EFORA ENERGY LIMITED
(Formerly SacOil Holdings Limited)
Incorporated in the Republic of South Africa)
Registration number 1993/000460/06)
JSE Share Code: EEL
(“Efora” or “the Company”)
Efora Energy Limited, the South African based independent oil and gas company, provides the following corporate update.
Further to the announcement issued on Thursday 15 February regarding the resignation of EY as Efora’s external auditor, the Board wishes to highlight the following points. The Company is in advanced talks with regards to the appointment of a credible auditor who has conducted significant due diligence on the Company and its financial affairs. In response to EY’s stated reasons for resignation, the management emphasise that the history of Going Concern has been well flagged in Efora’s financial reporting and the situation remains the same as last disclosed to shareholders in the Interim Results dated 30 November 2017, insofar as the Company needs to undertake a rights issue by May 2018. The Board remains confident that the Company will obtain the required support from its key shareholders to enable that process, at which point the Company will be on a firm financial footing.
With regards to the reportable irregularities at Afric Oil cited by EY, these activities occurred prior to Efora’s acquisition of a non-operated interest in Afric Oil and only came to light following completion of that acquisition. Since that time, in its capacity as majority shareholder of Afric Oil, Efora has implemented a number of initiatives to ensure the irregularities ceased, is satisfied that the situation has been appropriately addressed, and that strict accounting measures are now in place at Afric Oil to prevent such irregularities occurring in the future. Initiatives implemented by Efora include the Group’s internal auditor including Afric Oil in its internal review process and, as part of the previously mentioned integration process, additional external financial resources were appointed to focus on the internal control and reporting environment at Afric Oil and the introduction of appropriate processes and systems to maintain effective financial management going forward. Other measures introduced by Efora included the appointment of a new and credible executive management team at Afric Oil who, as reported in the operational update issued in mid-January 2018, are making considerable progress in improving the financial, operational and corporate performance of that business.
As referenced in Efora’s SENS announcement released on 15 February 2018, EY was Afric Oil’s appointed external auditor, and the firm duly advised the Audit Committee of Afric Oil in October 2017 that all reportable irregularities were resolved.
Commenting on the update, CEO Dr Thabo Kgogo, said:
“Efora’s management team has always made governance and financial discipline its primary focus. For the avoidance of doubt with regards to EY’s decision to resign as our external auditor, there is absolutely no indication of any wrong doing by the Board of Efora. The claims of irregularities relate to our non-operated subsidiary and occurred prior to the acquisition of our majority interest in the company. Furthermore, we have overseen the necessary changes to amend these irregularities, as verified by EY themselves in October 2017 when they advised Afric Oil’s Audit Committee the issues had been duly resolved. We fully acknowledge why shareholders would have concerns over the going concern issues, however we have disclosed these transparently in our financial reporting and are confident that these will be fully resolved in the coming months as we undertake a successful rights issue. We are in progressive discussions with our key shareholders on this matter, and we look forward to updating our shareholders in due course.”
PSG Capital Proprietary Limited
16 February 2018
For further information please contact:
Efora Energy Limited
+27 (0)10 591 2260
Buchanan (Financial PR adviser)
Ben Romney / Chris Judd
+44 (0)20 7466 5000
Efora Energy Limited is a South African based independent African oil and gas company, listed on the JSE. The Company has a diverse portfolio of assets spanning production in Egypt; exploration and appraisal in the Democratic Republic of Congo; midstream project relating to crude trading in Nigeria and material downstream distribution operations throughout Southern Africa. 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.
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