SAC.L Regulatory News (SAC)

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")

LOAN SETTLEMENT AGREEMENT

SacOil is pleased to announce that it has entered into a settlement agreement (the "Settlement Agreement") with Energy Equity Resources Norway Limited ("EERNL") relating to outstanding loan amounts owing by EERNL and its subsidiaries ("EERNL Group")to the Company.

The EERNL Group's loans originated from the joint participation in Oil Prospecting Licence ("OPL") 233 in Nigeria, whereby the Company advanced funds on behalf of EERNL Group to secure the participation interest in OPL 233.

In October 2011, the Company advanced US$5 million in loans to EERNL (the "Loans") to fund the obligation of its subsidiary EER 233 Nigeria Limited ("EER 233") to pay a performance bond in respect of OPL 233.

The Loans carried an interest rate of between 25% per annum and 32% per annum, with payment due in various instalments. The Loans were secured in SacOil's favour against EER 233's equity, effectively giving the Company security over EER 233's 20% interest in OPL 233.

The EERNL Group has to date been unable to settle the amount outstanding under the Loans, which amounts to approximately US$24.2 million.

As at 31 August 2014, the Loans have not been impaired in SacOil's accounts as the value of the security notionally exceeds the carrying value of the Loans. SacOil will provide a further update with regard to the accounting treatment of the Loans in due course.

Further, pursuant to a farm-out agreement executed between SacOil, EER 281 and TransCorp in relation to OPL 281, the Company advanced funds on behalf of the EERNL Group to secure the farm-in into OPL 281. The total sum due to be repaid by TransCorp following SacOil's termination of its participation in the OPL 281 farm-in can be paid directly into an account nominated by the EERNL Group.

In the light of the above, SacOil and EERNL have signed the Settlement Agreement, the salient terms of which are set out below:

OPL281

· In full and final settlement of any amounts advanced to the EERNL Group by SacOil in respect of OPL 281, EER 281 on behalf of the EERNL Group has nominated a SacOil bank account for the repayment of the full amount due from Transcorp. As previously announced, this will effectively return $12.5 million plus interest to SacOil.

· SacOil will indemnify EERNL Group against any and all costs incurred or sustained as a result of any counterclaims by Transcorp; in return, EERNL Group has ceded its rights to SacOil 281 relating to any claims that it has against Transcorp.

OPL 233

The repayment of the Loan relating to OPL 233 has been restructured as follows:

· Interest freeze from 30 November 2014 on the outstanding Loan balance of US24.2 million;

· EERNL Group's right to the US$ 2.25 million promote fee, payable by SacOil to EERNL Group upon receipt of government approval for the assignment of interest in OPL 233, is set off against the outstanding balance on the Loans;

· Any and all proceeds subsequently received by EERNL Group through its involvement in OPL233 to be allocated to the repayment of the Loans;

· If, at the time of first oil production from Oil Mining Licence 113("OML 113") there continues to be sums outstanding pursuant to the Loans, 50% of the net OML 113 cash flow amounts - after providing for the debt service costs, capital expenditure and other operating costs relating to OML 113 - received by EERNL will be paid to SacOil semi-annually to reduce the outstanding Loans, up to US$ 5 million.

General

· Terminates the Master Joint Venture Agreement between SacOil and EERNL, dated 24 September 2010, including all rights and obligations consequent thereto.

In conclusion, the Settlement Agreement restructures EERNL Group's debt obligations to SacOil in exchange for SacOil's waiver of certain rights and interests emanating from the Loans. However, SacOil retains the existing security over EERNL Group's 20% interest in OPL 233.

Dr Thabo Kgogo, CEO of SacOil, commented, "This settlement reflects the restructuring of the loans advanced to the EERNL Group and the consequences of our termination of the OPL 281 contract with Transcorp. It also brings an end to the Master Joint Venture Agreement with EERNL with regards to the joint investigation of new exploration opportunities. This is in line with our renewed focus on development and production assets. Overall, we have negotiated this settlement to restructure the EERNL Group's debt obligations and enhance our ability to recover the sums owed to the Company and its shareholders.""

JSE Sponsor

PSG Capital Proprietary Limited

8 April 2015

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