TIDMSAC
RNS Number : 7205R
SacOil Holdings Limited
21 November 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: ZAE000127460
("SacOil" or "the Company" or "the Group")
Reviewed interim results
for the six months ended
31 August 2012
To view the announcement with the tables correctly formatted
please click on the link below: -
http://www.rns-pdf.londonstockexchange.com/rns/7205R_1-2012-11-21.pdf
SacOil, the African independent upstream oil and gas
company,
is pleased to announce its reviewed financial results for
the
six months ended 31 August 2012.
Highlights
- Block III, DRC: Successful acquisition of an airborne gravity
and magnetic survey,
post period-end;
- OPL 233, Nigeria: Seismic acquisition on part of the block and
successful
posting of performance bond;
- OPL 281, Nigeria: Restructuring of farm in agreement,
reducing
capex requirement from SacOil;
- Greenhills Plant: Disposal of non-core manganese plant to
management
and employees for R7 million, post period-end;
- Successful resolution of Identiguard litigation matter with
SacOil awarded
judgement in its favour and costs; and
- Comprehensive loss attributable to owners of the parent of
R12.6 million
(2011: R100.1 million restated)
Commenting, Robin Vela,
Chief Executive of SacOil said:
"We have continued to make good progress over the last six
months albeit in challenging times
in debt and capital markets for junior exploration companies. On
our nearer term producing
assets, we successfully posted the US$25 million performance
bond on OPL 233 in Nigeria,
enabling us to move forward with the acquisition of 3D seismic
data, which will form the
basis for drilling our first well. We have also acquired further
3D seismic data covering a
portion of the block, which suggests additional prospectivity.
On the high impact Block III in
the DRC, Total the operator, successfully completed an airborne
gravity and magnetic survey, which
will form the basis for a 2D seismic programme. Concurrently, we
have disposed of the loss-making
non-core Greenhills Manganese Processing Plant, allowing
management and capital resources to be
focused on the core oil and gas business. With solid work
programmes in place on our blocks, we
look forward to reporting further progress in the next
period."
Introduction
SacOil's vision is to build a balanced hydrocarbon exploration
and production portfolio using the Company's African heritage as a
competitive advantage at the point of entry. The Company's
strategic objectives are the development,exploration and production
of discovered oil and gas assets with existing or near-term
production, cash and revenue potential balanced with some exposure
to high impact exploration. To that end, the Company has interests
in three oil concessions - Block III, Albertine Graben in the
Democratic Republic of Congo ("DRC") and OPL 233 and OPL 281 in
Nigeria.
Oil and gas assets
Block III, Albertine Graben, DRC
At the beginning of 2012, the Government of the DRC granted a
Presidential Ordinance to Total E&P RDC ("Total"), the operator
of Block III, for their 60% interest. Pursuant to the Presidential
Ordinance, the work programme for 2012 was consequently approved by
the Block III Operations Committee, including a budget of $30
million. The main item in the 2012 work programme was the
acquisition of a gravity and magnetic survey over the northern part
of Block III outside the Virunga National Park, which was completed
in September this year, post period-end. Preliminary processing of
the data broadly confirms the existence of the rift graben on trend
with the adjacent concessions in Uganda. On completion the survey
will form the basis for planning a prolific 2D seismic survey.
Following the farm-out of Block III to Total in March 2011,
SacOil is carried for the entire work programme and will not be
required to contribute any further capital into this project until
a development plan is put in place.
On 12 March 2012, Total acquired a further 6.66% effective
interest in Block III from Semliki Energy SPRL ("Semliki"), a
special purpose vehicle jointly owned by SacOil and DIG Oil
(Proprietary) Limited ("DIG"), for a cash consideration of US$10
million and future contingent bonuses amounting to US$11.3 million.
Pursuant to the acquisition, Total's holding in Block III increased
to 66.66%, whereas SacOil's effective interest in Block III remains
unchanged at 12.5%. DIG's holding reduced to 5.84% and the DRC
Government retains a 15.0% interest in the asset. As a result of
this transaction, Semliki, a company incorporated in the DRC and
through which SacOil and DIG own their interests in Block III, is
now owned 68% by SacOil and 32% by DIG.
OPL 233, Nigeria
On 17 April 2012, SacOil procured from Ecobank a US$25 million
Performance Bond ("the Bond") as part of its
farm in obligation for a 20% interest in OPL 233. The Bond was
provided to Nigdel United Oil Company Limited ("NIGDEL") to fulfil
its obligations under the Production Sharing Contract ("PSC"). The
Bond was payable to the Nigerian National Petroleum Corporation
("NNPC"). The successful posting of the Bond allows the partners to
proceed with the acquisition of up to 100 km2 3D Ocean Bottom Cable
("OBC") seismic survey. Results of this survey are expected to
enable the optimum placement of a well to appraise the Olobia-1 oil
discovery.
In addition, during this period the OPL 233 joint venture gained
access to a portion of an OBC Seismic acquired by Chevron, which
extends into OPL 233 from the adjacent oil producing Chevron
operated OML 86 concession. SacOil is in the process of reviewing
this data in more detail but an initial study conducted by Atlantic
Subsurface, a National Petroleum Investment Management Services
("NAPIMS") approved consulting firm, suggests additional
prospectivity in the block, with the identification of the Olobia
West prospect. SacOil and its partner Energy Equity Resources
("EER") also intend to acquire at least 100 km2 3D OBC Seismic as
part of the farm in obligation for their respective 20% interests
in OPL 233.
During the next period SacOil will undertake a resource update
following the analysis of data collected from the Chevron OBC
survey and the new OBC survey to be acquired.
SacOil has a 20% share in OPL 233 subject to government consent,
following which SacOil and EER will have to fulfil their joint
farm-in obligation to pay NIGDEL a remaining farm-in fee of US$9.1
million. SacOil is carrying EER's obligation of US$4.0 million
until first oil date at an interest rate of 25% nominal annual
compounded monthly ("nacm").
A gross work programme budget of US$25 million is estimated for
the one year extension period of phase 1 of the exploration period
(granted by NNPC on 14 November 2012) and involves the acquisition
of 3D OBC and the drilling of at least one well. SacOil's share of
this is US$12.5 million.
In relation to OPL 233, the remaining summary financial
obligations on SacOil are as follows:
- US$9.1 million to fulfil farm-in obligations of both SacOil
and EER post-governmental consent/receipt of
definitive title; and
- US$12.5 million to fund its share of the work programme over
the next year.
