Strategic Review of Lagia Asset
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”)
Strategic Review of Lagia Asset
The Board of Directors (“Board”) of Efora has concluded a strategic review with regards to its 100% owned and operated Lagia oil field in Egypt (“Lagia”). The result of the review determined that it would be in the best interest of the Company to seek to attract a strategic partner to accelerate the development programme at Lagia.
Lagia is located onshore Egypt, on the Gulf of Suez coast of the Sinai Peninsula. It contains heavy oil (10 – 12 degrees API) in the Nukhul formation which is currently in the initial stages of a development programme, with production currently around 60 barrels of oil per day. The Company believes there is significant development upside with the continuation of the development programme. Field reserves, as independently assessed by Boury Global Energy Consultants, a qualified reserve evaluator, as at 1 March 2018, are 5.6 MMbbl proved plus probable. In addition to the heavy oil production and development upside, there have been light oil shows in the deeper section which the Company believes holds significant potential for appraisal and further exploration. Shareholders are referred to the presentation titled “Investment Opportunity: Lagia Oil Field” which is available on the Company’s website at www.eforaenergy.com, which contains more detailed information about Lagia.
Boury Global Energy Consultants have approved the field reserve estimates, in writing in advance of this announcement.
The Company has duly appointed consultants to initiate a process to attract a strategic partner for the continued development of Lagia, and the appraisal and potential development of light oil shows within the Lagia development lease. Consideration will also be given to a sale of Lagia or other strategic alternatives that would result in the creation of additional value for shareholders.
The Company is currently compiling information for a data room, which will be available for review by interested parties upon execution of a confidentiality agreement in connection with the process. Efora has not yet set a definitive schedule to complete the process or its identification, examination and consideration of proposals. Given the nature of the process and the need for confidentiality, the Company does not intend to provide updates until such time as the Board approves a definitive transaction, or otherwise determines that further disclosure is necessary or appropriate. The Company cautions that there are no guarantees that the process will result in a transaction, or, if a transaction is undertaken, as to its terms, timing or conditions or approvals required to implement such transaction.
Commenting on the update, Efora’s CEO Dr Kgogo said:
“Following a strategic review of the Company and its portfolio, we have determined that it is an appropriate time to consider reducing our interest in Lagia, and hopefully find a strategic partner that can share in the risk and reward offered by the project. Certainly, Lagia offers unrealised potential, especially now the wider industry has emerged from the severe downturn that has impacted commercial and operational activities on the asset for the majority of Efora’s tenure as operator.
These considerations are at an early stage and we are open to all sensible offers and suggestions from potential industry partners. Efora’s portfolio continues to evolve with an increasingly strong emphasis on Downstream activities, and so a farm-down or sale of our interest in Lagia is consistent with our strategic objectives.”
Corporate Advisor and Sponsor
27 September 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 in the Democratic Republic of Congo; a midstream project relating to crude trading in Nigeria and material downstream distribution operations throughout South Africa and Zimbabwe. 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.
IMPORTANT NOTICE TO SHAREHOLDERS REGARDING THEIR SHARES
If you are in any doubt as to what action you should take, consult your CSDP, Broker, Banker, Legal Adviser, Accountant or other professional advisers immediately.
Or visit our Shareholder Information page for more information regarding your shareholding and share certificate.