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Update on the Termination Process Related to Oil Prospecting Licence 281
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”)
UPDATE ON THE TERMINATION PROCESS RELATED TO OIL PROSPECTING
LICENCE 281
As previously announced to shareholders on 1 April 2015,
SacOil terminated its participation with Transnational
Corporation of Nigeria Plc (“Transcorp”), the operator of Oil
Prospecting Licence 281 (“OPL281”).
In a letter dated 10 December 2014 to SacOil, Transcorp
acknowledged SacOil's termination of the Farm-out and
Participation Agreement ("FoPA") and confirmed the effective
date of such termination as 3 December 2014. Transcorp
further acknowledged its liability in writing to SacOil and
agreed to refund the farm-in fees and interest thereon in line
with the provisions of the FoPA, requesting SacOil to provide
Transcorp with written details of the bank account into which
payment would be made. The only contention from Transcorp at
that time was the interest rate applicable to the refund
although such interest rate was clearly stipulated in the
FoPA.
SacOil paid $12.5 million towards farm-in fees on 28 February
2011, which fees contractually are to be refunded with
interest by Transcorp. Notwithstanding the receipt of
Transcorp's written acknowledgment of its repayment obligation
in December 2014, as well as its public announcement in April
2015 acknowledging SacOil’s exit from OPL281, SacOil
subsequently received notice on 18 June 2015 from Transcorp
that it’s termination of the FoPA was wrongful and amounted to
a repudiation of the FoPA. Transcorp has initiated court
proceedings in this respect and is also claiming damages from
SacOil. SacOil is opposing these proceedings and has engaged
counsel to recover all monies due and payable pursuant to the
FoPA.
In the interim and pursuant to the FoPA, SacOil filed a notice
for arbitration on 28 August 2015 with the Nigerian Chartered
Institute of Arbitrators, Nigeria Branch, to recover its farm-
in and related fees plus contractual interest thereon.
The SacOil board and management remain committed to recovering
from Transcorp all amounts owed and to institute the requisite
legal actions accordingly.
JSE Sponsor
PSG Capital Proprietary Limited
12 November 2015
For further information please contact:
SacOil Holdings Limited +27 (0)11 463 6884
Bradley Cerff
finnCap Limited (Nominated Adviser and +44 (0) 20 7220 0500
broker)
Christopher Raggett and James Thompson
FirstEnergy Capital (Joint broker) +44 (0) 20 7448 0200
Hugh Sanderson / David van Erp
About SacOil
SacOil is a South African based independent African oil and
gas company, dual-listed on the JSE and AIM, with business
operations in Egypt, the Democratic Republic of Congo (“DRC”),
the Republic of Malawi and the Republic of Botswana. SacOil
also operated in Nigeria until 19 May 2015. The Company has
partnered with the Public Investment Corporation SOC Limited
and the Instituto de Gestão das Participações do Estado on a
project that entails the construction of a gas pipeline from
Mozambique to South Africa and the distribution and marketing
of gas in southern Africa. The Company continues to evaluate
opportunities to secure high impact acreage in other
established and prolific hydrocarbon basins in Africa.
Date: 12/11/2015 09:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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