By posting the performance bond, SacOil has enabled the joint
venture to retain the licence, together with a one year
extension to phase 1 of the exploration programme expiring on 15
November 2013.
OPL 281, Nigeria
On 8 February 2012, SacOil agreed revised terms for its
partnership with Transnational Corporation of Nigeria PLC
("Transcorp") and EER.
Highlights of the revised terms of the farm-in to licence OPL
281 are as follows:
- a reduction in farm-in costs for SacOil and EER from US$32.50
million to US$24.50 million. SacOil has
already paid US$12.50 million of this amount;
- Transcorp will remain the operator of OPL 281 and will pay its
60% share of the capex costs to first
production as opposed to SacOil and EER carrying 100% of these
costs as previously agreed; and
- Transcorp to post the performance bond to the Nigerian
Government.
SacOil has a 20% share in OPL 281 subject to government consent,
following which SacOil will have to fulfil its farm-in obligation
to pay Transcorp a remaining farm-in fee of US$12.0 million on
behalf of SacOil and EER. SacOil is carrying EER's obligation of
US$12.25 million until first oil date at an interest rate of 25%
nacm.
A gross work programme budget of US$15.0 million is estimated
for phase 1 of the exploration period and involves the reprocessing
of the existing 3D seismic data and the drilling of at least one
well. SacOil's share of this is US$3.0 million. In relation to OPL
281, the remaining summary financial obligations on SacOil are as
follows:
- US$12.0 million to fulfil farm-in obligations of both SacOil
and EER post governmental consent/receipt of
definitive title; and
- US$3.0 million to fund its share of the work programme over
the next year.
Other assets - Greenhills Manganese Processing Plant
("Greenhills Plant" or the "Plant")
The Greenhills Plant is a non-core asset and SacOil has in the
past announced its intention to divest this asset. Revenue
generated by the Plant continued to deteriorate due to employment
and maintenance issues, the extensive need for capital investment
and the subsequent loss of a major customer as a result of product
related concerns. On 15 October 2012 the Company finalised a sale
agreement with management and employees of the Plant, under which
the Plant was sold on an "as is" and vendor financed basis, with
the liabilities for rehabilitation and environmental aspects passed
on to the purchaser. The sale of the Plant will eliminate the
Company's monthly opex contribution to the Plant of R0.2 million
per month, ensure the continued employment of employees and enable
SacOil management to focus on the core oil and gas business. The
purchaser has the obligation to provide a minimum of R2.0 million
working capital upfront; invest R5.0 million in capex for the
recapitalisation and sustaining of the Plant; and make a staged
payment of R7.0 million to SacOil. The effective date for the
transaction was 17 September 2012 and the sale was finalised on 15
October 2012. Details relating to the disposal of the Plant are
included in notes 12 and 18.3 to the condensed Group interim
financial statements.
Financial review
Continuing operations
A loss from continuing operations of R13.7 million was reported
compared to R100.4 million in
the prior comparable period. This principally reflected the
recognition of profit on disposal of the
6.66% interest in Block III, increases in interest income and
foreign exchange gains offset by debt
facility/capital raising fees, corporate and general costs and
an impairment provision on the Greenhills
Plant.
Other income totalled R55.2 million (2011: R139.0 million). On
12 March 2012, Total acquired from Semliki,
a special purpose vehicle jointly owned by SacOil and DIG, a
further 6.66% effective interest in Block III for a cash
consideration of US$10 million and future contingent bonuses
receivable amounting to US$11.3 million. This followed the prior
year disposal to Total of a 60% interest in Block III. Of the R40.9
million profit (2011: R83.4 million loss) on the sale of
exploration and evaluation assets recorded in the current period,
R45.0 million related to the disposal of the 6.66% interest in
Block III and was offset by a R4.1 million reversal of contingent
bonuses receivable related to the prior period disposal. Contingent
consideration attached to the same transactions netted out at a
R31.6 million charge (2011: R219.1 million gain) with a R26.8
million gain on the current period disposal more than offset by a
R58.4 million
reversal related to prior year provisions. SacOil's underlying
12.5% interest in Block III was retained through increasing its
interest in Semliki to 68%. The impact of the transaction was then
adjusted for through "Non-controlling interest".
Foreign exchange gains of R38.9 million (2011: R3.3 million)
principally related to the US$ denominated loans to EER and the
cash collateral held by Ecobank as security for the performance
bond on OPL 233. The posting of the performance bond required a
cash collateral of US$10 million which was funded by lending
facilities from Renaissance BJM Securities (Proprietary) Limited
("Rencap") and Yorkville Advisors LLP ("Yorkville Advisors"). It
was agreed between EER and SacOil that SacOil would fund all costs
relating to the performance bond with subsequent recovery of half
of these costs, being EER's portion, from EER based on a
contractual agreement stipulating applicable interest and
repayment dates.
Other operating costs totalled R23.2 million (2011: R37.7
million) and principally comprised ongoing employment costs,
professional, legal and audit fees and the costs of maintaining the
Company's listings on the Johannesburg and London Stock Exchanges.
The level of such expenses has decreased due to the non-recurrence
of once-off AIM initial listing costs incurred in the prior period
amounting to R21.9 million. Operating costs in the current period
were tightly controlled to limit constraints on working capital
requirements.
An impairment loss of R1.5 million was recognised, immediately
before the classification of the Greenhills Plant as an "Asset held
for sale", to reduce the carrying amount of the assets in the
disposal group to the fair value less costs to sell. No share-based
payment expenses were incurred in the current period (2011: R50.9
million).
Investment income of R27.2 million (2011: R6.7 million)
principally comprised interest of R18.9 million (2011: R5.8
million) on loans made to EER which increased following the posting
of the performance bond. In addition, R7.9 million of imputed
interest (2011: R0.6 million) reflected the unwinding of the
discount applied to the deferred consideration related to the Block
III disposals totalling R15.2 million partially offset by a R7.3
million impact of reversing some prior year provisions.
The increase in finance costs by R19.6 million to R21.6 million
related to interest costs and debt facility/capital raising fees on
the Rencap and Yorkville Advisors borrowing facilities.
Current tax represents R26.8 million (2011: R41.0 million) of
capital gains tax on the profit on disposal of the additional 6.66%
interest in Block III, R4.9 million (2011: R10.2 million) of
foreign dividend tax and R18.4 million (2011: nil) estimated
penalties on the late payment of prior period tax charges. Deferred
tax includes R10.7 million of provisions (2011: R6.1 million)
related to the current period disposal of the interest in Block III
net of R12.8 million of releases (2011: R88.0 million charges)
related to the reversal of prior period provisions. A further R3.3
million (2011: nil) has beenprovided against the expected recovery
of costs carried by Total out of future production.
