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Regulatory News

Results Announcement

Thu, 31st May 2012 13:00

RNS Number : 5298E
SacOil Holdings Limited
31 May 2012


SacOil Holdings Limited

(Incorporated in the Republic of South Africa)

(Registration number 1993/000460/06)

JSE share code: SCL      AIM share code: SAC

ISIN: ZAE000127460

("SacOil" or "the Company" or "the Group")


Reviewed provisional results for the year ended 29 February 2012


Consolidated Statement of Comprehensive Income

                                                  12 months          12 months

                                             to 29 February     to 28 February

                                                       2012               2011

                                   Notes            ZAR'000            ZAR'000

Revenue                                          37 172 586         35 143 119

Cost of sales                                  (26 569 161)       (23 615 391)

Gross profit/(loss)                    4         10 603 425         11 527 728

Operating costs                                (55 237 484)       (38 684 867)

Loss from operations                           (44 634 059)       (27 157 139)

Share based payment expense            5        (8 891 216)        (4 178 928)

Net loss on derecognition of      

intangible assets                      6       (83 446 480)                  -

Other income                           6        219 138 297                  -

Operating profit/(loss)                          82 166 542       (31 336 067)

Investment income                      7         27 552 335          1 271 134

Finance costs                          8       (44 123 631)           (17 309)

Fair value adjustments                             (20 115)            427 447

Profit/(Loss) before taxation                    65 575 131       (29 654 795)

Current tax                         14.2       (61 485 300)                  -

Deferred tax                        14.1       (93 823 463)           (95 200)

Loss for the year                              (89 733 633)       (29 749 995)

Attributable to:                                                             

Owners of the parent                           (95 506 424)       (29 749 995)

Non-controlling interest                          5 772 791                  -

                                               (89 733 633)       (29 749 995)

Other comprehensive loss:                                           

Gains and losses on property      

revaluation                                       (340 000)          (340 000)

Taxation related to components of 

other comprehensive income                           95 200             95 200

Other comprehensive loss for the  

year net of taxation                              (244 800)          (244 800)

Total comprehensive loss                       (89 978 433)       (29 994 795)

Attributable to:                                                             

Owners of the parent                           (95 751 224)       (29 994 795)

Non-controlling interest                          5 772 791                  -

                                               (89 978 433)       (29 994 795)

Reconciliation of headline earnings                                          

Loss for the year                              (95 506 424)       (29 749 995)

Loss on sale of intangible asset  

attributable to owners of                                                    

the parent net of tax                            65 254 812                  -

Headline loss                                  (30 251 611)       (29 749 995)

Weighted average number of shares 

('000)                                          717 411 053        449 628 622

Diluted weighted average number of

shares ('000)                                   721 553 230        482 933 132

Basic loss per share (cents)           3            (13,35)             (6,62)

Diluted loss per share (cents)                      (13,24)             (6,16)

Headline loss per share (cents)        3             (4,22)             (6,62)

Diluted headline loss per share   

(cents)                                              (4,19)             (6,16)


Consolidated Statement of Financial Position                                 



Non-current assets                                                            

Property, plant and equipment                     6 148 362          6 644 269

Intangible assets                      6        181 995 823        394 641 967

Other financial assets               6,7        331 430 863         45 086 969

                                                519 575 048        446 373 205

Current assets                                                               

Inventories                                       2 540 131          2 408 474

Other financial assets                                    -         11 413 375

Trade and other receivables            9         85 219 043          6 317 846

Cash and cash equivalents                        10 774 298         17 898 834

                                                 98 533 472         38 038 529

Total assets                                    618 108 520        484 411 734

Equity and liabilities                                                       

Equity attributable to equity     

holders of parent                                                            

Share capital                         13        486 184 423        374 029 488

Reserves                                         29 743 531         29 988 331

Accumulated loss                              (182 814 593)       (96 199 385)

