12 Nov 2015 07:00
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")
Update on the Termination process related to Oil Prospecting Licence 281
As previously announced to shareholders on 1 April 2015, SacOil terminated its participation with Transnational Corporation of Nigeria Plc ("Transcorp"), the operator of Oil Prospecting Licence 281 ("OPL281").
In a letter dated 10 December 2014 to SacOil, Transcorp acknowledged SacOil's termination of the Farm-out and Participation Agreement ("FoPA") and confirmed the effective date of such termination as 3 December 2014. Transcorp further acknowledged its liability in writing to SacOil and agreed to refund the farm-in fees and interest thereon in line with the provisions of the FoPA, requesting SacOil to provide Transcorp with written details of the bank account into which payment would be made. The only contention from Transcorp at that time was the interest rate applicable to the refund although such interest rate was clearly stipulated in the FoPA.
SacOil paid $12.5 million towards farm-in fees on 28 February 2011, which fees contractually are to be refunded with interest by Transcorp. Notwithstanding the receipt of Transcorp's written acknowledgment of its repayment obligation in December 2014, as well as its public announcement in April 2015 acknowledging SacOil's exit from OPL281, SacOil subsequently received notice on 18 June 2015 from Transcorp that it's termination of the FoPA was wrongful and amounted to a repudiation of the FoPA. Transcorp has initiated court proceedings in this respect and is also claiming damages from SacOil. SacOil is opposing these proceedings and has engaged counsel to recover all monies due and payable pursuant to the FoPA.
In the interim and pursuant to the FoPA, SacOil filed a notice for arbitration on 28 August 2015 with the Nigerian Chartered Institute of Arbitrators, Nigeria Branch, to recover its farm-in and related fees plus contractual interest thereon.
The SacOil board and management remain committed to recovering from Transcorp all amounts owed and to institute the requisite legal actions accordingly.
JSE Sponsor
PSG Capital Proprietary Limited
12 November 2015
For further information please contact:
SacOil Holdings Limited +27 (0)11 463 6884
Bradley Cerff
finnCap Limited (Nominated Adviser and +44 (0) 20 7220 0500
broker)
Christopher Raggett and James Thompson
FirstEnergy Capital (Joint broker) +44 (0) 20 7448 0200
Hugh Sanderson / David van Erp
About SacOil
SacOil is a South African based independent African oil and gas company, dual-listed on the JSE and AIM, with business operations in Egypt, the Democratic Republic of Congo ("DRC"), the Republic of Malawi and the Republic of Botswana. SacOil also operated in Nigeria until 19 May 2015. The Company has partnered with the Public Investment Corporation SOC Limited and the Instituto de Gestão das Participações do Estado on a project that entails the construction of a gas pipeline from Mozambique to South Africa and the distribution and marketing of gas in southern Africa. The Company continues to evaluate opportunities to secure high impact acreage in other established and prolific hydrocarbon basins in Africa.