Discontinued operations
The loss of R1.4 million (2011: profit of R2.0 million) from
discontinued operations related to the Greenhills Plant. Declining
revenues of R9.1 million (2011: R19.3 million) reflected the loss
of a major customer and other factors described above whilst cost
of sales of R7.3 million (2011: R13.6 million), salaries of R2.4
million (2011: R3.0 million) and other operating costs of R0.8
million (2011: R0.7 million) did not decline in proportion.
Financial position
Non-current assets showed an overall decrease to R472.9 million
from R519.6 million at 29 February 2012.
The reduction in property, plant and equipment from R6.1 million
at 29 February 2012 to R0.4 million at 31 August 2012 principally
reflected the transfer of the Greenhills Plant to assets held for
sale after depreciation. The reduction in exploration and
evaluation assets from R182.0 million to R135.7 million reflected
the disposal of a 6.66% interest in Block III and the revision of
capitalised costs following the availability of additional cost
information, partially offset by the provision for costs incurred
on Block III exploration by Total on the Company's behalf.
The increase in other financial assets from R331.4 million to
R336.8 million included a R10.7 million net increase in long-term
loans. Future contingent bonuses receivable amounting to R26.8
million were recognised in the current period following the
disposal by Semliki of the 6.66% interest in Block III, together
with imputed interest and foreign exchange gains amounting to R50.3
million attributable to all contingent bonuses receivable from
Total. However, future contingent bonuses receivable attributable
to the first farm-out which occurred in March 2011 were
re-estimated in the current period from US$108 million to US$90.5
million. This resulted in the reversal of contingent bonuses
receivable
of R82.4 million.
Current assets showed a significant increase to R290.9 million
from R98.5 million at 29 February 2012 largely due to increases
within trade receivables of loans to EER of R93.7 million, to DIG
of R22.5 million and of the cash collateral related to the
performance bond of R84.6 million within cash and cash equivalents.
The advance against asset negotiation rights of R75.5 million
remains in place although the Board recognises that there is a
chance that negotiations may be unsuccessful (see note 10).
Cash balances of R95.1 million showed an increase of R84.3
million during the period. This primarily reflects the US$10
million cash collateral deposited with Ecobank as security for the
Performance Bond on OPL 233.
Shareholders' equity attributable to equity holders of the
parent increased from R333.1 million during the previous period to
R381.9 million. Increases in issued share capital from R486.2
million to R523.0 million arose from the conversion of loans due to
Yorkville Advisors into shares under the Standby Equity
Distribution Agreement whilst a reduction in accumulated losses
largely reflected the profit within Semliki arising from the
disposal of 6.66% of Block III. Following the disposal of the
Greenhills Plant in October 2012, management now plans to
concentrate its activities in the oil and gas exploration and
production sector. Consequently it is intended to review the
Group's accounting policies and the presentation of its results to
ensure that they fully reflect relevant recognised practice in this
industry whilst still
remaining in compliance with IFRS. Any changes arising from this
review will be reflected in the results for the full year to 28
February 2013.
Financing the Group's activities Total cash generated during the
interim period was R84.3 million (2011: R6.1 million cash
utilisation) resulting in a balance of R95.1 million as at 31
August 2012. Net cash used in operating activities of R115.5
million (2011: R65.6 million) was largely funded through the net
impact of the sale of the 6.66% interest in Block III after
adjustment for SacOil's increased holding in Semliki, with
increased borrowings further contributing to cash resources.
Cash utilised in operations of R115.8 million (2011: R31.4
million) is reflective of costs associated with the procurement of
the Performance Bond and advances to our partners. The decline in
revenues and the increase in operating losses from the Greenhills
Plant also contributed to the decrease in operating cash flows.
The repayment of short-term loans by our partners is expected to
improve cash flows from operations.
Prior period error During the period ended 31 August 2011,
whilst the Group correctly recognised the impact of the cash
proceeds, together with a receivable associated with the contingent
bonuses receivable from Total on the farm-out of the 60% interest
of Block III, the value of the receivable, as well as the tax and
interest impact of these amounts were not correctly recognised. The
previously reported comprehensive loss attributable to SacOil of
R31.1 million has been correctly adjusted and restated to a
comprehensive loss of R100.1 million to correct these misstatements
as at 31 August 2011.
Details of these adjustments are included in note 16 to the
condensed Group interim financial statements.
Principal risks to 2012 - 2013 performance The Directors do not
consider that the principal risks as published in the Annual Report
for the year ended 29 February 2012, on pages 14 and 15, have
changed as at the date of this interim report. A detailed analysis
of these risks can be
obtained in the Annual Report for the year ended 29 February
2012.
Going concern The Group continues to rely on its ability to
successfully raise further financing to fund future working capital
and development needs. The Board is satisfied that the Group has
access to adequate resources to continue operating for the next 12
months. The condensed Group interim financial statements have
therefore been prepared on a going
concern basis.
