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: ZAE0000127460

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

31 May 2012

Johannesburg

OPERATIONAL UPDATE

FINANCIAL TRADING STATEMENT (JSE)

1. Operational Update

1.1 Block III, Albertine Graben, Democratic Republic of the Congo ("Block III")

At the end of 2011, Total, the Block III operator, completed the acquisition and interpretation of a satellite imagery survey over the entire concession. The processing of the satellite imagery reaffirmed the exploration potential of the entire Block III and therefore it was decided to commit to an airborne geographical survey over the whole concession. In preparation for the exploration programme, environmental and social studies were also successfully completed.

For the 2012, a budget of US$30 million was approved by the joint venture, which would include the above mentioned acquisition of an airborne gravity magnetic survey over the entire block by Q3 2012, following which a 2D seismic survey will be designed and planned. The operator's current intention is to use a similar exploration approach to that of the immediately adjacent concession (the prolific Blocks I, 2 & 3 in the Ugandan territory of Lake Albert) which proved highly successful.

In Q1 2012, Total increased their equity interest by acquiring a further 6.66% interest in Block III from DIG Oil to give Total a new total effective 66.66% interest in Block III. 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.

1.2 OPL 281 Nigeria

SacOil and its partners, Energy Equity Resources and Transcorp are awaiting the final award of the OPL 281 Production Sharing Contract (PSC) and perfection of title. The intention is that following award, modelling and planning of the reprocessing of the existing 3D seismic data will commence. 

OPL 281 is a former Shell permit. There are 2 discovery wells on the concession which intersected Hydrocarbon accumulations, which has been attributed 99.2 mboe of gross contingent resources by TRACS International, a top tier Oil & Gas industry competent firm. Deeper prospects have been identified by the block's technical team that may contain further hydrocarbon accumulation.

The concession is located near to existing off-take infrastructure and as such, early monetisation post the successful drilling of a well would be possible.

1.3 OPL 233 Nigeria

SacOil successfully posted a US $25 Million Performance Bond (the "Bond") at the end of Q1 2012 as part of fulfilling its obligations under the Joint Venture and Production Sharing Agreements (PSC). The OPL 233 joint venture has completed the interpretation and evaluation of the existing seismic and well data on the block. In addition, the modelling and planning of a 3D Ocean Bottom Cable (OBC) Survey was completed and finalised in Q1 2012. In preparation for the 3D seismic acquisition, the joint venture partners are in the process of finalising the seismic contractor assessments and engagements for this acquisition. Immediately after this contract award, which we expect imminently, acquisition and processing will commence, leading to what is anticipated to be the citing of an optimal well location. The US$10 million cash collateral provided by SacOil as part of the Bond fully funds the 3D seismic acquisition and interpretation.

The commencement of an extended well test, booking of reserves and generation of cash flow may occur before the end of 2013.

Growth Strategy

As previously stated, the Company, being in its growth phase, is continuously evaluating and assessing acquisition opportunities to move closer to booking of reserves, production and cash flow generation. SacOil is currently under a cautionary announcement in terms of the JSE Listings Requirements as it is in the process of considering various proposals and potential transactions.

Early in 2012 and as part of the growth strategy of the business, the Company was delighted to strengthen its technical management team by bringing on board Willem de Meyer as Vice President - Commercial and Jordaan Fouchè as Vice President - Technical and New Business. Both Willem and Jordaan have, individually, in excess of 25 years' experience in the Oil & Gas Industry and having worked on the investment side in recent years, bring proprietary potential deal flow to the company.

2. Trading update

As part of the JSE Listings Requirements, companies are required to publish a financial trading statement as soon as they are reasonably certain that the financial results for the current reporting period will be more than 20% different to that of the prior corresponding period. Given the nature of SacOil's business, which requires lump sum upfront capital investment, it is not unusual for there to be significant changes in the financial results from one period to another. As such SacOil expects:

·; basic loss per share for the year ended 29 February 2012 to be between 6.12 cents and 7.34 cents per share higher than the prior comparative period; and

·; headline loss per share for the year ended 29 February 2012 to be between 2.18 cents and 2.62 cents per share lower than the prior comparative period.

The above information has not been reviewed or reported on by the Group's auditors, Ernst & Young, and the Group's results for the year ended 29 February 2012 will be published on 31 May 2012.

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