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Sacoil Holdings Limited - Reviewed Condensed Consolidated Interim Results For The Six Months Ended 31 August 2016

Release Date: 30/11/2016 16:00:00      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")


REVIEWED CONDENSED CONSOLIDATED INTERIM RESULTS 
for the six months ended 31 August 2016


HIGHLIGHTS
-  Award of crude trading agreement in Nigeria
-  Successful offtake of a Nigerian crude allocation of 950 000 barrels (475 000 attributable 
   to SacOil) in June 2016 and a second allocation of the same quantity post period
-  Commencement of a thermal stimulation programme at Lagia
-  Partner TOTAL E&P RDC, operator of Block III, successfully completed the acquisition 
   of 244 km 2D seismic data on the licence area
-  Increased availability of new business development opportunities
-  Conclusion of a settlement agreement relating to the OPL 233 legal disputes
-  Post period, commencing an in-depth review of the Lagia reservoir characterisation for 
   overall field optimisation


Dr Thabo Kgogo, Chief Executive Officer of SacOil commented: "Notwithstanding the challenging 
backdrop of volatile global oil markets for the duration of the first half of this financial year, 
we have made positive strides towards the attainment of our key strategic priorities. Our key 
focus areas this period were the expansion of business development activities, optimisation of 
production from the Lagia Oil Field ("Lagia"), improvement in the Group's cost structure, 
resolution of legacy issues, recovery of funds owed to the Group, the safe running of our 
operations and engagement with stakeholders on strategic issues. We are satisfied with the 
progress we have made in each of these initiatives with the limited resources at the Group's 
disposal.

The Group has achieved yet another milestone emanating from the recent addition and integration 
of our crude trading business in Nigeria which generated revenue totalling R341 million. This has 
contributed to the significant improvement in the operational performance of the Group and the 
diversification of revenue streams in line with the strategy. It is expected that this segment of 
the business will continue to provide an additional revenue stream for the remainder of the year.

In an effort to optimise the production profile of Lagia we conducted thermal stimulation on 
existing wells on the field. Despite these operations, the field's technical performance remains 
below expectations and the objective for the remainder of the financial year is to continue to 
optimise production from Lagia to match the existing oil pricing conditions and to ensure that we 
achieve a break-even position for the asset. Lagia is complex in nature and will require some 
time to unlock the real value of the asset. More details on these operations can be found in the 
operational review below.

Our long-term strategy remains to become a leading sustainable, profitable and independent African 
energy company. As such, we continue to evaluate multiple projects in our quest to acquire 
additional cash-generative assets to grow the business. During the period, in the ordinary course 
of business, we looked at a large number of potential target upstream and downstream assets in 
Nigeria, Egypt, Tanzania and South Africa. The evaluation of these assets is ongoing and it is 
expected that our plan to acquire at least one asset will be brought to fruition in the near term. 
The oil and gas mergers and acquisitions ("M&A") market has seen vendors become more pragmatic 
about the valuation of their assets, resulting in a willingness to divest in the prevailing 
environment.

SacOil's Board of directors ("BoD") remains committed to the resolution of the outstanding 
litigation matters and the recovery of funds owed to the Group where realistically obtainable. 
We recognise that litigation inherently is a protracted and costly process, however, to date we 
have concluded the proceedings relating to our exit from OPL 233 in Nigeria. We agreed a 
settlement with Nigdel United Oil Company which has seen both parties withdraw their respective 
claims. This settlement removes any distraction in relation to our previous participation in 
OPL 233. The BoD is confident that this is in the best interest of all our stakeholders, based on 
the sound legal and financial advice we have received. The Group continues to pursue legal action 
against Transcorp and the Encha Group to recover amounts owed pursuant to the withdrawal from 
OPL 281 and under the terms of the written acknowledgement of debt, respectively. The estimated 
timeline to resolve the Transcorp litigation has been deferred, resulting in a provision for 
impairment of R48.1 million to account for the time value of money. The amounts owed to the Group 
under the acknowledgement of debt became due and payable on 29 February 2016, however, Encha has 
failed to uphold its obligation. Due to the lack of financial information available to the Group 
on the financial position of Encha, we have impaired the amount in full to satisfy accounting 
provisions. This does not take away from the fact that Encha has significant assets that the 
Group will target for the recovery of the amount as it continues to progress the legal matter. 
Other matters as outlined in more detail in the litigation section below remain outstanding. 
The BoD continues to make every effort to expedite the resolution of these outstanding matters 
in order to recover the amounts owed to the Group.

We continued our engagement with various stakeholders on matters of strategic importance. 
During June and July 2016 we undertook marketing roadshows in Johannesburg, Cape Town and 
London to raise the profile of the Group and to create an awareness of its investment case 
amongst various stakeholders. 

We continue to focus on minimising the increase in the Group's expenditure and have managed 
to contain a significant component of our cost base during the period. As a result of additional 
business development activities, the ongoing litigation and professional advisory fees relating 
to the Lagia thermal stimulation initiative throughout the period, we incurred an increase in 
business development costs, corporate expenses, legal fees and consultation costs. Our aim is 
to continue minimising the growth in the overall cost base without negatively impacting the 
strategic objectives of the Group.

As a reputable operator adhering to the highest industry standards, HSE matters continue to be 
of the utmost importance to us. We are pleased to report that there were no minor or major 
incidents during the period and the safety records at Lagia and at our other operations were 
well above industry standards.

Looking ahead, we are cognisant of the fact that we will need to obtain scale through the 
further addition of cash-generative assets in order to become a business capable of delivering 
sustainable, long-term growth for its shareholders. Against the backdrop of particularly 
challenging market conditions for the sector, we have developed a solid platform to grow the 
Group and continue to make good headway towards our operational and corporate objectives. 
We are pleased with the Public Investment Corporation's additional investment which saw its 
shareholding in the Company increase from 42.17% to 68.65% in October 2016. This provides a 
cornerstone investor who is supportive of the Group's growth ambitions. Whilst the interim 
results highlight uncertainties that exist with respect to the ability of the Group to remain 
a going concern, the BoD is confident that the Group has adequate cash resources to cover its 
activities until January 2018. The BoD will continue to pursue cash-generative assets and other 
sources of funding to ensure that the deficit which exists in the Group's cash flow forecast 
to February 2019 is addressed. Post this period, it is our expectation that the Group will hold 
sufficient assets to ensure sustainable operations. It is also important to highlight that the 
Group has maintained its debt-free position.

We thank our stakeholders for their continued support as we continue to work towards building 
a sustainable business."