                                                333 113 361        307 818 434

Non-controlling interest                        115 731 731        161 760 089

                                                448 845 092        469 578 523


Non-current liabilities                                                      

Long term borrowings                   6         28 939 490                  -

Deferred tax liability              14.2         93 728 263                  -

Provisions                                        1 065 974            945 972

                                                123 733 727            945 972

Current liabilities                                                          

Foreign taxation payable            14.1         20 495 100                  -

Other financial liabilities           12         12 496 195                  -

Finance lease obligation                                  -             90 508

Trade and other payables                         12 538 406         13 796 733

                                                 45 529 701         13 887 241

Total liabilities                               169 263 429         14 833 213

Total equity and liabilities                    618 108 520        484 411 735

Number of shares in issue                       832 225 699        674 090 410

Net asset value per share (cents)                     53,93              69,57

Net tangible asset value per share

(cents)                                               32,06              11,03


Summarised Consolidated Statement 

of Cash Flows                                                                

                                                   Reviewed           Reviewed

                                                      Group              Group

                                                  12 months          12 months

                                             to 29 February     to 28 February

                                                       2012               2011

                                                    ZAR'000            ZAR'000

Net cash from operating activities            (179 768 660)       (19 139 391)

Net cash from investing activities              120 955 599       (57 130 923)

Net cash from financing activities               51 688 525         87 171 285

Total cash movement for the year                (7 124 536)         10 900 970

Cash at the beginning of the year                17 898 834          6 997 863

Total cash at end of the year                    10 774 298         17 898 833


Consolidated Statement of Changes in Equity



                                       Notes     Share capital         reserve

Balance at 1 March 2010                             83 725 538       2 300 547

Changes in equity                                                            

Loss for the year                                            -               -

Other comprehensive income for the year                              (244 800)

Total comprehensive income for the year                      -       (244 800)

Issue of shares                                    290 303 950               -

Share options issued                                         -               -

Non-controlling interests                                    -               -

Total changes                                      290 303 950       (244 800)

Balance at 1 March 2011                            374 029 488       2 055 747

Changes in equity                                                            

Profit/(loss) for the year                                   -               -

Other comprehensive income for the year                      -       (244 800)

Total comprehensive income for the year                      -       (244 800)

Issue of shares                                    112 154 935               -

Share options issued                       5                 -               -

Share options lapsed                       5                 -               -

Dividends                                                    -               -

Total changes                                      112 154 935       (244 800)

Balance at 29 February 2012                        486 184 423       1 810 947


                                Reserves for                                  

                                 own shares/                                 


                                  repurchase           Total       Accumulated

                                     reserve        reserves              loss

Balance at 1 March 2010           23 753 656      26 054 203      (66 449 390)

Changes in equity                                                            

Profit for the year                        -               -      (29 749 995)

Other comprehensive income for 

the year                                           (244 800)                 -

Total comprehensive income for 

the year                                   -       (244 800)      (29 749 995)

Issue of shares                            -               -                 -

Share options issued               4 178 928       4 178 928                 -

Non-controlling interests                  -               -                 -

Total changes                      4 178 928       3 934 128      (29 749 995)

Balance at 1 March 2011           27 932 584      29 988 331      (96 199 385)

Changes in equity                                                            

Profit/(loss) for the year                 -               -      (95 506 424)

Other comprehensive income for 

the year                                   -       (244 800)                 -

Total comprehensive income for 

the year                                   -       (244 800)      (95 506 424)

Issue of shares                            -               -                 -

Share options issued               8 891 216       8 891 216                 -

Share options lapsed             (8 891 216)     (8 891 216)         8 891 216

Dividends                                  -               -                 -

Total changes                              -       (244 800)      (86 615 208)

Balance at 29 February 2012       27 932 584      29 743 531     (182 814 593)


Consolidated Statement of Changes in Equity



                            attributable to                                  

                             equity holders              Non-                 

                              of the Group/       controlling                

                                    Company          interest     Total equity

Balance at 1 March 2010          43 330 351                 -       43 330 351

Changes in equity                                                            

Profit for the year            (29 749 995)                 -     (29 749 995)

Other comprehensive income 

for the year                      (244 800)                          (244 800)

Total comprehensive income 

for the year                   (29 994 795)                 -     (29 994 795)

Issue of shares                 290 303 950                 -      290 303 950

Share options issued              4 178 928                 -        4 178 928

Non-controlling interests                 -       161 760 089      161 760 089

Total changes                   264 488 083       161 760 089      426 248 172

Balance at 1 March 2011         307 818 434       161 760 089      469 578 523

Changes in equity                                                            

Profit/(loss) for the year     (95 506 424)         5 772 791     (89 733 633)

Other comprehensive income 

for the year                      (244 800)                 -        (244 800)

Total comprehensive income 

for the year                   (95 751 224)         5 772 791     (89 978 433)

Issue of shares                 112 154 935                 -      112 154 935

Share options issued              8 891 216                 -        8 891 216

Share options lapsed                      -                 -                -

Dividends                                 -     (51 801 149 )     (51 801 149)