By order of the Board Robin Vel(Chief Executive)
Johannesburg 21 November 2012
Consolidated statement of comprehensive income
------------------------------------------------------------------------------------------------
Six months ended 31 August 2012
------------------------------------------------------------------------------------------------
Restated*
------------------------------------------------------------------------------------------------
Reviewed Unreviewed Audited
------------------------------------------------------------------------------------------------
Six months Six months 12 months
------------------------------------------------------------------------------------------------
to 31 August to 31 August to 29 February
------------------------------------------------------------------------------------------------
2012 2011 2012
------------------------------------------------------------------------------------------------
Notes R R R
------------------------------------------------------------------------------------------------
Continuing operations
------------------------------------------------------------------------------------------------
Other income 2 55 213 642 138 998 198 248 612 642
------------------------------------------------------------------------------------------------
Other operating costs 3 (23 198 827) (37 697 722) (161 018 684)
------------------------------------------------------------------------------------------------
Profit from operations 32 014 815 101 300 476 87 593 958
------------------------------------------------------------------------------------------------
Share-based payment expense - (50 885 441) (8 891 216)
------------------------------------------------------------------------------------------------
Operating profit 32 014 815 50 415 035 78 702 742
------------------------------------------------------------------------------------------------
Investment income 4 27 203 337 6 729 254 29 455 933
------------------------------------------------------------------------------------------------
Finance costs 5 (21 517 167) (2 031 756) (44 402 672)
------------------------------------------------------------------------------------------------
Profit before taxation 37 700 985 55 112 533 63 756 003
------------------------------------------------------------------------------------------------
Taxation 6 (51 392 969) (155 542 685) (155 308 763)
------------------------------------------------------------------------------------------------
Loss for the period from continuing
------------------------------------------------------------------------------------------------
operations (13 691 984) (100 430 152) (91 552 760)
------------------------------------------------------------------------------------------------
Discontinued operations
------------------------------------------------------------------------------------------------
(Loss)/Profit for the period from discontinued
------------------------------------------------------------------------------------------------
operations 12 (1 414 628) 2 027 777 1 819 128
------------------------------------------------------------------------------------------------
Loss for the period (15 106 612) (98 402 375) (89 733 632)
------------------------------------------------------------------------------------------------
Other comprehensive loss:
------------------------------------------------------------------------------------------------
Release of depreciation on property revaluation - - (340 000)
------------------------------------------------------------------------------------------------
Taxation related to components of other
------------------------------------------------------------------------------------------------
comprehensive income - - 95 200
------------------------------------------------------------------------------------------------
Other comprehensive loss for the period
------------------------------------------------------------------------------------------------
net of taxation - - (244 800)
------------------------------------------------------------------------------------------------
Total comprehensive loss (15 106 612) (98 402 375) (89 978 432)
------------------------------------------------------------------------------------------------
(Loss)/Profit attributable to:
------------------------------------------------------------------------------------------------
Owners of the parent (12 647 013) (100 121 875) (95 506 424)
------------------------------------------------------------------------------------------------
Non-controlling interest (2 459 599) 1 719 500 5 772 792
------------------------------------------------------------------------------------------------
(15 106 612) (98 402 375) (89 733 632)
------------------------------------------------------------------------------------------------
Total comprehensive (loss)/profit
------------------------------------------------------------------------------------------------
attributable to:
------------------------------------------------------------------------------------------------
Owners of the parent (12 647 013) (100 121 875) (95 751 224)
------------------------------------------------------------------------------------------------
Non-controlling interest (2 459 599) 1 719 500 5 772 792
------------------------------------------------------------------------------------------------
(15 106 612) (98 402 375) (89 978 432)
------------------------------------------------------------------------------------------------
Loss per share from all operations
------------------------------------------------------------------------------------------------
Basic loss per share (cents) 7 (1.64) (14.71) (13.35)
------------------------------------------------------------------------------------------------
Diluted loss per share (cents) 7 (1.64) (14.46) (13.24)
------------------------------------------------------------------------------------------------
Loss per share from continuing operations
------------------------------------------------------------------------------------------------
Loss per share from continuing operations
------------------------------------------------------------------------------------------------
(cents) 7 (1.46) (15.01) (13.57)
------------------------------------------------------------------------------------------------
Diluted loss per share from continuing
------------------------------------------------------------------------------------------------
operations (cents) 7 (1.45) (14.75) (13.49)
------------------------------------------------------------------------------------------------
*Refer to note 16 for details relating to the restatement.
------------------------------------------------------------------------------------------------
Consolidated statement of financial position
------------------------------------------------------------------------------------------------------------
Six months ended 31 August 2012
------------------------------------------------------------------------------------------------------------
Restated*
------------------------------------------------------------------------------------------------------------
Reviewed Unreviewed Audited
------------------------------------------------------------------------------------------------------------
Six months Six months 12 months
------------------------------------------------------------------------------------------------------------
to 31 August to 31 August to 29 February
------------------------------------------------------------------------------------------------------------
2012 2011 2012
------------------------------------------------------------------------------------------------------------
Notes R R R
------------------------------------------------------------------------------------------------------------
ASSETS
------------------------------------------------------------------------------------------------------------
Non-current assets
------------------------------------------------------------------------------------------------------------
Property, plant and equipment 394 269 6 281 592 6 148 362
------------------------------------------------------------------------------------------------------------
Exploration and evaluation assets 8 135 721 284 153 056 333 181 995 823
------------------------------------------------------------------------------------------------------------
Other financial assets 9 336 829 120 288 003 480 331 430 863
------------------------------------------------------------------------------------------------------------
Total non-current assets 472 944 673 447 341 405 519 575 048
------------------------------------------------------------------------------------------------------------
Current assets
------------------------------------------------------------------------------------------------------------
Inventories - 2 401 083 2 540 131
------------------------------------------------------------------------------------------------------------
Trade and other receivables 10 195 776 905 132 855 709 85 219 044
------------------------------------------------------------------------------------------------------------
Cash and cash equivalents 11 95 118 280 11 786 472 10 774 298
------------------------------------------------------------------------------------------------------------
Total current assets 290 895 185 147 043 264 98 533 473
------------------------------------------------------------------------------------------------------------
Assets held for sale 12 9 138 453 - -
------------------------------------------------------------------------------------------------------------
Total assets 772 978 311 594 384 669 618 108 521
------------------------------------------------------------------------------------------------------------
EQUITY AND LIABILITIES
------------------------------------------------------------------------------------------------------------
Shareholders' equity
------------------------------------------------------------------------------------------------------------
Share capital 13 522 956 123 468 379 828 486 184 423
------------------------------------------------------------------------------------------------------------
Reserves 29 743 531 38 879 547 29 743 531
------------------------------------------------------------------------------------------------------------
Accumulated loss (170 768 333) (196 321 260) (182 814 593)
------------------------------------------------------------------------------------------------------------
Equity attributable to equity holders of the parent 381 931 321 310 938 115
333 113 361
------------------------------------------------------------------------------------------------------------
Non-controlling interest 39 431 271 163 479 174 115 731 732
------------------------------------------------------------------------------------------------------------
Total shareholders' equity 421 362 592 474 417 289 448 845 093
------------------------------------------------------------------------------------------------------------
LIABILITIES
------------------------------------------------------------------------------------------------------------
Non-current liabilities
------------------------------------------------------------------------------------------------------------
Long-term borrowings 20 638 362 - 28 939 490
------------------------------------------------------------------------------------------------------------
Deferred tax liability 94 911 472 94 054 385 93 728 263
------------------------------------------------------------------------------------------------------------
Provisions - 1 006 385 1 065 974
------------------------------------------------------------------------------------------------------------
Total non-current liabilities 115 549 834 95 060 770 123 733 727
------------------------------------------------------------------------------------------------------------
Current liabilities
------------------------------------------------------------------------------------------------------------
Other financial liabilities 14 148 382 915 - 12 496 195
------------------------------------------------------------------------------------------------------------
Current taxation payable 70 852 538 20 495 100 20 495 100
------------------------------------------------------------------------------------------------------------
Trade and other payables 12 688 483 4 411 510 12 538 406
------------------------------------------------------------------------------------------------------------
Total current liabilities 231 923 936 24 906 610 45 529 701
------------------------------------------------------------------------------------------------------------
Liabilities associated with assets classified
------------------------------------------------------------------------------------------------------------
as held for sale 12 4 141 949 - -
------------------------------------------------------------------------------------------------------------
Total liabilities 351 615 719 119 967 380 169 263 428
------------------------------------------------------------------------------------------------------------
Total equity and liabilities 772 978 311 594 384 669 618 108 521
------------------------------------------------------------------------------------------------------------
*Refer to note 16 for details relating to the restatement.