OPERATIONS REVIEW
LAGIA, EGYPT
Optimisation of production from Lagia remained a key priority during the first six months of 
the financial year. This focus followed completion in the prior year of Phase II of the Lagia 
development programme which saw the installation and commissioning of steam facilities for a 
thermal recovery process on existing production wells. Multiple steam cycles were completed 
during the period based on varying parameters with the objective to determine the optimal 
production of the field. As a result of the complex nature of development for this asset 
culminating in excessive water content and suboptimal steam injection for enhanced oil recovery, 
the production performance during the period was below our expectations for the capability of the 
field. These developments, coupled with sustained low oil prices and the attendant market 
discount for heavy crude, have led us to undertake an in-depth review of the Lagia reservoir 
characterisation for overall field optimisation. The overall objective of this review is to 
enable us to prepare the field for increased recovery and improved economics in a higher oil 
price environment. In that regard, the following initiatives are currently under way:

-  optimisation exercise for demulsifier injection to reduce water in the oil which should 
   contribute to a reduction in the Group's operating cost base;
-  reassessment of the operational cost base to ensure a break-even position is achieved; and
-  the identification of possible zones for water shut-off and steam injection optimisation 
   following the review of petrophysical and production data from the wells. This will lead to 
   advancing the analysis of suitable technologies for heightened oil recovery.

These activities will remain the focal point of operations at Lagia in Q4 of the 2016 calendar 
year and will require minimal capital expenditure.

CRUDE TRADING, NIGERIA
The Nigerian crude trading joint operation with Energy Equity Resources Norway Limited ("EERNL") 
generated an additional revenue stream for the Group following the offtake of a crude allocation 
of 950 000 barrels in June 2016. SacOil's share of this offtake was 475 000 barrels. The offtake 
of a second allocation of 950 000 barrels, of which 50% is attributable to SacOil, took place in 
September 2016, post the interim reporting period. The joint operation will continue to seek 
additional allocations from the Nigerian National Petroleum Corporation ("NNPC") in line with 
the terms of the agreement concluded in April 2016. The Group's right to acquire crude from the 
NNPC will expire in March 2017. We are in the process of applying for the renewal of the crude 
trading agreement. Whilst this is dependent on the discretion of the NNPC, we remain hopeful for 
a positive outcome from the application process.

BLOCK III, DEMOCRATIC REPUBLIC OF CONGO
During June 2016 Total E&P RDC ("TOTAL"), operator of Block III, successfully completed the 
acquisition of 244 km of 2D seismic data and is in the process of interpreting and integrating 
the data with previously acquired gravity and magnetic information. It is expected that the 
seismic processing and interpretation will be completed during Q2 of 2017. If possible prospects 
and an identifiable well location are established, the plan is to drill a well shortly thereafter. 

As reported previously, the seismic survey did not encroach on the Virunga National Park. 
TOTAL continues to carry SacOil's share of exploration costs relating to Block III under the 
terms of the Farm-in Agreement. The licence for Block III will be up for renewal in January 2018.

BLOCK 1, MALAWI
In Malawi, SacOil, as operator, is in the process of finalising the environmental and social 
impact assessments as well as the evaluation and processing of the country-wide gravity and 
magnetic data over Block 1. Desktop studies on the area are also under way which are yielding 
encouraging results. It is expected that the studies and assessments will be completed by 
February 2017. The licence for Block 1 will be up for renewal in August 2017.

PETROLEUM EXPLORATION LICENCES ("PELs") 123, 124 AND 125, BOTSWANA
The environmental and social impact assessment has now been approved by the Minister of Minerals. 
Desktop studies of PELs 123, 124 and 125 are ongoing and are expected to be completed by 
February 2017. Licences will be up for renewal in June 2017.

BIOKO TERMINAL, EQUATORIAL GUINEA
The parties have compiled the pre-feasibility studies and have made the submission to the 
Government of Equatorial Guinea for its consideration, following which the parties will agree 
on the way to proceed with the project. The project remains a long-term play split into two phases. 
Storage of approximately 680 000 cubic metres for refined products will be constructed during the 
first phase. The subsequent phase will deal with the development of crude storage.

FINANCIAL REVIEW
The Group generated a loss after tax of R221.4 million (2015: profit of R2.8 million), a basic 
loss per share of 6.77 cents (2015: basic earnings per share of 0.32 cent) and a basic headline 
loss per share of 6.77 cents (2015: basic headline earnings per share of 0.25 cent) for the 
period ended 31 August 2016. Key contributing factors were the strengthening of the Rand against 
the US Dollar ("US$") which resulted in foreign exchange losses totalling R61.4 million 
(2015: R57.5 million in foreign exchange gains due to the weakening of the Rand) arising from 
the revaluation of the Group's US$ denominated assets, the provision for impairment of 
R164.0 million with respect to other financial assets and the underperformance of the Lagia 
asset. These losses were partially off-set by an increase of R31.9 million in investment income 
for the period. 

REVENUE AND COST OF SALES
Crude trading
The Group continued to diversify its operations by adding the crude trading business in Nigeria 
which generated R340.9 million in revenue during the period. The gross cost of procuring crude 
from the NNPC with respect to the offtake agreement was R338.8 million, thereby generating a 
gross profit of R2.1 million for the period.

Lagia
The challenges experienced, as highlighted within the operations review, resulted in Lagia 
contributing lower-than-expected revenue of R3.2 million (2015: R3.0 million). Cost of sales 
increased by R2.7 million to R9.9 million primarily due to higher operating costs associated 
with steaming operations. 

OTHER INCOME
Other income at 31 August 2015 included foreign exchange gains totalling R57.5 million. 
The strengthening of the Rand against the US$ during the period generated foreign exchange 
losses totalling R61.4 million which have been classified under "other operating expenses". 
These losses arose from the revaluation of the Group's US$ denominated other financial assets.

INVESTMENT INCOME
Management continues to pursue the recovery of the receivable due from Encha Energy ("Encha"). 
Investment income at 31 August 2016 includes an interest accrual of R40.3 million (2015: RNil) 
relating to this receivable as further explained in note 8. Interest received on the Group's 
cash and cash equivalents and interest on other financial assets decreased by R2.2 million and 
R6.2 million, respectively. High level overviews of the Group's cash and cash equivalents, 
financial assets and progress on the recovery of the Encha receivable are provided below.

PROVISION FOR IMPAIRMENT OF OTHER FINANCIAL ASSETS
The SacOil BoD continues to pursue the recovery of amounts owed to the Group as disclosed in the 
litigation section. Provisions for impairment, in order to comply with accounting and auditing 
provisions, have been recognised with respect to the Encha receivable and Transcorp Refund as 
indicated in note 8. These provisions are recorded under "other operating costs".

OTHER OPERATING COSTS
Excluding the impact of the foreign exchange losses referred to above, the provision for 
impairment of the Transcorp, EERNL and Encha receivables, business development activities, 
the amortisation and depreciation of assets, and the impairment of the contingent consideration 
at 31 August 2015, other operating costs increased by R8.4 million relative to the prior 
comparative period. Improved engagement with various stakeholders, ongoing litigation and 
consultations regarding the Lagia thermal stimulation initiative resulted in increased corporate 
expenses, legal fees and consultation costs, respectively. The increase in the Group's 
remuneration costs is reflective of inflationary salary adjustments coupled with an increase in 
headcount in Egypt. A breakdown of the Group's other operating expenses is provided in note 3. 

