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Unreviewed condensed consolidated interim results for the six months ended 31 August 2017

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Efora Energy Limited

(Formerly SacOil Holdings Limited)

(Incorporated in the Republic of South Africa)

(Registration number 1993/000460/06)

JSE share code: EEL

ISIN: ZAE000248258

(“Efora” or “the Company” or “the Group”)

Unreviewed condensed consolidated interim results for the six months ended 31 August 2017


  • Acquisition and integration of the AfricOil Proprietary Limited (“AfricOil”) business
  • One cargo lifted under the crude trading contract in Nigeria
  • Changes to Board composition to support the growth strategy of the Group
  • Delisted from London Stock Exchange’s AIM Market as part of cost control measures
  • Rationalisation of portfolio with relinquishment of Malawi and Botswana assets


  • Rebranding and renaming the Company to Efora Energy Limited (“Efora”)
  • Consolidation of Company shares
  • Successfully spudded pilot well Lagia #14 on the Lagia Oil Field
  • Expansion of downstream operations through the yet-to-be-completed acquisition of Belton Park Trading

Dr Thabo Kgogo, Chief Executive Officer at Efora commented: “I am pleased to report that during the first half of the 2017/2018 financial year (“H1 FY2018”) the Group continued to make significant strides towards becoming an integrated oil and gas play, as well as progressing other strategic targets. The transformation into Efora commenced in 2014 following the revision of the Group’s strategy, with the aim of transitioning the Group’s focus from a pure exploration company to an integrated business with operations in key segments of the oil and gas value chain. The new business model was introduced to reposition Efora as a cash-generative Group with a focus on profitability and growth.

Whilst we made significant progress in executing our strategy over the past years, the Group’s performance continued to be impacted by the developments in the global oil and currency markets. The oil price has been suffering from an oversupply in crude, driven by the US shale producers and OPEC’s inability to reign in supply. Market expectations are that oil prices will trade within the $60/bbl range, which would provide support for investment in the industry. The Rand/US Dollar exchange rate will likely continue to be volatile and expectations are that there are certain material political triggers that could have a significant impact on the exchange rates. The weakening of the Rand had a positive impact on our results during the period as a significant part of our assets are US Dollar denominated. Within the downstream sector, South Africa still presents great opportunities given its consumption of approximately 21 billion litres of diesel and petrol per annum and it is for this reason that the Board has proactively sought to diversify the business by establishing a meaningful position in this market by way of acquisitions.

During H1 FY2018 we successfully completed the acquisition of AfricOil, a downstream fuel wholesale distribution business, which expanded our geographical reach in line with our pan-African vision and diversified our operations across the value chain. Since completing the acquisition our focus has been on ensuring that the AfricOil business is better positioned to effectively compete in the wholesale market. The integration plan has progressed well with the main focuses being to ensure competitive product supply options, strengthening the corporate structure and ensuring that the cost base is suitable for a business of this nature. As anticipated at the time of acquisition, these changes have resulted in certain once-off costs being incurred in the short-term. Pleasingly, these changes have largely now been implemented and we are confident that the business is now positioned to deliver a markedly improved performance in line with our expectations.

Our performance at Lagia has been impacted by the delay in the pilot well that was rescheduled for November 2017. The reservoir characterisation studies undertaken led to the recommendation to drill a pilot well to confirm optimal well completion and steam injection configuration. Preparations for the drilling of this well have gone smoothly and the well spud on 28 November 2017 with the results of the pilot well due to be finalised in Q1 2018. The detailed analysis of the field throughout the year has provided us with an opportunity to gain a far greater understanding of the complex geology and the completion and development strategies required to extract maximum value from the field. A successful outcome from the pilot well represents a positive near-term catalyst for the Group. The recent improvements in oil prices provides support for undertaking the required development of the field to ensure that it generates a positive contribution for the Group. Whilst Lagia has continued to present operational challenges stemming from poor well productivity throughout the period, our efforts to improve cost control at the field have resulted in a reduced gross operating loss of R7.7 million for the period when compared to the prior year (R20.7 million).

The crude trading contract with the Nigerian National Petroleum Company (“NNPC”) has been extended to 31 March 2018. This segment of the business contributed an income of R2.5 million for the period through our joint venture, where the Group is entitled to a 50% share of Sacoil Energy Equity Resources Limited (“SEER”) operating results and net assets.

Our activities at Block III in the Democratic Republic of Congo (“DRC”) is focused on assessing the results of the 2D seismic undertaken and we are working closely with Total on the seismic processing and interpretation in order to identify prospects for drilling. The schedule currently being considered is that an exploration well will be drilled during 2019, assuming the interpretation of the seismic data identifies technically suitable prospects. The exploration licence is due to expire in January 2018 and the parties are currently in the process of engaging the DRC Government to obtain an extension. Based on the investment and activities to date, the parties are confident that the required extension will be forthcoming.

In line with our strategy, we have evaluated our position in Malawi and Botswana and the prospectivity of the respective fields. Those reviews indicated that the prospects of success on these two fields did not meet with our project investment criteria and as such we decided not to renew the exploration licences when they expired during H1 FY2018.

The Group will continue to evaluate various other business development opportunities that can complement our existing asset base and also ensure that the Group would be a sustainable business. The announcement around Belton Park Trading (“Belton Park”) provides further evidence of our strategy to create an integrated energy business.

We remain committed to the resolution of the outstanding litigation matters and the recovery of funds owed to the Group. The Group continues to pursue legal action against Transcorp and the Encha Group to recover amounts owed pursuant to the withdrawal from OPL 281 and under the terms of the written acknowledgement of debt, respectively. In addition, we expect that the Encha and Robin Vela disputes should be resolved around the end of this calendar year.

I am very pleased to report that there were no significant reportable health, safety and environmental (“HSE”) incidents during H1 FY2018. We will continue to drive initiatives across the Group to maintain our HSE performance within the acceptable levels.

Post-period, we commenced two corporate actions to rebrand the Company to Efora Energy Limited and to effect the consolidation of the Company’s shares. The acronym SacOil came from South African Congo Oil Company, a name created in 2008, which now does not reflect the diversification of the Company’s operations into other African territories and across the oil and gas value chain. The Company, through its acquisitions and investments, now has business activities in Egypt, Nigeria, South Africa and Zimbabwe, in addition to the exploration activities in the Democratic Republic of Congo. The new name, Efora Energy, stands for “Energy for Africa”, a concept that underpins Efora’s revised strategy and vision to become a leading pan-African player with diverse operations within the energy sector. Regarding the share consolidation, this has been a strategic priority for the Company and is seen as a mechanism to transition the Company’s share from a penny stock to a more stable share. The ultimate objective of the significant operational and corporate evolution that we have overseen at Efora over the past few years is to position the Company as a credible, institutional investment grade proposition with a diverse portfolio of assets underpinned by consistent cash flows and earnings. We are confident that the Company has made considerable headway in this regard and now look forward to developing a track record for delivering growth and creating sustainable long-term value for our shareholders.

The focus for the remainder of the year remains on improving the performance and operations of AfricOil, improving the Lagia performance in light of the results of the pilot well, securing additional loads on crude trading, cost optimisation across the Group and seeking further projects and acquisitions.

We thank our stakeholders for their continued support over the years as we continue to work towards a sustainable integrated oil and gas business.”


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 and appraisal in the Democratic Republic of Congo; midstream project relating to crude trading in Nigeria and material downstream distribution operations throughout southern Africa. 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.


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