------------------------------------------------------------------------------------------------------------
Consolidated statement of cash flows
---------------------------------------------------------------------------------------------------------
Six months ended 31 August 2012
---------------------------------------------------------------------------------------------------------
Restated*
---------------------------------------------------------------------------------------------------------
Reviewed Unreviewed Audited
---------------------------------------------------------------------------------------------------------
Six months Six months 12 months to
---------------------------------------------------------------------------------------------------------
to 31 August to 31 August 29 February
---------------------------------------------------------------------------------------------------------
2012 2011 2012
---------------------------------------------------------------------------------------------------------
R R R
---------------------------------------------------------------------------------------------------------
Cash flows from operating activities
---------------------------------------------------------------------------------------------------------
Cash used in operations (115 816 936) (31 360 793) (133 918 365)
---------------------------------------------------------------------------------------------------------
Investment income/(costs) 354 795 4 693 553 (1 447 623)
---------------------------------------------------------------------------------------------------------
Finance costs - 2 031 756 (44 402 672)
---------------------------------------------------------------------------------------------------------
Taxation paid - (40 990 200) (40 990 200)
---------------------------------------------------------------------------------------------------------
Net cash used in operating activities (115 462 141) (65 625 684) (220 758 860)
---------------------------------------------------------------------------------------------------------
Cash flows from investing activities
---------------------------------------------------------------------------------------------------------
Purchase of property, plant and equipment - (135 909) (504 209)
---------------------------------------------------------------------------------------------------------
Purchase of exploration and evaluation assets - (508 907) (508 907)
---------------------------------------------------------------------------------------------------------
(Increase)/Decrease in other financial assets - (116 223 530) 19 493 215
---------------------------------------------------------------------------------------------------------
Sale of exploration and evaluation assets 75 997 000 143 465 700 143 465 700
---------------------------------------------------------------------------------------------------------
Net cash from investing activities 75 997 000 26 597 354 161 945 799
---------------------------------------------------------------------------------------------------------
Cash flows from financing activities
---------------------------------------------------------------------------------------------------------
Proceeds on share issue - 75 000 000 80 000 000
---------------------------------------------------------------------------------------------------------
Increase in other financial liabilities 148 382 917 - 23 580 182
---------------------------------------------------------------------------------------------------------
Finance lease payments - (90 508) (90 508)
---------------------------------------------------------------------------------------------------------
Dividends paid to non-controlling interest (24 573 794) - (51 801 149)
---------------------------------------------------------------------------------------------------------
Equity-settled expenses - (41 994 225) -
---------------------------------------------------------------------------------------------------------
Net cash from financing activities 123 809 123 32 915 267 51 688 525
---------------------------------------------------------------------------------------------------------
Total cash movement for the period 84 343 982 (6 113 063) (7 124 536)
---------------------------------------------------------------------------------------------------------
Cash at the beginning of the period 10 774 298 17 899 535 17 898 834
---------------------------------------------------------------------------------------------------------
Total cash at the end of the period 95 118 280 11 786 472 10 774 298
---------------------------------------------------------------------------------------------------------
*Refer to note 16 for details relating to the restatement.
---------------------------------------------------------------------------------------------------------
Consolidated statement of changes in equity
---------------------------------------------------------------------------------------------------------------------------------------------------
Six months ended 31 August 2012
---------------------------------------------------------------------------------------------------------------------------------------------------
Total
equity
---------------------------------------------------------------------------------------------------------------------------------------------------
Share-based Restated* attributable to Non- Total
---------------------------------------------------------------------------------------------------------------------------------------------------
Share Revaluation payment Total Accumulated equity holders controlling
shareholders
---------------------------------------------------------------------------------------------------------------------------------------------------
capital reserve reserve reserves loss of the parent interest equity
---------------------------------------------------------------------------------------------------------------------------------------------------
R R R R R R R R
---------------------------------------------------------------------------------------------------------------------------------------------------
Balance at 1 March 2011 374 029 488 2 055 747 27 932 584 29 988 331 (96 199 385) 307 818 434 161 759 674
469 578 108
---------------------------------------------------------------------------------------------------------------------------------------------------
Changes in equity
---------------------------------------------------------------------------------------------------------------------------------------------------
(Loss)/Profit for the period - - - - (100 121 875) (100 121 875) 1 719 500 (98 402 375)
---------------------------------------------------------------------------------------------------------------------------------------------------
Total comprehensive (loss)/income for the period - - - (100 121 875) (100 121 875) 1 719 500 (98 402 375)
---------------------------------------------------------------------------------------------------------------------------------------------------
Issue of shares 94 350 340 - - - - 94 350 340 - 94 350 340
---------------------------------------------------------------------------------------------------------------------------------------------------
Share options issued - - 8 891 216 8 891 216 - 8 891 216 - 8 891 216
---------------------------------------------------------------------------------------------------------------------------------------------------
Total changes 94 350 340 - 8 891 216 8 891 216 (100 121 875) 3 119 681 1 719 500 4 839 181
---------------------------------------------------------------------------------------------------------------------------------------------------
Balance at 1 September 2011 468 379 828 2 055 747 36 823 800 38 879 547 (196 321 260) 310 938 115 163 479
174 474 417 289
---------------------------------------------------------------------------------------------------------------------------------------------------
Changes in equity
---------------------------------------------------------------------------------------------------------------------------------------------------
