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Equity Distribution Agreement, Pro forma Financial and Further Cautionary Announcement

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”)

Equity Distribution Agreement, Pro forma Financial

and

Further Cautionary Announcement

1. Introduction

Shareholders of SacOil (“Shareholders”) are referred to the announcement released on the Securities Exchange News Service (“SENS”) of the JSE Limited (“JSE”) and on the Regulatory News Service of the London Stock Exchange on Friday, 2 September 2011 regarding the specific issue of ordinary shares to Timtex Investments (Proprietary) Limited (“Timtex”), an associate of Encha Group Limited (“Encha”) (“the Specific Issue”), the promoter`s fee of R1 500 000 payable to Encha (“the Promotor’s Fee”) and the cautionary announcement (collectively “the Announcement”)).

2. USD25m Standby Equity Distribution Agreement

On Wednesday, 12 October 2011 SacOil entered into a Standby Equity Distribution Agreement (“SEDA”) of USD25m (“Commitment Amount”) with Yorkville Advisers UK LLP (“YA”), an exempt limited partnership registered in the Cayman Islands.

The SEDA is available, unless otherwise terminated earlier in accordance with its terms, for a period of three years and the number and timing of each advance draw down (“Advance”) is at the discretion of the Company provided that the Company shall not be entitled to draw down more than one advance every five trading days, unless otherwise approved by YA.

Limitations on the number of Advances as well as the quantum of the Advances, ensures a spread of the drawdown amounts over a three year period. In spreading the drawdowns over three years, the dilution of existing Shareholders is also spread to avoid sudden dilution of existing Shareholders’ interests in the Company.

Each Advance by the Company will be settled by the issue of new Ordinary Shares (“Ordinary Shares”). Any Ordinary Shares to be issued in relation to an Advance shall be listed on the JSE and admitted to trading on AIM. The number of Ordinary Shares to be issued in relation to an Advance shall be equal to the Advance amount divided by the purchase price, where the purchase price shall be 94% of the lowest of the daily volume weighted average prices (“VWAP”) of the Ordinary Shares of the Company during the period of 5 consecutive trading days beginning on the first trading day after the date of the Advance notice.

The SEDA improves SacOil’s ability to fund its current and future operational obligations.

Any issue of shares in terms of the SEDA constitutes a specific issue of shares for cash in terms of JSE Listings Requirements, and accordingly requires approval by Shareholders.

3. Pro Forma financial effects

Shareholders are advised that updated unaudited pro forma financial effects relating to the Specific Issue and the Promoters Fee as published in the Announcement, has been set out below. The table below furthermore includes the unaudited pro forma financial effects of SEDA.

The pro forma financial effects have been prepared using accounting policies that comply with International Financial Reporting Standards and that are consistent with those applied in the audited, published financial statements of SacOil for the year ended 28 February 2011.

It has been assumed for purposes of the pro forma financial effects that the proposed transactions took place with effect from 1 March 2010 for statement of comprehensive income purposes and at 28 February 2011 for statement of financial position purposes.

The unaudited pro forma financial effects set out below are the responsibility of the directors of the Company and have been prepared for illustrative purposes only and because of their nature may not fairly present the financial position, changes in equity, and results of operations or cash flows of SacOil after the transactions.

Before

1

After the Specific Issue and Promoters Fee

2

Percentage change (%)

3

After the Specific issue, Promoter’s Fee and SEDA

4

Percentage change (%)

5

Loss per share (cents)

(6.67)

(5.30)

20.59

(3.33)

37.17

Diluted loss per share (cents)

(6.21)

(5.00)

19.48

(3.21)

35.82

Headline loss per share (cents)

(6.62)

(5.30)

19.93

(3.30)

37.69

Diluted headline loss per share (cents)

(6.16)

(5.00)

18.85

(3.18)

36.34

Net asset value per share (cents)

69.57

69.08

(0.71)

65.39

(5.34)

Net tangible asset value per share (cents)

11.03

18.87

71.10

30.00

60.74

Weighted average number of shares in issue (000’s)

449 629

561 569

24.90

901 198

60.48

Weighted average number of shares in issue for dilution (000’s)

482 933

594 873

23.18

943 503

57.09

Number of shres issued (000’s)

674 090

786 031

16.61

1 125 660

43.21

Notes:

The pro forma financial effects of the SEDA have been calculated based on the following assumptions:

  • YA advanced a maximum commitment amount of USD25m to SacOil and elected to subscribe for up to the South African Rand equivalent in Ordinary Shares on 28 February 2011; and
  • The Rand amount in respect of the Commitment Amount was calculated for illustrative purposes using the exchange rate of R7.93 to USD1.00 on 11 October 2011, being the last practicable date and using an estimated number of shares of 339 629 332 which has been calculated based on the conversion price of 58 cents per Ordinary Share, being a 6.0% discount to the 5 day VWAP of Ordinary Shares to 11 October 2011.