Total changes                    25 294 927      (46 028 358)     (20 733 431)

Balance at 29 February 2012     333 113 361       115 731 731      448 845 092


Notes to the Group Financial Statements for the year ended 29 February 2012


1. Basis of preparation


The annual financial statements of the group for the year ended 29 February 2012 have been prepared in accordance with the group's accounting policies, which comply with International Financial Reporting Standards, IAS 34: Interim Financial Reporting, as well as the AC 500 standards as issued by the Accounting Practices Board or its successor, the Listings Requirements of the JSE Limited and the Companies Act of South Africa and are consistent with those of the previous period except for the adoption of IFRIC 19, amendments to IAS 24 and amendments to various IFRS standards. The adoption of these changes did not have a significant impact on the financial statements as reported.


These financial statements have been prepared on a going concern basis.


All monetary information is presented in the functional currency of the Company being South African Rand.


2. Auditors' review report


The Group annual financial statements have been reviewed by Ernst & Young Inc., the Group's auditors, and are the responsibility of the directors of the Company. They have been prepared under the supervision of the Group's Finance Director, Carina de Beer CA(SA). The unqualified review report includes an "other legal and regulatory requirements" paragraph with respect to a reportable irregularity reported to the Independent Regulatory Board for Auditors in terms of section 45 of the Auditing Profession Act in relation to employees' tax that was not withheld by the Company and paid over to the South African Revenue Services. The error in the employees' tax withheld was due to an administrative oversight. The Company has already taken steps to rectify the oversight. The review report is available for inspection at the Company's registered office.


3. Financial indicators                                      


The Group reported a net asset value of 53.93 cents per ordinary share ("cps") (2011: 69.57), a net tangible asset value of 32.06 cps (2011: 11.03), basic loss of 13.35 cps (2011: 6.62) and a headline loss of 4.22 cps (2011: 6.62).


The decrease in net asset value per share of 15.64 cps is largely attributable to a provision for deferred tax against profit and loss in an amount of R93.8 million (11.26 cps). Refer to note 14.


4. Greenhills                              


The Company's chemical processing plant in Mpumalanga, better known as Greenhills, increased sales by 6% whilst gross profit was negatively impacted by increased maintenance costs. With the shift of the Group's focus to oil and gas, management is currently considering a number of alternatives in relation to the future of the plant.


5. Share-based payments                  


Share-based payments relate to 12 million call options issued to Renaissance BJM Securities Proprietary Limited (South Africa) ("Rencap") in relation to funding provided to enable SacOil to fulfil its obligations in relation to, inter alia, signature bonuses and farm in fees payable to the Nigerian Government on oil concessions OPL 281 and OPL 233. The average strike price of these call options was R1.46 and the call options expired at 29 February 2012.


6. Block III, Albertine Graben, Democratic Republic of the Congo, divestment


At 29 February 2012, SacOil owned 50 per cent of the issued capital of Semliki Energy SPRL ("Semliki"), which in turn holds the oil concession rights pertaining to Block III, Albertine Graben in the DRC ("the Block III Rights"). SacOil and the other shareholder of Semliki, DIG Oil Proprietary Limited ("DIG") (collectively "the Initial Shareholders"), have committed to transfer an aggregate 15 per cent shareholding in Semliki to the DRC government, leaving the Initial Shareholders with an effective 85 per cent interest in Block III before the implementation of the Agreement. In terms of the Production Sharing Contract signed on 4 December 2007 (the "Block III PSC"), within six months of the issue of Presidential Ordinance approving the Block III PSC, the partnership between South Africa Congo Oil Company (Proprietary) Limited and the DRC national oil company, Cohydro (collectively the "Block III Contracting Party") was required to transfer the rights held by the Block III Contracting Party under the Block III PSC to a locally incorporated company. A Presidential Ordinance approving the Block III PSC was issued in June 2010 and Semliki was established to hold the Block III Rights in November 2010.


In March 2011, Semliki disposed of 60% ("Disposed Asset") of its 85% interest in Block III to TOTAL RDC ("Total") for a cash consideration of US$15 million and future contingent bonus payments of US$108 million. Upon disposal, Semliki derecognised that portion of the intangible asset that was disposed of. SacOil furthermore received cash proceeds in an amount of US$1.4 million (net of costs in relation to Block III) from DIG's share of the cash consideration in full and final settlement of a loan advanced to DIG in respect of, inter alia, the Block III Rights.