Profit for the period - - - - 4 615 451 4 615 451 4 053 707 8 669 158
---------------------------------------------------------------------------------------------------------------------------------------------------
Other comprehensive loss for the period - (244 800) - (244 800) - (244 800) - (244 800)
---------------------------------------------------------------------------------------------------------------------------------------------------
Total comprehensive (loss)/income for the period - (244 300) - (244 800) 4 615 451 4 370 651 4 053 707 8
424 358
---------------------------------------------------------------------------------------------------------------------------------------------------
Issue of shares 17 804 595 - - - - 17 804 595 - 17 804 595
---------------------------------------------------------------------------------------------------------------------------------------------------
Share options lapsed - - (8 891 216) (8 891 216) 8 891 216 - - -
---------------------------------------------------------------------------------------------------------------------------------------------------
Dividends paid to non-controlling interest - - - - - - (51 801 149) (51 801 149)
---------------------------------------------------------------------------------------------------------------------------------------------------
Total changes 17 804 595 (244 800) (8 891 216) (9 136 016) 13 506 667 22 175 246 (47 747 442) (25 572 196)
---------------------------------------------------------------------------------------------------------------------------------------------------
Balance at 29 February 2012 486 184 423 1 810 947 27 932 584 29 743 531 (182 814 593) 333 113 361 115 731
732 448 845 093
---------------------------------------------------------------------------------------------------------------------------------------------------
Changes in equity
---------------------------------------------------------------------------------------------------------------------------------------------------
Loss for the period - - - - (12 647 013) (12 647 013) (2 459 599) (15 106 612)
---------------------------------------------------------------------------------------------------------------------------------------------------
Total comprehensive loss for the period - - - - (12 647 013) (12 647 013) (2 459 599) (15 106 612)
---------------------------------------------------------------------------------------------------------------------------------------------------
Issue of shares 36 771 700 - - - - 36 771 700 - 36 771 700
---------------------------------------------------------------------------------------------------------------------------------------------------
Dividends paid to non-controlling interest - - - - - - (24 573 794) (24 573 794)
---------------------------------------------------------------------------------------------------------------------------------------------------
Acquisition of additional interest in subsidiary - - - - 24 693 273 24 693 273 (49 267 068) (24 573 795)
---------------------------------------------------------------------------------------------------------------------------------------------------
Total changes 36 771 700 - - - 12 046 260 48 817 960 (76 300 461) (27 482 501)
---------------------------------------------------------------------------------------------------------------------------------------------------
Balance at 31 August 2012 522 956 123 1 810 947 27 932 584 29 743 531 (170 768 333) 381 931 321 39 431 271
421 362 592
---------------------------------------------------------------------------------------------------------------------------------------------------
*Refer to note 16 for details relating to the restatement.
---------------------------------------------------------------------------------------------------------------------------------------------------
Notes to the condensed Group interim financial statements
Six months ended 31 August 2012
1. Basis of preparation and presentation of financial
information
The consolidated condensed interim financial statements,
comprised of SacOil Holdings Limited and its
subsidiaries (together "the Group"), for the six months ended 31
August 2012, have been prepared in accordance
with the recognition and measurement criteria of International
Financial Reporting Standards ("IFRS") as issued
by the International Accounting Standards Board (IASB), the
preparation and disclosure requirements of IAS 34 -
Interim Financial Reporting, the AC500 Standards as issued by
the Accounting Practices Board or its successor,
the Listings Requirements of the JSE Limited and in the manner
required by the South African Companies
Act, No 71 2008. Accordingly, certain information and footnote
disclosures normally included in annual financial
statements prepared in accordance with International Financial
Reporting Standards ("IFRS"), as issued by the
IASB, have been omitted or condensed as is normal practice.
Principal accounting policies
The same accounting policies, presentation and methods of
computation have been followed in these condensed
Group interim financial statements as those applied in the
preparation of the Group's annual financial statements
for the year ended 29 February 2012. These condensed interim
financial statements should be read in conjunction
with the Group's consolidated financial statements for the year
ended 29 February 2012.
Review report
The interim results for the six months ended 31 August 2012 have
been reviewed by Ernst & Young Inc. A copy
of the auditors' unqualified review opinion is available for
inspection at the registered office of the Company. The
unqualified review report includes an "Other regulatory matters"
paragraph with respect to a reportable irregularity
reported to the Independent Regulatory Board for Auditors in
terms of section 45 of the Auditing Profession Act.
The background is described in note 16.
These condensed Group interim financial statements have been
prepared under the supervision of CEO Robin
Vela (Chartered Accountant).
Notes to oil and gas disclosure
In accordance with AIM Guidelines, Bradley Cerff, is the
qualified person that has reviewed the technical
information contained in this news release. Bradley has over 16
years experience in the oil and gas industry with
a Masters degree in Science and Business Administration focused
on Foreign Direct Investment in the African oil
and gas industry. He is also a member of the Society of
Petroleum Engineers.
2. Other income
Restated
-------------------------------------------------------------------------------------------------------------
Six months to Six months to
-------------------------------------------------------------------------------------------------------------
31 August 31 August
-------------------------------------------------------------------------------------------------------------
2012 2011
-------------------------------------------------------------------------------------------------------------
R R
-------------------------------------------------------------------------------------------------------------
Profit/(Loss) on sale of exploration and evaluation assets 40 926 877 (83
446 480)
-------------------------------------------------------------------------------------------------------------
(Losses)/Gains on remeasurement of financial assets (31 621 739) 219 138 297
-------------------------------------------------------------------------------------------------------------
Foreign exchange gains 38 945 883 3 306 381
-------------------------------------------------------------------------------------------------------------
Consulting fee 6 962 621 -
-------------------------------------------------------------------------------------------------------------
55 213 642 138 998 198
-------------------------------------------------------------------------------------------------------------
The sale of exploration and evaluation assets comprised the sale
by Semliki of a 60% interest in Block III in the
prior period and a further 6.66% interest in the current
period.
Foreign currency gains arose primarily on US$-based loans to EER
and the US$10million cash collateral held by
Ecobank as security for the Performance Bond on OPL 233.
