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was encountered in that region of Uganda only. The PSC was ratified in 2007 with work programmes structured around five exploration phases with a licence duration until 2035. In 2012 the Company secured presidential approval for a farm-down of 60% interest to TOTAL. The minimum work commitment comprises of seismic acquisition and an estimated two exploration wells for the current phase. The estimated expenditure for this programme is US$70 mm to FID. However, we consider that with an initial work programme of gravity and seismic acquisition programme underway estimated at US$30 mm, we anticipate that the spend will be much more and we estimate that for the purposes of the valuation, the spend could be closer to US$100 mm. Furthermore, under the farm-in to TOTAL, the supermajor has three years from March 2011 to reach FID on the block. SacOil is only required to contribute to funding on the block from FID. The discovery map herein highlights the estimated sediment thickness deepening to the south and from east to west. A recent gravity area magnetic survey completed in September highlighted the potential for similarities to Uganda. Of note TOTAL operates Block 1 in Uganda and we consider that SacOil will benefit from TOTAL’s regional expertise that is directly applicable to DRC

Acquisition of the gravity survey map in September 2012 could highlight that sediment thickness is sufficient for the presence of source rocks, drawing similarities to the northern part of the acreage with Uganda. The independent CPR report highlights that of the wells drilled in the Albert Basin, Uganda, the Turaco discovery wells are the most significant, located only 10 km from Block III. The independent report raises the question of whether sufficient source rocks have been deposited to generate commercial hydrocarbons. From data published by Tullow, the top of the oil window is at 2,600 m, which should indicate that Block III has sufficient sedimentary thickness to allow for oil generation. Additionally, hydrocarbons can migrate from elsewhere from the deeper parts of the Albertine Graben into Block III. There is further concern on the presence of CO2 that was identified in the Turaco-3 well adjacent to Block III that amounted to a 80-90% component of CO2, highlighting commerciality issues on the discovery. However we note that given the extensive exploration work in the country, the presence of CO2

Block III DRC - Carried Through High Impact Exploration Through the Company’s subsidiary Semliki Energy, SacOil holds a net 12.5% interest in Block III, DRC, located to the west of Block III Uganda. The area straddles both the Lake Albert Basin in the north and the Semliki Basins to the south. The Company’s DRC block contains no seismic or well data and much of the geological understanding originates from analogues on the Ugandan side where an abundance of seismic, gravity and magnetic well data is available. A sample of the early wells highlights the depth of the wells from north to south and east to west. In 1Q11, TOTAL, farmed into the block, acquiring 60% interest from Semliki’s 85% interest for a consideration of US$15 mm bonus that included US$6 mm back costs and a further net payment of US$54 mm on both Final Investment Decision (FID) and first production. TOTAL’s interest in the block now stands at 66.6%. The DRC government has a 15% equity interest back-in. An independent resource report undertaken by Bayphase in early 2011 highlighted an unrisked STOIIP best estimate prospective resource potential of 1.52 bnbbl with a 1 in 5 geological chance of success

Assets - Surrounded by Existing Discoveries The Company operates in two principal Sub Saharan jurisdictions, Democratic Republic of Congo (DRC) and Nigeria where in the latter jurisdiction it has two assets. In the DRC, SacOil along with DIG Group has secured an 18.34% working interest in Block III (12.5% net to SacOil). SacOil benefits from a carry through FID that will include an exploration and appraisal programme up to the point of declaring an investment decision. SacOil operates in the country through its local subsidiary Semliki. Block III DRC is located along the Western branch of the East Africa Rift within the Albertine Graben and encompasses two basins, to the north Lake Albert Basin and to the south Semliki Basin. The partners will be targeting two plays similar to discovered plays in Uganda. The block ownership structure is presented in Appendix B. The Company’s Independent Audited Prospective Resources undertaken by TRACS is presented herein highlighting a best case unrisked resources of c.55 mmboe (WI). However, we note that this does not reflect prospectivity from two deeper prospects that are anticipated on OPL281 which could represent further upside