The loss on derecognition of an intangible asset of R83.4 million represents the difference between the carrying value of the Disposed Asset and the fair value of the consideration receivable at the closing date of the transaction being 31 March 2011.


The farm in agreement between Semliki and Total provides for a cash payment by Total to Semliki upon the occurrence of certain future events ("Bonus"). As there is a contractual right to receive cash from Total, Semliki has recognised a financial asset on its statement of financial position. The asset is initially recognised at its fair value. Subsequently, the financial asset meets the definition of a loan and receivable, and is accounted for at amortised cost taking into account interest revenue and currency movements. At each reporting period SacOil revises its estimate of receipts from the financial asset in line with the requirements of IAS 39. Included in profit and loss is a re-measurement gain of R219 million. At 29 February 2012 the fair value of the financial asset is R263 million and the amount is included in other financial assets. A provision for deferred tax on the Bonus is explained in note 14.


Included in intangible assets is an amount of R130 million, being the value of Semliki's share in Block III after derecognising the Disposed Asset, and including the carry cost portion detailed below.


The farm in agreement also provides for a carry of costs, payable by Total, on behalf of Semliki and constitutes a finance-type carried interest. Per the contract between Total and Semliki, Total shall be entitled to recover the accrued aggregate of the carried costs from Semliki's share of future cost and profit oil. This arrangement is considered a secured borrowing in which the underlying asset is used as collateral.


Semliki has therefore increased its investment in Block III with the carried costs as incurred up to the reporting date, together with a corresponding financial liability representing the amount owed to Total, in an amount of R28.9 million. A corresponding deferred tax asset in an amount of R11.6 million was recognised in profit and loss. Refer note 14 for details. As at 29 February 2012 the fair value of Semliki's interest in Block 111 was R130 million which is included in Intangible assets.


7. Investment income


Interest income of R15.6 million was recognised in profit and loss in relation to a loan owed to SacOil by Energy Equity Resources Limited ("EER") in relation to capital costs paid by SacOil on behalf of EER with respect to oil concession blocks OPL 281 and OPL 233 in Nigeria. In terms of an agreement entered into between EER and SacOil ("Loan Agreement"), all acquisition costs paid by SacOil on behalf of EER bear interest at 25% calculated from the date of incurring such costs to the date of recovery.


The loan is repayable in three equal annual instalments, the first such instalment becoming due 60 business days after first oil production by taking that proportion of EER's entitlement to petroleum that equals one third of the outstanding capital plus interest accrued. The second and third instalments will become payable on the same principle from EER's subsequent entitlement to petroleum. The loan is secured by a cession and pledge over EER's equity interests in both OPL 281 and OPL 233 in favour of SacOil. The loan in an amount of R66.2 million is included in other financial assets.

Also included in investment income is amortised interest in an amount of R13.4 million recognised during the period under review in relation to the financial asset recognised on disposal of the Disposed Asset.


8. Finance costs              


Included in finance costs is cash settlement costs of an equity conversion in an amount of R41.9 million in relation to a facility of US$30.9 million ("Facility") provided to SacOil by Rencap. The management of SacOil elected a cash settlement of the equity conversion to avoid dilution of existing shareholders' interests in SacOil.


9. Trade and other receivables


Included in trade and other receivables is an advance payment of R75.4 million made by SacOil in relation to an agreement whereby SacOil would be granted an exclusive right to negotiate a potential acquisition of certain material oil and gas concessions. Currently, constructive negotiations are in progress with all material stakeholders in relation to the potential acquisition, and clarification of the Company's potential rights in relation to the agreement are on-going.


In the event of a successful transaction which results in the Company acquiring an interest in potentially material oil and gas concessions, the payment may be converted to an intangible asset. In the event that a transaction is unsuccessful, there is a risk that SacOil may not be able to recover the payment but recourse to third parties will be open to the Company. At year end, there were no indicators that this receivable is impaired.


10. Reclassification of Block III acquisition


The purchase of SacOil Proprietary Limited in the 2011 financial year was disclosed as a business combination. On closer reflection, this is not a business combination, but rather an acquisition of an intangible asset (and related liabilities). The purchase was financed through an issue of shares by SacOil Holdings, and therefore constitutes an equity-settled share based payment transaction. The values attributed to this transaction remain unchanged, with the only impact of this reclassification relating to disclosures presented in the annual financial statements.