3. Other operating costs
-------------------------------------------------------------------------------------------------------------
Impairment of property, plant and equipment (note 12) (1 456 572) -
-------------------------------------------------------------------------------------------------------------
Corporate costs (3 012 342) (5 012 243)
-------------------------------------------------------------------------------------------------------------
Employment costs (including directors remuneration) (6 251 827) (24 612 348)
-------------------------------------------------------------------------------------------------------------
Auditors remuneration (2 315 189) (250 000)
-------------------------------------------------------------------------------------------------------------
Accounting fees (388 375) (25 600)
-------------------------------------------------------------------------------------------------------------
Consultancy fees (2 109 224) (2 795 293)
-------------------------------------------------------------------------------------------------------------
Legal fees (2 373 166) (2 137 514)
-------------------------------------------------------------------------------------------------------------
Travel and accommodation (1 793 602) (956 961)
-------------------------------------------------------------------------------------------------------------
Depreciation (373 271) (498 583)
-------------------------------------------------------------------------------------------------------------
Rentals (492 313) (210 681)
-------------------------------------------------------------------------------------------------------------
Marketing (486 125) (823 555)
-------------------------------------------------------------------------------------------------------------
Broker fees (838 488) (33 746)
-------------------------------------------------------------------------------------------------------------
Other (1 308 333) (341 198)
-------------------------------------------------------------------------------------------------------------
(23 198 827) (37 697 722)
-------------------------------------------------------------------------------------------------------------
4. Investment income
-------------------------------------------------------------------------------------------------------------
Interest receivable - loans 18 904 637 5 823 144
-------------------------------------------------------------------------------------------------------------
Interest received - cash and cash equivalents 354 795 300 077
-------------------------------------------------------------------------------------------------------------
Imputed interest on financial assets 7 943 905 606 033
-------------------------------------------------------------------------------------------------------------
27 203 337 6 729 254
-------------------------------------------------------------------------------------------------------------
5. Finance costs
-------------------------------------------------------------------------------------------------------------
Debt facility/capital raising fees (18 484 575) -
-------------------------------------------------------------------------------------------------------------
Interest paid to financial institutions (3 032 592) (2 031 756)
-------------------------------------------------------------------------------------------------------------
(21 517 167) (2 031 756)
-------------------------------------------------------------------------------------------------------------
6. Taxation
-------------------------------------------------------------------------------------------------------------
Current tax:
-------------------------------------------------------------------------------------------------------------
- Capital gains tax (26 849 411) (40 990 200)
-------------------------------------------------------------------------------------------------------------
- Foreign income tax (4 914 759) (10 247 550)
-------------------------------------------------------------------------------------------------------------
- Foreign estimated penalties (18 445 590) (10 247 550)
-------------------------------------------------------------------------------------------------------------
(50 209 760) (61 485 300)
-------------------------------------------------------------------------------------------------------------
Deferred tax:
-------------------------------------------------------------------------------------------------------------
- Arising from the sale of exploration and evaluation assets 2 137 244 (94
057 385)
-------------------------------------------------------------------------------------------------------------
- Arising from the recognition of the Total cost carry in Semliki (3 320 453)
-
-------------------------------------------------------------------------------------------------------------
(1 183 209) (94 057 385)
-------------------------------------------------------------------------------------------------------------
Taxation for the period (51 392 969) (155 542 685)
-------------------------------------------------------------------------------------------------------------
7. Loss per share
-------------------------------------------------------------------------------------------------------------
Basic and diluted loss per share
-------------------------------------------------------------------------------------------------------------
Basic loss per share (cents) (1.64) (14.71)
-------------------------------------------------------------------------------------------------------------
Diluted loss per share (cents) (1.64) (14.46)
-------------------------------------------------------------------------------------------------------------
Basic and diluted loss per share from continuing operations
-------------------------------------------------------------------------------------------------------------
Basic loss per share (cents) (1.46) (15.01)
-------------------------------------------------------------------------------------------------------------
Diluted loss per share (cents) (1.45) (14.75)
-------------------------------------------------------------------------------------------------------------
Loss used to calculate basic and diluted loss per share from continuing
-------------------------------------------------------------------------------------------------------------
operations (11 232 385) (102 149 652)
-------------------------------------------------------------------------------------------------------------
(Loss)/Profit from discontinued operations (1 414 628) 2 027 777
-------------------------------------------------------------------------------------------------------------
Loss used to calculate basic and diluted loss per share from
-------------------------------------------------------------------------------------------------------------
all operations (12 647 013) (100 121 875)
-------------------------------------------------------------------------------------------------------------
Weighted average number of ordinary shares used in the calculation
-------------------------------------------------------------------------------------------------------------
of basic loss per share 771 061 757 680 555 152
-------------------------------------------------------------------------------------------------------------
Effect of dilutive potential ordinary shares 1 350 251 12 059 214
-------------------------------------------------------------------------------------------------------------
Weighted average number of ordinary shares used in the calculation
-------------------------------------------------------------------------------------------------------------
of diluted loss per share 772 412 008 692 614 366
-------------------------------------------------------------------------------------------------------------
Headline loss per share
-------------------------------------------------------------------------------------------------------------
Headline loss per share (cents) (2.63) (5.12)
-------------------------------------------------------------------------------------------------------------
Diluted headline loss per share (cents) (2.62) (5.03)
-------------------------------------------------------------------------------------------------------------
Headline loss reconciliation:
-------------------------------------------------------------------------------------------------------------
Loss for the period from all operations (12 647 013) (100 121 875)
-------------------------------------------------------------------------------------------------------------
Adjusted for:
-------------------------------------------------------------------------------------------------------------
Impairment of property, plant and equipment 1 456 572 -
-------------------------------------------------------------------------------------------------------------
(Profit)/loss on sale of exploration and evaluation assets attributable to
-------------------------------------------------------------------------------------------------------------
equity holders of the parent (9 060 997) 65 254 812
-------------------------------------------------------------------------------------------------------------
Headline loss (20 251 438) (34 867 063)
-------------------------------------------------------------------------------------------------------------
8. Exploration and evaluation assets
------------------------------------------------------------------------------------------
At 29 At 31
------------------------------------------------------------------------------------------
February 2012 Additions Adjustments Disposals August 2012
------------------------------------------------------------------------------------------
Block III DRC 130 321 123 5 380 820 (13 908 618) (31 025 595) 90 767 730
------------------------------------------------------------------------------------------
OPL281 Nigeria 47 712 172 - (3 639 250) - 44 072 922
------------------------------------------------------------------------------------------
OPL233 Nigeria 3 962 528 - (3 081 896) - 880 632
------------------------------------------------------------------------------------------
181 995 823 5 380 820 (20 629 764) (31 025 595) 135 721 284
------------------------------------------------------------------------------------------
The farm-in agreement between Semliki and Total provides for a
carry of costs, payable by Total, on behalf of
Semliki. Under the terms of this contract, Total shall be
entitled to recover the accrued aggregate of the carried
costs from Semliki's share of future profits. This arrangement
has been considered a secured borrowing in which
the underlying asset is used as collateral. Semliki has
therefore increased the Block III exploration and evaluation
asset with the carried costs as incurred by Total up to the
reporting date by an amount of R5.4 million, together
with a corresponding financial liability representing the amount
owed to Total. A corresponding deferred tax asset
in an amount of R2.2 million was recognised in profit and loss.
