SacOil Update on Operations
SACOIL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1993/000460/06)
JSE share code: SCL / AIM share code: SAC
(“SacOil” or “the Company”)
SacOil Update on Operations
SacOil, the African independent upstream oil and gas Company, is pleased to provide the market with the following update on the Company’s on-going operational activities.
- Disposal of the Greenhills Plant: Reached agreement for disposal of non-core plant to management and employees;
- Nigeria, OPL 233: Seismic acquisition on part of the block; and
- DRC, Block III: Final interpretation of airborne gravity and magnetic survey.
Disposal of the Greenhills Manganese Processing Plant
SacOil has agreed to sell its Greenhills Manganese Processing Plant in South Africa (the “Plant”), a non-core asset, to a company representing the management and employees of the Plant (the “Purchaser”) for a consideration of R7.0m. The management team is led by Koenraad Josephine Joseph De Rooster.
The sale of the Plant is on an ‘as is’ and vendor financed basis, with the liabilities for employees, rehabilitation and environment aspects passing on to the Purchaser. The performance of the Plant has deteriorated over the last few years as the requirement for further capital expenditure has become apparent. The Plant is currently loss making but reported a R1.67m profit before tax for the twelve months to 28 February 2012.
The sale of the Plant will reduce the current monthly negative cash flow costs to SacOil of some R0.2m; ensure the continued employment of the personnel while providing empowerment for black employees; enable SacOil management to focus on the core oil and gas business; and reduce future potential liabilities.
The Purchaser has the obligation to provide working capital (an upfront minimum of R2.0m) and capital expenditure for the recapitalisation of the Plant in order to sustain it.
With the vendor financing, the Purchaser will pay SacOil R1.0m on the 1st anniversary of closing date, and R2.0m for each subsequent anniversary of closing date until the nominal amount of R7.0m is paid. The effective date for the transaction is 17 September 2012.
Nigeria: OPL 233
The OPL 233 joint venture has gained access to a portion of a 3D Ocean Bottom Cable (OBC) seismic survey acquired by Chevron. The survey extends into OPL 233 from the Chevron operated OML 86 producing license. A preliminary study completed by Atlantic Subsurface Energy Consultants, a NAPIMS approved consulting firm, has identified the Olobia West prospect which appears to add additional prospectivity to OPL 233. SacOil is in the process of reviewing the data in more detail and on completion hopes to be in a position to identify a number of additional leads and prospects for subsequent further investigation and drilling. The Company also plans to undertake a resource update following the analysis of data collected from the Chevron OBC survey.
This seismic data is in addition to the 100km² OBC 3D seismic which SacOil intends to acquire on the licence along with its partner Energy Equity Resources (“EER”) as part of its farm in obligation for a 20% interest in OPL 233.
Democratic Republic of Congo: Block III, Albertine Graben
As previously announced, Total E&P RDC (“Total”) successfully conducted an airborne gravity and magnetic survey on the northern part of Block III outside the Virunga National Park. The final interpretation of the survey and report by Total has now been received.
The preliminary processing of the survey broadly confirmed the geological trend observed in the adjacent concessions in Uganda. More detailed processing, however, identified features similar to those found to be oil-bearing in Uganda. The gravity map was merged with a basement map available from Ugandan seismic data. This resultant gravity map exhibits a sharp basement escarp at the limit of the basin, as well as some prospective areas consisting of upthrown horst and graben structures.
The operator, Total, has confirmed the existence of a north-west to south-east trending basin, whilst the horst and graben structure as well as quality and thickness of the sedimentary infill will need confirmation from seismic data. The orientation of this basin is on trend with the discoveries made in the Albertine Graben by Tullow Oil.
With this newly acquired information, planning for the acquisition of a 2D seismic survey to map potential oil and gas prospects is underway, with an estimated 400 km plus 120 km optional of 2D data to be acquired during the next dry season. Total has initiated the tendering process for this survey. Subject to the positive identification of subsurface geological structures that may contain oil and gas, the partners intend to drill an exploration well, in order to further determine the potential commercial viability of Block III.
Qualified Person Review
This release has been reviewed by Bradley Cerff, Vice President Operations, who is a member of the Society of Petroleum Engineers with 16 years’ experience in petroleum exploration and management. Bradley Cerff has consented to the inclusion of the technical information in this release in the form and context in which it appears.
For further information please contact:
finnCap Limited (Nominated Adviser and Broker)
Matthew Robinson / Christopher Raggett
+44 (0) 20 7448 0200
First Energy Capital (Joint Broker UK)
Majid Shafiq / Travis Inlow
+44 (0) 20 7220 0500
GMP Securities Europe LLP (Joint Broker UK)
James Pope / Chris Beltgens
+44 (0) 20 7647 2800
Keyter Rech Investor Solutions (SA)
Vanessa Ingram / Lynne Bothma
+27 (0) 11 447 2993
The Riverbed Agency (SA)
+27 (0) 11 783 7903
Pelham Bell Pottinger (UK)
+44 (0) 20 7861 3919
+44 (0) 20 7861 3936
+44 (0) 20 7861 3918
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