11. Specific issue of shares for cash


Shareholders are referred to the announcement released on the Securities Exchange News Service ("SENS") of the JSE Limited ("JSE") and on the Regulatory News Service ("RNS") of the London Stock Exchange ("LSE") on Friday, 2 September 2011, regarding the specific issue of ordinary shares to Timtex Investments (Proprietary) Limited ("Timtex"), an associate of Encha Group Limited ("Encha") ("the Specific Issue").


On Tuesday, 30 August 2011, Timtex signed an irrevocable undertaking to subscribe for 111 940 298 new SacOil shares at an issue price of 67 cents per share, being the closing price of SacOil ordinary shares on 29 August 2011, the day before Timtex signed the irrevocable undertaking. The issue price is at a premium of 8.06% to the 30 day volume weighted average price of SacOil on 29 August 2011.


12. Standby Equity Distribution Agreement


On Wednesday, 12 October 2011 SacOil entered into a Standby Equity Distribution Agreement ("SEDA") of US$25 million ("Commitment Amount") with Yorkville Advisers UK LLP ("YA"), an exempt limited partnership registered in the Cayman Islands.


The SEDA is available, unless otherwise terminated earlier in accordance with its terms, for a period of three years, and the number and timing of each advance draw down ("Advance") is at the discretion of the Company provided that the Company shall not be entitled to draw down more than one advance every five trading days, unless otherwise approved by YA.


Limitations on the number of Advances as well as the quantum of the Advances ensures a spread of the drawdown amounts over a three year period. In spreading the drawdowns over three years, the dilution of existing Shareholders is also spread to avoid sudden dilution of existing Shareholders' interests in the Company.


Each Advance by the Company will be settled by the issue of new Ordinary Shares ("Ordinary Shares"). Any Ordinary Shares to be issued in relation to an Advance shall be listed on the JSE and admitted to trading on AIM. The number of Ordinary Shares to be issued in relation to an Advance shall be equal to the Advance amount divided by the purchase price, where the purchase price shall be 94% of the lowest of the daily volume weighted average prices of the Ordinary Shares of the Company during the period of five consecutive trading days beginning on the first trading day after the date of the Advance notice.


At 29 February 2012 an amount of R12.5 million was owed to YA in terms of the SEDA. During the period under review SacOil issued 25 245 087 Ordinary Shares to YA.


13. Stated capital


SacOil issued the following Ordinary Shares during the period under review:


Date             Issued to         Nature of          Number of         Stated

                                   issue                 shares        capital

Opening balance                                     674 090 410    374 029 488

04-Apr-11        Rencap            Specific Issue       796 577      1 720 607

08-May-11        AIM bonus shares  Specific Issue     9 042 215     19 350 341

22-Nov-11        Timtex            Specific Issue   111 940 298     75 000 000

13-Dec-11        YA                Specific Issue    14 318 181      6 300 000

17-Jan-12        Peregrine

                 Securities        General Issue     11 111 112      5 000 000

08-Feb-12        YA                Specific Issue    10 926 906      4 783 988

Closing balance                                     832 225 699    486 184 425


14. Taxation


14.1 Deferred tax


Included in the deferred tax liability is an amount of R105.4 million provided in relation to the contingent bonus payments of US$108 million as referred to in note 6 ("Bonus"). This amount was reduced by a deferred tax asset of R11.6 million which is the estimated future tax benefit available to Semliki in relation to carried costs of US$3.8 million (R28.9 million) actually spent by Total on behalf of Semliki during 2011.


In the DRC, in matters of capital gain tax, the global cost of oil rights transferred during the exploration period up to first investment date are deducted from the overall proceeds of the sale of oil rights, and the difference obtained will constitute the capital gain on which a tax of 40% on the transfer of interest would be levied.


The current provision therefore excludes future costs to be carried by Total on behalf of Semliki up to First Investment Date, which costs could further reduce the value of the deferred tax liability once these costs have been incurred, and the resultant benefit is available to Semliki. The approved joint venture budget for 2012 is US$22 million.


At 29 February 2012 the Company had unused tax losses not recognised as deferred tax assets of R94.2 million (2011: R43.8 million).


14.2 Current tax


Current tax includes R40.9 million (US$6 million) paid to the DRC government in relation to the cash consideration received from Total and dividend withholding tax of R20.5 million (US$3 million) in relation to dividends declared by Semliki.

