannesburg
21 May 2015


CORPORATE INFORMATION
Registered office and physical address:
1st Floor, 12 Culross Road, Bryanston, 2021
Postal address:
PostNet Suite 211
Private Bag X75, Bryanston, 2021
Contact details:
Tel: +27 (0) 10 591 2260
Fax: +27 (0) 10 591 2268
E-mail: info@sacoilholdings.com
Website: www.sacoilholdings.com

Directors:
Dr Thabo Kgogo (Chief Executive Officer), Marius Damain Matroos (Finance Director), 
Bradley Cerff (Executive Director), Tito Mboweni (Chairman)*, Mzuvukile Maqetuka*, 
Gontse Moseneke**, Stephanus Muller*, Vusi Pikoli*, Ignatius Sehoole*, 
Danladi Verheijen**, Titilola Akinleye**
*    Independent Non-executive Directors
**   Non-executive Directors

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 Fulbright South Africa

Auditors
Ernst & Young Inc.

JSE Sponsor
PSG Capital Proprietary Limited

AIM Nominated Adviser
finnCap Limited

Investor Relations
Instinctif Partners Limited (London and Johannesburg)

Date: 21/05/2015 09:45:00 Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                             . The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.


                                        
Email this JSE Sens Item to a Friend.

Send e-mail to
© 2017 SHARENET (PTY) Ltd, Cape Town, South Africa
Home     Terms & conditions    Privacy Policy
    Security Notice    Contact Details
Market Statistics are calculated by Sharenet and are therefore not the official JSE Market Statistics. The calculation/derivation may include underlying JSE data.