OIL AND GAS PROPERTIES
The investment in the thermal stimulation facilities at Lagia resulted in additions totalling 
R6.6 million (29 February 2016: R55.4 million) to the Group's oil and gas properties. 
This increase was off-set by foreign exchange losses of R15.3 million on translation of foreign 
operations (29 February 2016: foreign exchange gains of R46.8 million), disposals totalling 
R0.2 million (29 February 2016: RNil) and depletion of R2.6 million (29 February 2016: 
R2.3 million). Movements in the Group's oil and gas properties are also provided in note 7. 

OTHER FINANCIAL ASSETS
As noted above, the Group's other financial assets (current and non-current) were negatively 
impacted by the strengthening of the Rand against the US$ and the provisions for impairment of 
R48.1 million and R115.8 million against the Transcorp and Encha receivables, respectively, 
as disclosed in note 8. Foreign exchange losses with respect to other financial assets totalled 
R50.6 million for the period, which were off-set by interest on the Encha receivable of 
R40.3 million and interest of R11.6 million arising from the unwinding of the discount applied 
to the recognition of the contingent consideration. The net movement in the Group's other 
financial assets during the period was R162.6 million. These assets are disclosed in note 8.

CASH AND CASH EQUIVALENTS
The Group utilised R54.9 million (2015: R40.1 million) during the period on the installation of 
thermal stimulation facilities at Lagia (R6.6 million), business development activities 
(R6.7 million), consulting fees (R6.8 million), corporate costs (R3.7 million), legal fees 
(R4.5 million), employee costs (R15.6 million) and other operating expenses (R11.0 million). 
At 31 August 2016 the Group's cash balances stood at R52.4 million, sufficient for its activities 
for at least the next 12 twelve months.

OTHER
Movements in the Group's exploration and evaluation assets, other intangible assets, property, 
plant and equipment, inventories, trade receivables, deferred tax liability and trade and other 
payables were not significant for the period under review.

LITIGATION UPDATE
OPL 281
As previously reported, SacOil 281 Nigeria Limited ("SacOil 281") terminated its participation 
with Transnational Corporation of Nigeria Plc ("Transcorp"), the operator of OPL 281.

SacOil 281 contributed US$12.5 million towards farm-in fees on 28 February 2011, which fees 
contractually were to be refunded with interest by Transcorp pursuant to the termination. 
Notwithstanding the receipt of Transcorp's acknowledgement of its refund obligation, SacOil 281 
subsequently received notice from Transcorp that its termination of the Farm-out and Participation
 Agreement ("FoPA") in December 2014 was wrongful and amounted to a repudiation of the FoPA. 
As provided for in the FoPA, SacOil 281 filed a notice for arbitration with the Nigerian Chartered 
Institute of Arbitrators, Nigerian branch on 28 August 2015 to recover its farm-in and related 
fees plus interest thereon. 

On 18 June 2015 Transcorp in response filed the following two court applications in the High 
Court: Lagos State: (i) alleging the repudiation of the FoPA by SacOil 281, claiming the sum of 
US$50 million as special damages for wrongful termination; and (ii) challenging the validity, 
applicability and appointment of arbitrators and the arbitration clause in the FoPA. SacOil 281 
opposed these proceedings and on 31 May 2016 the High Court: Lagos State ruled against SacOil 281 
on "matter (ii)" but granted SacOil 281 leave to appeal on 30 June 2016. The appeal was scheduled 
to be mentioned on 28 November 2016 with a probable hearing during mid-2017. Both parties have 
agreed to defer the court date in order to discuss a possible settlement. In the event that the 
Group is unable to reach a settlement with Transcorp, our Nigerian counsel remains confident 
that SacOil 281's prospects to successfully overturn the court a quo's ruling in the Court of 
Appeal remain very good; and that the likelihood of Transcorp succeeding in its claim for 
US$50 million is low as assignment was not obtained, nor has evidence of production been provided. 
The arbitration date would be around the first half of 2018 should an amicable settlement not 
be reached. We will update our shareholders in due course regarding the outcome of settlement 
negotiations with Transcorp.

MR JOSEPH MODIBANE
Two actions were instituted by Mr Joseph Modibane against the Company. In the first action he 
claimed R67.2 million plus interest and costs on the basis that he was entitled to damages 
pursuant to a breach of an agreement. In the second action he claimed R80 million plus interest 
and costs on the basis that he was defamed by an announcement published by the Company. The 
Company is defending both actions. A SENS announcement published on 28 February 2013 indicated 
that Mr Modibane passed away and it remains to be seen whether an executor of Mr Modibane's estate 
elects to persist with the two actions.

MR ROBIN VELA
The Company instituted legal action against Mr Robin Vela (its former CEO) in which it claimed 
an amount of R3.3 million together with interest in respect of taxes that became due to the 
South African Revenue Service 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 R0.3 million allegedly 
owing in respect of unpaid leave, an amount of R2.8 million allegedly due in respect of a bonus 
and an amount of R16.9 million allegedly owing in respect of the breach of a share option 
agreement. In addition, Mr Vela is also claiming interest on these amounts. Both parties have 
delivered their discovery affidavits.

1 November 2016 was allocated as a trial date, but because our counsel was not available on the 
date allocated, by agreement between the parties, the matter was removed from the trial roll of 
1 November 2016. The Company awaits the allocation of a trial date.

MR RICHARD LINNELL
Mr Richard Linnell (the Company's former Chairman) instituted legal action against the 
Company during September 2016 in which Mr Linnell claims, amongst other matters, payment of 
R14.7 million together with interest and the reinstatement of 12.6 million share options 
which the Company contends have lapsed. The Company is defending the action and a plea on 
behalf of the Company will in due course be delivered.

ENCHA GROUP LIMITED AND ENCHA ENERGY PROPRIETARY LIMITED
The Company instituted legal action against Encha Energy Proprietary Limited ("Encha Energy") 
and Encha Group Limited ("Encha Group") to claim the payment of R115.8 million (inclusive of 
interest) under the terms of the written acknowledgement of debt provided by Encha Energy, 
and in respect of which Encha Group bound itself as surety. The action is defended and the 
defendants have delivered their pleas. The Company awaits the allocation of a trial date.

OPL 233
The matter has been settled as disclosed in note 15.

OUTLOOK
The volatility within the global oil markets is expected to persist and will require us to 
continue to operate at low oil prices. Over the next few months we will continue to aggressively 
pursue the acquisition of cash-generative assets to ensure the sustainability of the Group whilst 
also finalising the in-depth review of the Lagia reservoir characterisation. We remain hopeful 
that the NNPC will grant the Group a renewal of the crude trading agreement which will enable us 
to grow that segment of the business. Cost containment and the resolution of legacy issues will 
also remain key focus areas.

