SAC.L Regulatory News (SAC)

SacOil Holdings Limited

("SacOil" or "the Company")

Reorganisation of Interests in Block III, Democratic Republic of Congo

SacOil announces proposed reorganisation changes to its indirect participating interest in Block III, Albertine Graben ("Block III") in the Democratic Republic of Congo ("DRC"), currently held by its indirect subsidiary Semliki Energy SARL ("Semliki"). The reasons for the reorganisation of the ownership structure are to enable SacOil to represent its interest in Block III directly and to have direct line of sight to the activities of Block III. The impact of the reorganisation is that the assets and liabilities related to fellow Semliki shareholder, Divine Inspiration Group Proprietary Limited ("DIG"), will be retained in Semliki.

Background

Semliki has a direct 18.3% participating interest in Block III alongside partners Total E&P RDC (66.7%) ("Total") and the DRC government (15%). Semliki is currently 68% directly owned by RDK Mining Proprietary Limited ("RDK") with the remaining 32% held by DIG. RDK is a wholly owned subsidiary of SacOil whose effective interest in the asset is therefore 12.5%. The operator of Block III is Total.

Proposed Reorganisation

The proposed reorganisation will separate the respective interests of SacOil and DIG in Block III via a change in ownership of Semliki.

SacOil has formed a new wholly owned subsidiary SacOil DRC SARL ("SacOil DRC"), being a company incorporated in the DRC, which will be directly owned by RDK. Semliki will dispose of a 12.5% participating interest in the PSC and a proportionate interest in the Block III Joint Operating Agreement and Exploration Permit to SacOil DRC for nominal cash consideration. Concurrently Semliki will repurchase the entire shareholding of RDK in Semliki for nominal cash consideration, thus resulting in Semliki becoming a wholly owned subsidiary of DIG.

Semliki shall assign a portion of its future rights and obligations under the Farm-Out Agreements ("FAs") to SacOil DRC with the consent of Total. This assignment represents a transfer of SacOil's rights and obligations attached to the 12.5% effective participating interest in the PSC now held through SacOil DRC pursuant to the disposal highlighted above. The rights and obligations to be assigned include:

· The right to receive bonuses totalling US$54 million pursuant to the provisions of the FAs upon the attainment of First Investment Decision Date and First Oil Date;

· The right to require Total to pay SacOil DRC's share of carried costs;

· The right for Total to recover the carried costs and interest thereon from SacOil DRC's share of cost oil;

· The right to receive payment from Total of an amount equivalent to SacOil DRC's share of the Sell On Premium as defined under the FAs; and

· The obligation to pay SacOil DRC's share of costs to Total under the provisions of the FAs.

Carried and other costs associated with future operational activities cannot be quantified at this stage.

Semliki shall delegate to SacOil DRC its payment obligations in respect of loans owed to SacOil and South Africa Congo Oil Proprietary Limited amounting to $2.5 million and R41.3 million respectively, which arose from historical transactions relating to the acquisition of SacOil's effective 12.5% interest in the PSC.

As part of the reorganisation SacOil has agreed to reimburse DIG operational costs of $150,000, which are primarily representation fees as SacOil does not have an office or presence in the DRC. This reimbursement will be paid on the closing date of the reorganisation. Payment of the reimbursement amount will constitute full and final settlement of all and any claims by DIG, Semliki and their affiliates against SacOil and its affiliates.

SacOil and DIG will retain their respective participating interests of 12.5% and 5.87% in Block III post the reorganisation. SacOil's entire interest in Block III will be held via SacOil DRC.

Rationale

The reasons for the reorganisation of the ownership structure are to enable SacOil to represent its interest in Block III directly and to have direct line of sight to the activities of Block III.

Timeline

On 29 February 2016, SacOil and DIG concluded the transaction agreements implementing the reorganisation. Closing is subject to all necessary approvals being procured and necessary amendments to the relevant Block III agreements being effected.

JSE Sponsor

PSG Capital Proprietary Limited

1 March 2016

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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, 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.

For further information, please visit www.sacoilholdings.com.