15. Dividends


The Board has resolved not to declare any dividends to Shareholders for the period under review.


16. Subsequent events


On 12 March 2012, Total acquired a further 6.66% effective interest in Block III from DIG, a shareholder in Semliki. Pursuant to the acquisition, Total's holding in Block III increased to 66.66%, whereas SacOil's effective interest remains unchanged at 12.5%, DIG's holding reduces to 5.84% and the DRC Government retains 15.0%. As a result of this transaction, Semliki, a company incorporated in the DRC and through which SacOil and DIG own their interests in Block III, is now owned 68% by SacOil and 32% by DIG. SacOil's effective interest of 12.5% and its entitlement to contingent cash bonuses of US$54 million and a carry on all exploration expenses up to final investment decision (when a development plan is approved) remain unchanged.


17. Segmental information


The Group's business model has not advanced to a stage where accurate and meaningful segmental information can be presented. Currently, the only operation generating revenue is the Greenhills plant, which is a non-core asset. Sales for the year ended 29 February 2012 are as follows:


                          Group                         Group

                12 months ended               12 months ended

               29 February 2012     %        28 February 2011               %

Export sales         20 709 650    58              20 233 436              58

Local sales          16 462 936    42              14 919 683              42

Total                37 172 586   100             35 143 119              100


By order of the board


Melinda Gous

Fusion Corporate Secretarial Services Proprietary Limited

Company secretary



JSE sponsor                            AIM nominated adviser and joint broker

Nedbank Limited                        finnCap Ltd




Registered office and physical address                      Postal address

2nd Floor, The Gabba                                        PostNet Suite 211

Dimension Data Campus                                       Private Bag X75

57 Sloane Street                                            Bryanston

Bryanston 2021                                              2021


Contact details


Tel: +27 (0) 11 575 7232

Fax: +27 (0) 11 576 2258

Email: info@sacoilholdings.com

Website: www.sacoilholdings.com




Company secretary: Fusion Corporate Secretarial Services Proprietary Limited

Transfer secretaries South Africa: Link Market Services South Africa

Proprietary Limited Transfer secretaries United Kingdom: Computershare Investor Services (Jersey) Limited Corporate legal advisers: Norton Rose South African and United Kingdom Auditors: Ernst & Young Inc.


Notes to oil and gas disclosure


In accordance with AIM Guidelines, Bradley Cerff, is the qualified person that has reviewed the technical information contained in this news release. Bradley has over 16 years' experience in the oil and gas Industry with Masters Degrees in Science and Business Administration focused on foreign direct investment in the African oil and gas industries. He is also a member of the Society of Petroleum Engineers.


About SacOil


SacOil is an African independent upstream oil and gas company, focused on African assets, with a dual listing on the JSE and AIM. SacOil's vision is to build a balanced hydrocarbon exploration and production portfolio using the Company's African heritage to bring about a competitive advantage at the point of entry. SacOil's primary strategic objective is the development, exploration and production of discovered assets, with existing or near-term production, cash and revenue potential.


SacOil is focussed on oil and, where there is a defined access to market, gas in proven hydrocarbon bearing basins. The Company seeks to build a portfolio of assets across the Exploration & Production ("E&P") spectrum from potentially high-impact exploration through to undeveloped discoveries with near-term cash flow potential and to production with defined upside.


The Company is willing and able to operate through the exploration phase but will continue to focus on the establishment of strategic industry partnerships in order to maximise its opportunity set, manage portfolio risk, and ensure that the optimum technical and operating skills are applied to each opportunity.


Consistent with this strategy, SacOil has built up an E&P portfolio including oil discoveries in Nigeria and potentially high-impact exploration in the DRC detailed as follows:


* in Block III DRC, through its partnership with Total, it is envisaged that the work program committed to will demonstrate prospectivity and eventually lead to oil production;


* in relation to OPL 281 Nigeria, SacOil is in the process of evaluating and appraising oil discoveries through the reprocessing of seismic data with a view to drilling an appraisal well; remaining conditions precedent to the farm-in agreement include perfection of title and all the necessary Nigerian government and Nigerian National Petroleum Company ('NNPC') consents in relation to the licence; and

* in OPL 233 Nigeria, the Joint Venture Committee consisting of SacOil, NIGDEL and EER is committed to acquiring 3D OBC seismic data, which should assist in evaluating the size of the existing oil discovery.

This information is provided by RNS
The company news service from the London Stock Exchange

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