GOING CONCERN
The Group continues to rely on its ability to successfully raise further financing to fund future 
working capital and business development needs. The Board remains reasonably confident that 
it will manage the material uncertainties that exist which are highlighted in note 14 to the 
condensed consolidated interim results. The condensed consolidated interim results have therefore 
been prepared on a going concern basis.

CHANGE IN DIRECTORATE
The following directors resigned from the BoD of SacOil:
Bradley Cerff on 25 July 2016
Steve Muller on 16 September 2016
Danladi Verheijen on 19 September 2016

ABOUT SACOIL
SacOil is a South African based independent African oil and gas company, dual-listed on the JSE 
and AIM. The Company has a diverse portfolio of assets spanning production in Egypt; exploration 
and appraisal in the Democratic Republic of Congo, Malawi and Botswana; and midstream projects 
including crude trading in Nigeria and a terminal project in Equatorial Guinea. Our focus as a 
Group is on delivering energy for the African continent by using Africa's own resources to meet 
the significant growth in demand expected over the next decade. The Company continues to evaluate 
industry opportunities throughout Africa as it seeks to establish itself as a leading, full-cycle 
pan-African oil and gas company.


CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                                                                           Reviewed        Reviewed
                                                                      Six months to   Six months to 
                                                                          31 August       31 August
                                                                               2016            2015
                                                              Notes               R               R
Revenue                                                                 344 121 617       3 001 496 
Cost of sales                                                          (348 721 804)     (7 179 407)
Gross loss                                                               (4 600 187)     (4 177 911)
Other income                                                                399 077      60 720 459 
Other operating costs                                                  (275 363 570)    (59 921 946)
Operating loss                                                    3    (279 564 680)     (3 379 398)
Investment income                                                 4      54 932 952      23 073 720 
(Loss)/profit before taxation                                          (224 631 728)     19 694 322 
Taxation                                                                  3 197 132     (16 921 224)
(Loss)/profit for the period                                           (221 434 596)      2 773 098 
                              
Other comprehensive (loss)/income:                              
Items that may be reclassified to profit or loss in subsequent periods:
Exchange differences on translation of foreign operations               (11 669 350)     25 271 170 
Other comprehensive (loss)/income for the year net of taxation          (11 669 350)     25 271 170 
Total comprehensive (loss)/income for the period                       (233 103 946)     28 044 268 
                              
(Loss)/profit attributable to:                              
Equity holders of the parent                                           (221 434 596)     10 558 602 
Non-controlling interest                                                          -      (7 785 504)
                                                                       (221 434 596)      2 773 098 
                              
Total comprehensive (loss)/income attributable to:                              
Equity holders of the parent                                           (233 103 946)     35 829 772 
Non-controlling interest                                                          -      (7 785 504)
                                                                       (233 103 946)     28 044 268 
                              
(Loss)/earnings per share                               
Basic (cents)                                                     6           (6.77)           0.32 
Diluted (cents)                                                   6           (6.77)           0.32


CONSOLIDATED STATEMENT OF FINANCIAL POSITION                              
                                                                           Reviewed         Audited
                                                                              As at           As at
                                                                          31 August     29 February 
                                                                               2016            2016
                                                              Notes               R               R
ASSETS                              
Non-current assets                              
Exploration and evaluation assets                                        51 049 820      50 973 446 
Oil and gas properties                                            7     154 543 486     166 030 112 
Other financial assets                                            8     472 330 341     253 799 364 
Other intangible assets                                                  49 877 781      57 845 420 
Property, plant and equipment                                             1 298 362       1 077 478 
Total non-current assets                                                729 099 790     529 725 820 
Current assets                              
Other financial assets                                            8       1 983 876     383 144 684 
Inventories                                                               8 650 535       9 329 655 
Trade and other receivables                                               3 018 121       3 404 645 
Cash and cash equivalents                                                52 414 365     107 349 463 
Total current assets                                                     66 066 897     503 228 447 
Total assets                                                            795 166 687   1 032 954 267 
                              
EQUITY AND LIABILITIES                              
Shareholders' equity                              
Stated capital                                                        1 216 503 883   1 216 503 883 
Reserves                                                                 66 415 977      77 961 913 
Accumulated loss                                                       (596 688 014)   (375 253 418)
Total shareholders' equity                                              686 231 846     919 212 378 
LIABILITIES                              
Non-current liabilities                              
Deferred tax liability                                                   75 328 897      78 526 029 
Total non-current liabilities                                            75 328 897      78 526 029 
Current liabilities                              
Trade and other payables                                                 20 755 124      22 365 040 
Current tax payable                                                      12 850 820      12 850 820 
Total current liabilities                                                33 605 944      35 215 860 
Total liabilities                                                       108 934 841     113 741 889 
Total equity and liabilities                                            795 166 687   1 032 954 267 
                              
Number of shares in issue                                             3 269 836 208   3 269 836 208 
Net asset value per share (cents)                                             20.99           28.11
Net tangible asset value per share (cents)                                    17.90           24.78


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY                                                                                
                                                                                                         Total equity
                                                   Foreign                                               attributable           Non-
                                                  currency   Share-based                                    to equity    controlling   
                                      Stated   translation       payment          Total    Accumulated     holders of       interest          Total
                                     capital       reserve       reserve       reserves           loss     the parent         ("NCI")        equity
                                           R             R             R              R              R              R              R              R
Balance at 29 February 2016    1 216 503 883    70 176 479     7 785 434     77 961 913   (375 253 418)   919 212 378              -    919 212 378 
Changes in equity:                                                                                 
Loss for the period                        -             -             -              -   (221 434 596)  (221 434 596)             -   (221 434 596)
Other comprehensive loss for 
  the period                               -   (11 669 350)            -    (11 669 350)             -    (11 669 350)             -    (11 669 350)
Total comprehensive loss for 
  the period                               -   (11 669 350)            -    (11 669 350)  (221 434 596)  (233 103 946)             -   (233 103 946)
Share options issued                       -             -       123 414        123 414              -        123 414              -        123 414 
Total changes                              -   (11 669 350)      123 414    (11 545 936)  (221 434 596)  (232 980 532)             -   (232 980 532)
Balance at 31 August 2016      1 216 503 883    58 507 129     7 908 848     66 415 977   (596 688 014)   686 231 846              -    686 231 846 
                                                                                
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 
Changes in equity:                                                                                 
Profit/(loss) for the period               -             -             -              -     10 558 602     10 558 602     (7 785 504)     2 773 098 
Other comprehensive income 
  for the period                           -    25 271 170             -     25 271 170              -     25 271 170              -     25 271 170 
Total comprehensive income/(loss) 
  for the period                           -    25 271 170             -     25 271 170     10 558 602     35 829 772     (7 785 504)    28 044 268 
Total changes                              -    25 271 170             -     25 271 170     10 558 602     35 829 772     (7 785 504)    28 044 268 
Balance at 31 August 2015      1 216 503 883    33 987 791     6 889 847     40 877 638   (438 095 963)   819 285 558     (3 367 855)   815 917 703


