Operational and Trading Update (4629E)
May 31 2012 - 2:00AM
UK Regulatory
TIDMSAC
RNS Number : 4629E
SacOil Holdings Limited
31 May 2012
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 Fouche 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.
JSE Sponsor
Nedbank Capital
For further information please contact:
finnCap Limited (Nominated Adviser
and Broker) +44 (0)20 7220 0500
Matthew Robinson / Christopher Raggett
FirstEnergy Capital (Joint Broker
UK)
Majid Shafiq
Travis Inlow +44 (0) 20 7448 0200
GMP Securities Europe LLP (Joint Broker
UK)
Nick Morgan
Chris Beltgens +44 (0)20 7647 2800
The Riverbed Agency (SA)
Raphala Mogase +27 (0) 11 783 7903
Pelham Bell Pottinger (UK)
Philip Dennis +44 (0)20 7861 3919
Nick Lambert +44 (0)20 7861 3936
Rollo Crichton-Stuart +44 (0)20 7861 3918
This information is provided by RNS
The company news service from the London Stock Exchange
END
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