1. The “Before” column has been extracted without adjustment from the audited, published results of SacOil for the year ended 28 February 2011. The “Before” net asset value and net tangible asset value per SacOil Ordinary Share have been calculated from the financial information presented in the audited, published results of SacOil for the year ended 28 February 2011.

2. The “After the Specific Issue and the Promoters Fee” is based on:

a. Issue of 111, 940, 298 new Ordinary Shares at R0.67 per Ordinary Share, being the closing price of SacOil Ordinary Shares on 29 August 2011;

b. Payment of the Promoters Fee of R1, 500, 000 (Including VAT) to Encha. As this cost was incurred in the course of issuing ordinary shares in SacOil it has been debited directly to equity in terms of IAS 32: Financial Instruments;

c. Payment of estimated transaction costs amounting to R279, 000 in respect of the specific issue to Timtex. As these costs were incurred in the course of issuing ordinary shares in SacOil they have been debited directly to equity in terms of IAS 32: Financial Instruments; and

d. No income benefit has been attributed to the cash received in respect of the specific issue of shares as the proceeds with be used to fund working capital.

3. Measured as the “After the Specific Issue and the Promoter’s Fee” column as a percentage of the “Before” column.

4. The “After the Specific Issue, the Promoters Fee and the SEDA” is based on:

a. the adjustments detailed in note 2 above;

b. The conversion of the maximum commitment amount of USD 25, 000, 000 on 28 February 2011 into 339 629 332 ordinary shares at a 6,0 % discount to the 5-day volume weighted average price (Rounded up to the nearest half cent) to 11 October 2011;

c. Payment of implementation fee of R3 962 642, due diligence fee R123 710 and legal expenses of R185 566, in respect of the SEDA. As these costs were incurred in the course of issuing ordinary shares in SacOil they have been debited directly to equity in terms of IAS 32: Financial Instruments;

d. Payment of estimated transaction costs amounting to R736 000 in respect of the specific issue to YA. As these costs were incurred in the course of issuing ordinary shares in SacOil they have been debited directly to equity in terms of IAS 32: Financial Instruments; and

e. No income benefit has been attributed to the cash received in respect of the specific issue of shares as the proceeds with be used to fund working capital.

5. Measured as the “After the Specific Issue, the Promoters Fee and the SEDA” column as a percentage of the “After the Specific Issue and the Promoters Fee” column

4. Circular to Shareholders 4

In the Announcement, Shareholders were advised that a circular, setting out the full terms of the Specific Issue, the Promotor’s Fee and incorporating a notice convening a general meeting of Shareholders of ordinary shares would be posted on or about 30 September 2011.

Shareholders are herewith advised that a Circular is currently in the process of being approved by the JSE, setting out full details of the Specific Issue, the Promoters Fee and SEDA, and which will be posted to Shareholders before the end of October 2011.

The salient dates and times of the general meeting will be announced in due course.

5. Further cautionary announcement 5

Shareholders are advised that the Company continues to consider various proposals and potential transactions, which if successfully concluded, may have a material effect on the price of SacOil`s securities. Accordingly, Shareholders are advised to continue to exercise caution when dealing in the Company`s securities until a further announcement in this regard is made.

13 October 2011

JSE Sponsor

The Standard Bank of South Africa Limited

For further information please contact:

AIM Nominated Adviser and Joint Broker

finnCap Limited

Matthew Robinson / Christopher Raggett

+44 (0)20 7220 0500

Joint Broker

Shore Capital Stockbrokers Limited

Jerry Keen/Bidhi Bhoma

+44 (0) 20 7408 4090

Public Relations (South Africa)

The Riverbed Agency

Raphala Mogase/Bongiwe Moeli

+27 (0) 11 783 7903

Public Relations (United Kingdom)

Pelham Bell Pottinger (UK)

Philip Dennis

Nick Lambert

Rollo Critchton-Stuart

+44 (0)20 7861 3919

+44 (0)20 7861 3936

+44 (0)20 7861 3918

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