CONSOLIDATED STATEMENT OF CASH FLOWS                    
                                                                           Reviewed        Reviewed
                                                                      Six months to   Six months to 
                                                                          31 August       31 August
                                                                               2016            2015
                                                                                  R               R
Cash flows from operating activities                    
Cash used in operations                                                 (50 338 910)    (40 467 306)
Interest income                                                           2 951 017       5 191 403
Net cash used in operating activities                                   (47 387 893)    (35 275 903)
Cash flows from investing activities                    
Purchase of exploration and evaluation assets                              (476 219)       (435 121)
Purchase of property, plant and equipment                                  (446 364)       (908 104)
Purchase of oil and gas properties                                       (6 624 622)     (6 474 274)
Purchase of other intangible assets                                               -        (204 103)
Receipts from loans and receivables                                               -      61 091 500 
Net cash (used in)/from investing activities                             (7 547 205)     53 069 898
Cash flows from financing activities                    
Repayment of other financial liabilities                                          -     (57 888 500)
Net cash used in financing activities                                             -     (57 888 500)
Total movement in cash and cash equivalents for the period              (54 935 098)    (40 094 505)
Foreign exchange gains on cash and cash equivalents                               -       6 440 069
Cash and cash equivalents at the beginning of the period                107 349 463     229 431 001
Cash and cash equivalents at the end of the period                       52 414 365     195 776 565


1   BASIS OF PREPARATION
    The condensed consolidated interim financial statements of the Group, comprising SacOil Holdings 
    Limited and its subsidiaries (together "the Group"), for the six months ended 31 August 2016, 
    have been prepared in accordance with the recognition and measurement criteria of International 
    Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards 
    Board ("IASB"), the preparation and disclosure requirements of IAS 34 - Interim Financial 
    Reporting, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee, 
    the Financial Pronouncements as issued by the Financial Reporting Standards Council, the Listings 
    Requirements of the JSE Limited and in the manner required by the South African Companies Act 
    No. 71, 2008 (as amended). Accordingly, certain information and footnote disclosures normally 
    included in annual financial statements prepared in accordance with IFRS, as issued by the IASB, 
    have been omitted or condensed as is normal practice.

    PRINCIPAL ACCOUNTING POLICIES
    The same accounting policies, presentation and methods of computation have been followed in these 
    condensed consolidated interim financial statements of the Group as those applied in the 
    preparation of the Group's annual financial statements for the year ended 29 February 2016. 
    The following improvements arising from the IASB's annual improvements projects and the 
    amendments to IFRS listed below, effective for financial periods beginning after 1 January 2016, 
    were effective for the first time during this interim period and did not have an impact on the 
    Group's results:

    -  Amendments to IAS 1 - Disclosure Initiative
    -  Amendments to IFRS 10, IFRS 12 and IAS 28 - Investment Entities: Applying the 
       Consolidation Exemption
    -  Amendment to IFRS 11 - Joint Arrangements, regarding acquisition of an interest in a 
       joint operation
    -  Amendment to IAS 16 - Property, Plant and Equipment and IAS 38 - Intangible Assets, 
       regarding depreciation and amortisation
    -  Amendment to IAS 16 - Property, Plant and Equipment and IAS 41 - Agriculture, regarding 
       bearer plants
    -  Amendment to IFRS 10 and IAS 28 regarding the sale or contribution of assets between an 
       investor and its associate or joint venture
    -  Amendment to IAS 27 - Separate Financial Statements, regarding the equity method
    -  Amendment to IFRS 14 - Regulatory Deferral Accounts
    -  Improvement to IFRS 5 - Non-current Asset Held for Sale and Discontinued Operations
    -  Improvement to IFRS 7 - Financial Instruments: Disclosures
    -  Improvement to IAS 19 - Employee Benefits

    Details pertaining to the amendments or improvements referred to above are provided in the 
    Group annual financial statements for the year ended 29 February 2016.

    The amendment to IAS 34 - Interim Financial Reporting has been applied in the preparation of 
    these condensed consolidated interim financial statements and other financial information in 
    the interim financial report. The amendment clarifies what is meant by the reference in the 
    standard to "information disclosed elsewhere in the interim financial report" and further 
    requires a cross-reference from the interim financial statements to the location of that other 
    financial information.

    These condensed consolidated interim results have been prepared on a going concern basis. 

    All monetary information is presented in the functional currency of the Company, which is 
    the South African Rand.

    NOTES TO OIL AND GAS DISCLOSURE
    In accordance with AIM Guidelines Willem de Meyer, Group Executive: Strategy and Business 
    Development, is the qualified person who has reviewed the technical information contained in 
    this news release. Willem has 34 years' experience in the oil and gas industry with a 
    B.Sc (Hons) degree in geophysics and a Masters Degree in Commerce focused on Mineral 
    Economics. He is also registered with the South African Council for Natural Scientific 
    Professions ("SACNASP").

2   PREPARATION OF THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS AND THE AUDITORS' 
    REVIEW REPORT
    The directors take full responsibility for the preparation of these condensed consolidated 
    interim financial statements of the Group for the six months ended 31 August 2016. 
    The condensed consolidated interim financial statements have been prepared under the 
    supervision of the Chief Financial Officer, Damain Matroos CA (SA). 

    These condensed consolidated interim financial statements have been reviewed by Ernst & Young 
    Inc., the Group's auditors. A copy of the auditors' unqualified review opinion, which includes 
    an emphasis of matter paragraph for the going concern matters noted in note 14, is available 
    for inspection at the registered office of the Company.

                                                                          31 August       31 August
                                                                               2016            2015
                                                              Notes               R               R 
3   OPERATING LOSS                              
    Provision for impairment of financial assets                       (163 974 144)    (26 082 765)
    Gain on remeasurement of asset held for sale                                  -       3 221 937 
    Foreign exchange (losses)/gains                                     (61 369 036)     57 498 522 
    Bad debts recovered                                                     399 077               - 
    Corporate costs                                                      (3 724 220)     (2 146 633)
    External auditors' remuneration                                      (1 800 209)     (1 242 293)
    Audit fees                                                           (1 780 009)     (1 242 293)
    Other services                                                          (20 200)              - 
    Internal auditors' remuneration                                        (102 055)        (78 520)
    Employee benefit expense                                            (15 602 080)    (14 051 527)
    Accounting fees                                                               -         (25 000)
    Consulting fees                                                      (6 763 284)     (3 657 527)
    Business development                                                 (6 714 119)       (776 565)
    Legal fees                                                           (4 473 597)     (2 383 706)
    Travel and accommodation                                             (1 921 365)     (2 679 415)
    Depreciation and amortisation                                        (5 917 378)     (4 100 114)
    Oil and gas properties                                        7      (2 624 991)     (1 104 215)
    Property, plant and equipment                                          (225 480)       (149 605)
    Exploration and evaluation assets                                      (399 845)              - 
    Other intangible assets                                              (2 667 062)     (2 846 294)
    Rentals - premises                                                   (1 345 786)     (1 046 968)
    Broker's fees                                                          (445 959)       (366 153)
    Share-based payment expense                                            (123 414)              - 
                                        
4   INVESTMENT INCOME                              
    Interest receivable - loans                                          40 334 716               - 
    Interest received - cash and cash equivalents                         2 951 017       5 191 382 
    Interest on financial assets                                         11 647 219      17 882 338 
                                                                         54 932 952      23 073 720 
                                        
    Interest from loans of R40.3 million is attributable to the accrual of interest on the 
    receivable outstanding from Encha Energy which is disclosed in note 8.

