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SacOil Holdings: Time to Deliver

SacOil Holdings: Time to Deliver

THE appointment this week of Thabo Kgogo as the CEO of oil and gas explorer SacOil Holdings completes a flurry of appointments at board level of governance experts and politically connected heavyweights who now have the responsibility of delivering on the numerous promises the company has been trading on since 2007.

Since Robin Vela’s departure as CEO in May last year, SacOil has taken on former SA Reserve Bank governor Tito Mboweni as chairman, and Ignatius Sehoole, Jeff Maqetuka and Vusi Pikoli as directors.They’re all well-respected in their various areas of expertise, and are all well-connected – both in the business and the political spectrum. Kgogo brings with him a wealth of experience in the oil and gas industry, ranging from exploration, appraisal and development projects to upstream activities. The petroleum engineer was a senior executive at PetroSA, and had the responsibility of developing the company’s offshore production wells and platforms and its gas-to-liquid refinery.

Kgogo’s task is now to implement the company’s many exploration projects, mainly in Nigeria, Malawi, Mozambique and the Democratic Republic of Congo. SacOil has been rather long on promises, with little of that translating into any revenue. It does not yet generate any revenue from its oil projects, despite promises to do so since 2007. The R46m revenue for the six months to August came from interest received on cash it holds in the various geographies of its intended operations. Kgogo has his work cut out for him. Since January the company has cleaned up and strengthened its balance sheet by issuing new stock in a R570m rights issue and settled its crippling debt to Gairloch . The corporate actions resulted in the Public Investment Corp becoming the biggest investor with a 44,7% stake and Gairloch with 28,6% of the equity.

Investors have taken note of all this corporate action, and have expressed their confidence. The stock shot up to a high of 80c/share, nearly four times its 24c low in December. The imminent publication of financial results for the year ended February will determine whether the stock is worth the current 58c/share rating it commands on the JSE and London’s Alternative Investment Market.

Source: Financial Mail

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