Share Price Performance - Licence Ratification Offers Re-rating Potential The Company’s share price has underperformed compared with regional peers and market indices which we attribute to pending ratification and closure expectation for its Nigerian licences. The lack of material catalysts in the story has somewhat led to share price drift with only a daily average of 2.1 mm and 648,000 shares over a three month period traded in Johannesburg (primary listing) and London respectively. However, we expect a run up in the share price on closure/ratification of the Company’s Nigerian acquisition and commencement of respective work programmes on both OPL233 and seismic acquisition in the DRC

Playing Albert Rift Basin for Free - A JV for an accelerated work programme in the DRC by TOTAL offers SacOil carry through for the exploration and appraisal programme that is expected to see a minimum gross spend of US$100 mm, exceeding the budgeted programme over the next 12 months of US$30 mm. Valuation Underpinned by FID Free Carry - Our target price is derived from the Company’s work programme carry in the DRC equating to approximately 2 pence per share broadly supporting the current share price, while the Company’s two Nigerian assets contributing 5 pence per share risked are not priced in at current trading levels. SacOil Holding Asset Base Source: SacOil Holding Near Term Monetization - SacOil offers investors a line of sight to production within two years in Nigeria benefitting from proximity to existing infrastructure and existing discoveries on its OPL233 asset which benefits from good quality oil (32 API) and proximity to the 600 mmbbl Apoi field operated by Chevron (CVX US).

Investment Summary We initiate coverage with a target price of £0.06 per share in line with our risked NAV and Speculative Buy recommendation that considers a US$100 mm gross work programme carry from TOTAL in the DRC together with a DCF valuation for the Company’s two near-term development assets in Nigeria. Our target price is predicted on the assumption that the Company receives ratification of its assets in Nigeria. As an Africa led E&P Company, SacOil has experienced a rapid and transformational path from a chemical manufacturing Company into an upstream business that has secured interests in acreage in the DRC. The asset base was extended through a JV agreement for Nigerian onshore and offshore licences OPL233 and OPL281 in late December 2010 and March 2011 respectively, that are both currently awaiting ratification and could possibly close before year end. Attractive Acquisition Metrics - An African centric management team provides a first mover advantage and ability to access value accretive deal metrics in Africa, underpinned by approximately US$1 bbl acquisition cost for its onshore and offshore licences OPL233 and OPL281, that compares favourably against other recent Nigerian onshore acquisition metrics

Highlights We are initiating coverage on SacOil Holding Ltd (SAC LN/SCL SJ), a Johannesburg and AIM listed Africa pure exploration and appraisal play with a market cap of £23 mm. The Company holds high impact exploration acreage in the DRC and also in Nigeria, both adjacent to previous regional discoveries holding a combined 55 mmbbl working interest risked prospective resources. The Company’s strategy is focused on leveraging off its African credentials through local partnerships to secure f irst mover advantage into partially de-risked prospective acreage targeting assets under attractive acquisition metrics. The Company benefits from a free carry by operating partner TOTAL through to FID (March 2014) on its Democratic Republic of Congo licence for a likely gross US$100 mm accelerated work programme spend. This, together with a cash generative route in Nigeria within two years following licence ratification from government, provides a floor valuation with near term upside and newsflow. We advance a target price of £0.06 per share risked (£0.11 per share unrisked) and a Speculative Buy recommendation where investors benefit from approximately 100% upside to current trading levels and where governmental approval of the Company’s Nigerian assets could help unlock development. Our target price is predicted on the assumption that the Company receives ratification of its assets in Nigeria

http://www.sacoilholdings.com/operations/company-assets/?id=46

THESE CAN BE ISA'D TOO.

HAVE NO DEBT! New BOD and some very good licence areas ;)

Agreed. I think there must be things happening behind the scenes. With paying down the debt and the recent board changes im hoping there will be some solid progress with the already owned assets and some new deals to come. Could we be the next Afren?

Small volume moves this. A lot of people would be happy to know the company now has no debt also.

NEWS COMING!?

Hoping for a good rise. I will be sleeping. Will check back at lunch time.

ALL BUYS TODAY! But volume still low. Must be some news due here.

I've got a feeling we will have news this week.

Its good to be a debt free company. Especially in these times. We need to get cracking in Nigeria and get some real revenue in the coffers now. GL.

Debt free! This is an excellent situation to be in with the prospects the company has. Lets hope they capitalise on the opportunity.

Something's a foot!