5   SEGMENTAL REPORTING
    The Group operates in six geographical locations which form the basis of the information 
    evaluated by its chief operating decision-maker. For management purposes the Group is organised 
    and analysed by these locations. These locations are: South Africa, Egypt, Nigeria, the DRC, 
    Botswana and Malawi. Operations in South Africa relate to head office activities of the Group 
    which include the general management, financing and administration of the Group.
                                                                                          
                                          South Africa          Egypt        Nigeria            DRC         Malawi       Botswana   Eliminations   Consolidated
                                                     R              R              R              R              R              R              R              R
    For the six months 
      ended 31 August 2016                                                                                
    Revenue                                          -      3 211 927    340 909 690              -              -              -              -    344 121 617 
    Cost of sales                                    -     (9 916 452)  (338 805 352)             -              -              -              -   (348 721 804)
    Gross (loss)/profit                              -     (6 704 525)     2 104 338              -              -              -              -     (4 600 187)
    Other income                             2 799 303              -        280 545              -              -         70 765     (2 751 536)       399 077 
    Investment income                       45 980 359              -              -      8 952 593              -              -              -     54 932 952 
    Other operating expenses              (209 350 324)   (13 956 565)   (40 982 162)   (13 032 978)             -       (793 077)     2 751 536   (275 363 570)
    Taxation                                         -              -              -      3 197 132              -              -              -      3 197 132 
    Loss for the period                   (160 570 662)   (20 661 090)   (38 597 279)      (883 253)             -       (722 312)             -   (221 434 596)
                                                                                          
    Segment assets - non-current           373 921 939    204 091 042    114 641 492    238 891 312         97 776        382 977   (202 926 748)   729 099 790 
    Segment assets - current                48 086 562     17 914 349         33 897         27 910              -          4 179              -     66 066 897 
    Segment liabilities - non-current                -   (118 685 214)             -   (155 680 159)             -     (3 890 272)   202 926 748    (75 328 897)
    Segment liabilities - current          (26 106 592)    (7 038 511)             -              -              -       (460 841)             -    (33 605 944)
                                                                                          
    For the six months 
      ended 31 August 2015                                                                                
    Revenue                                          -      3 001 496              -              -              -              -              -      3 001 496 
    Cost of sales                                    -     (7 179 407)             -              -              -              -              -     (7 179 407)
    Gross loss                                       -     (4 177 911)             -              -              -              -              -     (4 177 911)
    Other income                            32 828 188         55 192     20 945 842     11 565 114              -              -     (4 673 877)    60 720 459
    Investment income                       10 296 772              -        382 949     12 393 999              -              -              -     23 073 720 
    Other operating expenses               (29 386 523)    (7 080 238)      (749 438)   (26 083 610)             -     (1 296 014)     4 673 877    (59 921 946)
    Taxation                                 5 284 191              -           (212)   (22 205 203)             -              -              -    (16 921 224)
    Profit/(loss) for the period            19 022 628    (11 202 957)    20 579 141    (24 329 700)             -     (1 296 014)             -      2 773 098 
                                                                                          
    Segment assets - non-current           384 868 684    213 938 488              -    334 446 786      1 196 742        821 669   (336 452 691)   598 819 678 
    Segment assets - current               396 746 936     22 329 432    126 734 660     47 935 768              -              -              -    593 746 796 
    Segment assets - asset held for sale             -              -     25 061 882              -              -              -              -     25 061 882 
    Segment liabilities - non-current               (1)   (38 681 231)             -   (178 545 060)             -     (2 207 275)   115 401 361   (104 032 206)
    Segment liabilities - current          (53 131 310)    (7 668 518)      (132 857)  (211 242 630)             -       (441 250)             -   (272 616 565)
    Segment liabilities - liabilities 
      directly associated with asset 
      held for sale                        (25 061 882)             -              -              -              -              -              -    (25 061 882)
                                                                                          
    BUSINESS SEGMENTS
    The operations of the Group comprise oil and gas exploration and production, and crude trading. 
    The activities currently undertaken in Equatorial Guinea with respect to the development of the 
    Bioko Terminal are not significant at this stage and have not been separately disclosed. These 
    activities therefore do not meet the recognition criteria for reportable segments.

    REVENUE
    The Group's reported revenue is generated from the Egyptian General Petroleum Corporation 
    ("EGPC") and Trafigura Pte Limited, with respect to oil sales and crude trading, respectively. 
    These revenues are attributed to the Egypt and Nigeria segments, respectively. 

    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.                                                                                

                                                                          31 August       31 August
                                                                               2016            2015
                                                                                  R               R 
6   (LOSS)/EARNINGS PER SHARE                    
    Basic (cents)                                                             (6.77)           0.32 
    Diluted (cents)                                                           (6.77)           0.32 
                              
    (Loss)/profit for the period used in the calculation of the 
      basic and diluted (loss)/earnings per share                      (221 434 596)     10 558 602 
                              
    Weighted average number of ordinary shares used in the 
      calculation of basic (loss)/earnings per share                  3 269 836 208   3 269 836 208 
    Issued shares at the beginning of the reporting period            3 269 836 208   3 269 836 208 
    Effect of shares issued during the reporting period (weighted)                -               -
    Add: Dilutive share options                                             148 718               -
    Weighted average number of ordinary shares used in the 
      calculation of diluted (loss)/earnings per share                3 269 984 926   3 269 836 208 
                              
    Headline (loss)/earnings per share                    
    Basic (cents)                                                             (6.77)           0.25 
    Diluted (cents)                                                           (6.77)           0.25 
                              
    Reconciliation of headline (loss)/earnings                    
    (Loss)/profit attributable to equity holders of the parent         (221 434 596)     10 558 602 
                              
    Adjusted for:                    
    Gain on remeasurement of asset held for sale                                  -      (3 221 937)
    Tax effect of adjustment                                                      -         902 142 
    Headline (loss)/earnings for the period                            (221 434 596)      8 238 807 
                              
