SacOil’s Nigeria blocks to generate revenue ‘in 18 months’

SACOIL Holdings, a pan-African oil exploration company, will start generating revenue in 18 months as it starts drilling at its exploration blocks in Nigeria next year, CEO Roger Rees said on Friday.

The company recently received regulatory approval to start drilling wells in the area. Production of oil will start on the OPL 233 block in Nigeria in the last quarter of 2015.

The block, in which SacOil owns a 20% stake, is operated by Nigerian company Tidalflow.

It is estimated to carry 20-million barrels of resources, SacOil operations vice-president Bradley Cerff told Business Day earlier this month.

Oil finds have been confirmed in neighbouring blocks by other operators.

The company has exploration licences in Nigeria, the Democratic Republic of Congo, Malawi and Botswana and is listed on the JSE and on London’s Alternative Investment Market. SacOil has deposited about R100m with Ecobank as a performance bond collateral on the block. The cash will pay its contractors for the drilling of the wells and for other work on the assets.

Mr Rees said work was progressing on another SacOil block in Nigeria, OPL 281, which is estimated to contain 100-million barrels of resources, according to seismic and well data.

This week, shareholders will vote on a R570m rights issue that will wipe out R238.5m of debt by converting it to equity and recapitalise the company.