                                                                                                  R
7   OIL AND GAS PROPERTIES                    
    Cost                     
    At 1 March 2015                                                                     123 144 421 
    Additions                                                                            55 444 498 
    Translation of foreign operations                                                    46 833 512 
    At 29 February 2016                                                                 225 422 431 
                              
    At 1 March 2016                                                                     225 422 431 
    Additions                                                                             6 624 622 
    Disposals                                                                              (234 234)
    Translation of foreign operations                                                   (15 252 023)
    At 31 August 2016                                                                   216 560 796 
                              
    Depletion and impairment                    
    At 1 March 2015                                                                        (274 713)
    Impairment                                                                          (56 850 000)
    Depletion                                                                            (2 267 606)
    At 29 February 2016                                                                 (59 392 319)
                              
    At 1 March 2016                                                                     (59 392 319)
    Depletion                                                                            (2 624 991)
    At 31 August 2016                                                                   (62 017 310)
                              
    Net book value                    
    At 29 February 2016                                                                 166 030 112 
    At 31 August 2016                                                                   154 543 486

                                                                          31 August     29 February
                                                                               2016            2016
                                                                                  R               R 
8   OTHER FINANCIAL ASSETS                    
    Non-current                    
    Contingent consideration (footnote 1)                               188 322 245     196 315 073 
    Transcorp Refund (footnote 2)                                       277 432 413               -
    Loan due from EERNL                                                  54 725 111      57 484 291 
                                                                        520 479 769     253 799 364 
    Less: Provision for impairment (footnote 4)                         (48 149 428)              -
                                                                        472 330 341     253 799 364 
                              
    Current                    
    Transcorp Refund (footnote 2)                                                 -     305 763 874 
    Loan due from EERNL (footnote 5)                                    157 488 557     173 571 324 
    Advance payment against future services (footnote 3)                115 824 716      75 490 000 
    Deferred consideration on disposal of Greenhills Plant                1 983 876       1 890 810 
                                                                        275 297 149     556 716 008 
    Less: Provision for impairment (footnote 4)                        (273 313 273)   (173 571 324)
                                                                          1 983 876     383 144 684 
    Total                                                               474 314 217     636 944 048 
                              
    The Transcorp Refund and the advance payment against future services are currently the subject 
    of protracted legal proceedings.  

    1  The contingent consideration represents SacOil DRC's right to receive cash from TOTAL 
       upon the occurrence of certain future events under the terms of the Farm-in Agreements 
       concluded in 2011 and 2012. The agreements were concluded between TOTAL and Semliki. 
       Pursuant to the reorganisation completed in the prior financial year SacOil's interest in 
       Block III and its rights under the various agreements relating to the asset were 
       transferred to SacOil DRC. The valuation assumptions for the contingent consideration are 
       consistent with those applied at 29 February 2016. The movement in the contingent 
       consideration is attributable to imputed interest of R9.0 million (29 February 2016: 
       R26.4 million) and a foreign exchange loss of R16.9 million (29 February 2016: 
       R91.1 million foreign exchange gain).

    2  An update on the Transcorp arbitration is provided in the Litigation section of the 
       commentary. As noted in the update, SacOil and Transcorp are negotiating a possible 
       settlement with respect to the receivable of R277.4 million. The decrease in the 
       receivable during the period is attributable to foreign exchange losses of R28.3 million 
       due to the strengthening of the Rand (29 February 2016: foreign exchange gain of 
       R84.9 million). The receivable has been reclassified as long term as it is estimated that 
       the Transcorp litigation will likely be resolved during 2018.

    3  The amount due represents Encha Energy's indebtedness to SacOil Holdings Limited 
       ("Encha Debt") under the Acknowledgement of Debt Agreement ("Agreement") concluded between 
       the two parties on 28 February 2013. This debt became due and payable on 29 February 2016 
       and remains unpaid as at the date of the condensed consolidated interim financial 
       statements. The financial asset recognised at 31 August 2016 is R115.8 million 
       (29 February 2016: R75.5 million) representing the advance of R75.5 million and interest 
       totalling R40.3 million (29 Feburary 2016: RNil) calculated at the prime rate plus 3% 
       ("default interest"). The Agreement provides for the accrual of default interest on the 
       amount outstanding from 28 February 2013 until such time the debt is paid in full. 

    4  The SacOil Board of directors ("BoD") continues to pursue the recovery of the Transcorp 
       Refund. Inherently litigation is a protracted process which often leads to delays in the 
       resolution of outstanding matters. Our legal counsel has estimated that the matter will 
       likely be resolved during the first half of 2018. This delay has affected the valuation of 
       the receivable and a provision for impairment of R48.1 million has been recognised to take 
       into account the impact of the time value of money.

       The EERNL receivable of R157.5 million (29 February 2016: R173.6 million) has been 
       provided for pending the finalisation of the settlement agreement with Nigdel United Oil 
       Company ("Nigdel"). The settlement agreement with EERNL provided for the recovery of this 
       amount from Nigdel. As disclosed in note 15, the settlement agreement with Nigdel was 
       subsequently concluded on 11 October 2016. 

       For the duration of the Agreement referred to above, as provided for therein, the Company 
       received certificates from Encha's auditors which confirmed at each reporting date that the 
       net asset value of the Encha Group exceeded R100 million as a basis to support the 
       recoverability of the amount owed. Since the expiry of the Agreement and the subsequent 
       default by Encha on its obligations, this information has not been made available to the 
       Company to enable a complete assessment of the financial position of the Encha Group. 
       Information available to enable an assessment of the recoverability of the R115.8 million 
       owed to the Company at 31 August 2016 was therefore limited to information available in 
       the public domain on Encha's asset base. This information, however, does not provide 
       visibility of Encha's liabilities to enable a complete assessment of the net asset position 
       as at 31 August 2016. A provision for impairment of R115.8 million has therefore been 
       raised.

    5  The movement in the loan due from EERNL is attributable to foreign exchange losses totalling 
       16.1 million (29 February 2016: foreign exchange gain of R48.2 million).

9   FINANCIAL INSTRUMENTS                                                             
    The fair values of cash and cash equivalents and trade and other payables approximate carrying 
    values due to the short-term maturities of these instruments. Other financial assets are 
    evaluated by the Group at measurement date based on inputs such as interest and exchange 
    rates, country-specific factors and creditworthiness of debtors.
    
    Valuation techniques and assumptions applied to measure fair values:
                                       Carrying value    Carrying value        Fair value        Fair value        
    Financial instrument               31 August 2016  29 February 2016    31 August 2016  29 February 2016  Valuation technique          Significant inputs
    Other financial assets (footnote 1)   474 314 217       636 944 048       368 867 773       540 851 344  Discounted cash flow model   Weighted average cost of capital
                                                                      
    1  In terms of SacOil's accounting policies and IAS 39 - 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 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.

    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 
                                                  R               R               R               R
    Other financial assets                                        
    At 31 August 2016                             -               -     368 867 773     405 275 658 
    At 29 February 2016                           -               -     540 851 344     540 851 344 
                                                  
    There were no transfers between levels during the period. The Group's own non-performance 
    risk at 31 August 2016 was assessed to be insignificant.

                                                                          31 August       31 August
                                                                               2016            2015
                                                                                  R               R 
10  COMMITMENTS AND LIABILITIES                    
    Commitments                    
    Exploration and evaluation assets 
      - work programme commitments - due within 12 months                 1 665 000      54 510 935 
    Exploration and evaluation assets 
      - work programme commitments - due within 13 to 48 months          44 698 778      25 649 134 
                                                                         46 363 778      80 160 069 
                              
    Exploration and evaluation activities will be funded from current cash resources and funds from 
      future capital-raising initiatives.                    
                              
                                                                          31 August     29 February
                                                                               2016            2016
                                                                                  R               R 
    Contingent liabilities                    
    Cost carry arrangement with TOTAL                                   117 115 084      95 772 505 
                                                                        117 115 084      95 772 505 
                              
    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. Semliki's rights attributable to SacOil were subsequently 
    assigned to SacOil DRC as part of the reorganisation concluded on 29 February 2016. TOTAL will 
    be entitled to recover these costs, being SacOil DRC'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 31 August 2016 TOTAL 
    has incurred R117.1 million (29 February 2016: R95.8 million) of costs on behalf of SacOil DRC. 
    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.

                                                                          31 August       31 August
                                                                               2016            2015
                                                                                  R               R 
11  RELATED PARTIES                    
    Key management compensation                    
    Non-executive directors:                    
    Fees                                                                  2 011 593       1 550 000 
    Executive directors:                    
    Salaries                                                              4 812 572       4 590 226 
    Other key management:                    
    Salaries                                                              4 213 967       4 566 289 
    Total key management compensation                                    11 038 132      10 706 515 
                              
12  LITIGATION                    
    The Group is, from time to time, involved in various claims and legal proceedings arising 
    in the ordinary course of business. The Board believes, based on its judgement and advice 
    obtained from legal counsel, that the Group has valid claims for the matters under arbitration 
    or litigation. A change in one or more of these judgements, although not anticipated, would 
    significantly affect the Group's results. Provision is made for all liabilities which are 
    expected to materialise and contingent liabilities are disclosed when the outflows are possible.
                              
13  DIVIDENDS                    
    The Board has resolved not to declare dividends to shareholders for the period under review.


14  GOING CONCERN                    
    The Company incurred a net loss for the period ended 31 August 2016 of R221.4 million 
    (2015 net profit: R2.8 million). The results of the Group continue to be affected by 
    developments in the global markets with respect to oil prices and exchange rates as well as 
    lower-than-expected performance of the Lagia asset for the reasons highlighted in the 
    operations and finance reviews. Consequently, the Group's operations have not delivered 
    expected cash flows which has resulted in a net cash outflow of R54.9 million for the period 
    ending 31 August 2016 (31 August 2015: R40.1 million) from operations, business development 
    activities and overhead costs. The Group's cash and cash equivalents at 31 August 2016 total 
    R52.4 million which management have forecasted to adequately cover the activities of the Group 
    until January 2018 representing a 15-month period from the date of these condensed 
    consolidated interim results. The adequacy of the available cash for the time period noted 
    above is dependent on the group achieving forecasted production volumes at Lagia, holding 
    costs in line with forecasts, and stability in factors such as oil price and exchange rates at 
    forecasted values. 

    Availability of funding for the Group's activities beyond January 2018 
    A deficit of R64.0 million exists in the Group's cash flow forecast to February 2019 
    ("the Forecast"). Unfavourable developments in the global oil and currency markets have 
    contributed to this deficit together with the modifications made to the Lagia production 
    profile given the challenges highlighted in the operations review. The Forecast does not 
    take into account the upside that could arise from the recovery of funds owed to the Group 
    as disclosed in note 8. 

    The BoD is constantly considering various strategies to grow the Group to ensure it generates 
    cash flows to sustain operations. Whilst mitigating actions are in place, these are in the 
    initial stages such that the value to be added to the Group cannot as yet be demonstrated as 
    a basis to support the going concern assertion at 31 August 2016.

    The impact of developments in the global oil and foreign exchange markets on the performance 
    of the Group 
    The crude extraction industry is one that requires a long-term investment mindset as well as 
    reliance on uncontrollable macroeconomic performance indicators such as the oil price and 
    the US$ exchange rate. Should production at Lagia increase significantly as planned, 
    the effect of these variables will be more significant on the financial performance of the 
    Group as a whole. Further, the Group is still in the exploration phase for certain of the 
    rights that it holds. Should these explorations prove successful, there is significant upside 
    available in the forecasted financial position and performance. 

    These conditions give rise to a material uncertainty which may cast doubt about the Group's 
    ability to continue as a going concern and therefore that it may be unable to realise its 
    assets and discharge its liabilities in the normal course of business. 

    The Board remains reasonably confident that it will manage the material uncertainties that 
    exist, accordingly the financial statements have been prepared on the basis of accounting 
    policies applicable to a going concern. This basis presumes that funds will be available to 
    finance future operations and that the realisation of assets and settlement of liabilities 
    will occur in the ordinary course of business.                    
                              
15  EVENTS AFTER THE REPORTING PERIOD                    
    On 11 October 2016 SacOil entered into a settlement agreement with Nigdel United Oil Company 
    Limited whereupon both parties withdrew their respective litigation and arbitration claims. 
    Details pertaining to these claims were provided in the 2016 Integrated Annual Report.
    
    On 17 October 2016 the Public Investment Corporation (SOC) Limited ("PIC"), acting on behalf 
    of the Government Employees Pension Fund ("GEPF") acquired the total interests in the 
    securities of the Company held by Westglamry Limited and Newdel Holdings Limited, such that 
    the resulting total interest in the securities of the Company held by the PIC on behalf of 
    the GEPF amounts to 68.65% of the total issued share capital of the Company. Previously the 
    PIC held 42.14% of the issued share capital of the Company.                    
                              
On behalf of the Board


Tito Mboweni          Dr Thabo Kgogo                   Damain Matroos
Chairman              Chief Executive Officer          Chief Financial Officer

Johannesburg
30 November 2016                              


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), Damain Matroos (Chief Financial Officer), 
Tito Mboweni (Chairman)*, Mzuvukile Maqetuka*, Vusi Pikoli*, Ignatius Sehoole*, 
Titilola Akinleye**
* Independent non-executive directors  ** Non-executive director 

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 Fullbright South Africa 
Auditors                                Ernst & Young Inc.
JSE Sponsor                             PSG Capital Proprietary Limited
Investor Relations (UK)                 Buchanan Communications Limited
AIM Nominated Adviser                   finnCap Limited



Date: 30/11/2016 04:00:00 Supplied by www.sharenet.co.za                     
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