The March 2012 disposal of the 6.66% interest in
Block III resulted in the derecognition of R31.0 million of
exploration and evaluation assets.
As at 29 February 2012 the Total cost carry had been estimated
at R28.9 million. Due to the availability of
additional information the cost carry was re-estimated to R15.0
million in the current period resulting in the
reversal of capitalised costs amounting to R13.9 million. In
addition, costs associated with the OPL 233 and
OPL 281 assets were revised in the current period resulting in
the reversal of capitalised costs amounting to
R8.1 million.
9. Other financial assets
-------------------------------------------------------------------------------------------------------
31 August 29 February
-------------------------------------------------------------------------------------------------------
2012 2012
-------------------------------------------------------------------------------------------------------
R R
-------------------------------------------------------------------------------------------------------
Contingent consideration 257 917 042 263 260 148
-------------------------------------------------------------------------------------------------------
Loan due from DIG - 1 929 982
-------------------------------------------------------------------------------------------------------
Loan due from EER 78 912 078 66 240 733
-------------------------------------------------------------------------------------------------------
336 829 120 331 430 863
-------------------------------------------------------------------------------------------------------
The EER loan in relation to the carrying of EER's farm in fees is secured
by a corporate guarantee from EER.
-------------------------------------------------------------------------------------------------------
10. Trade and other receivables
-------------------------------------------------------------------------------------------------------
Trade receivables 51 033 3 646 478
-------------------------------------------------------------------------------------------------------
Loan due from EER 93 728 716 -
-------------------------------------------------------------------------------------------------------
Loan due from DIG 22 451 501 -
-------------------------------------------------------------------------------------------------------
Advance against asset negotiation rights 75 490 000 75 490 000
-------------------------------------------------------------------------------------------------------
Value-added tax 138 036 1 611 041
-------------------------------------------------------------------------------------------------------
Other receivables 3 917 619 4 471 525
-------------------------------------------------------------------------------------------------------
195 776 905 85 219 044
-------------------------------------------------------------------------------------------------------
EER is obliged to repay SacOil on or before 15 December 2012 its
50% share of interest and costs associated
with the cash collateral and the posting of the US$25 million
performance bond. A receivable of R93.7 million
(February 2012: nil) is included in trade and other receivables
in this regard. The EER loan in relation to the
performance bond is secured by a cession and pledge over EER's
shares in EER 233 Nigeria which owns a 20%
interest in OPL233.
SacOil also entered into a tax indemnity agreement with DIG
following the sale of the 6.66% interest in Block III,
whereby DIG is liable for all taxes arising from the disposal.
The loan due from DIG represents capital gains tax
recoverable from DIG under the terms of this agreement.
An advance payment of R75.5 million (February 2012: R75.5
million) was made by SacOil in relation to an
agreement whereby SacOil would be granted an exclusive right to
negotiate a potential acquisition of certain
material oil and gas concessions. Commercial negotiations have
taken place with all material
stakeholders in relation to the potential transaction, however
these have not, so far, resulted in the Company
securing any interest in the concessions or exclusive right to
negotiate for such interests. While discussions
with all relevant parties are ongoing, the Board recognises that
these discussions may not lead to the Company
acquiring interests in the target concessions. The Company is
reviewing its options to seek recourse from third
parties in respect of this advanced payment. The risk that
SacOil may not be able to recover all or part of the
advanced payment therefore remains.
11. Cash and cash equivalents
------------------------------------------------------------------
Cash and cash equivalents consist of:
------------------------------------------------------------------
31 August 29 February
------------------------------------------------------------------
2012 2012
------------------------------------------------------------------
R R
------------------------------------------------------------------
Bank balances 10 278 565 3 137 098
------------------------------------------------------------------
Short-term deposits 203 628 7 637 200
------------------------------------------------------------------
10 482 193 10 774 298
------------------------------------------------------------------
Restricted cash 84 636 087 -
------------------------------------------------------------------
95 118 280 10 774 298
------------------------------------------------------------------
Restricted cash comprises the cash collateral of US$10 million
(August 2012: R84.6 million, February 2012: nil)
paid to Ecobank to secure the Performance Bond for OPL233. This
cash is held in the bank account of SacOil's
wholly owned subsidiary, SacOil 233 Nigeria Limited. The
remainder of the Performance Bond is secured by a
first ranking legal charge over SacOil's investment in SacOil
233 Nigeria Limited.
12. Assets held for sale
Assets and liabilities in this category relate to the Greenhills
Plant which has been successfully disposed of as at
the date of this interim report:
31 August 2012
--------------------------------------------------------------------------------------------------------------------
Greenhills Plant Assets
--------------------------------------------------------------------------------------------------------------------
Property, plant and equipment 3 924 246
--------------------------------------------------------------------------------------------------------------------
Inventories 2 788 609
--------------------------------------------------------------------------------------------------------------------
Trade receivables 2 425 598
--------------------------------------------------------------------------------------------------------------------
9 138 453
--------------------------------------------------------------------------------------------------------------------
Greenhills Plant Liabilities
--------------------------------------------------------------------------------------------------------------------
Trade creditors 3 015 977
--------------------------------------------------------------------------------------------------------------------
Provision for decommissioning 1 125 972
--------------------------------------------------------------------------------------------------------------------
4 141 949
--------------------------------------------------------------------------------------------------------------------
Net assets held for sale 4 996 504
--------------------------------------------------------------------------------------------------------------------
(Loss)/Profit from discontinued operations:
--------------------------------------------------------------------------------------------------------------------
31 August 31 August 29 February
--------------------------------------------------------------------------------------------------------------------
2012 2011 2012
--------------------------------------------------------------------------------------------------------------------
Revenue 9 113 711 19 273 596 37 172 586
--------------------------------------------------------------------------------------------------------------------
Cost of sales (7 328 296) (13 572 065) (26 569 161)
--------------------------------------------------------------------------------------------------------------------
Gross profit 1 785 415 5 701 531 10 603 425
--------------------------------------------------------------------------------------------------------------------
Salaries and wages (2 356 295) (3 020 744) (5 144 207)
--------------------------------------------------------------------------------------------------------------------
Other operating costs (843 748) (653 010) (3 640 090)
--------------------------------------------------------------------------------------------------------------------
(Loss)/Profit from discontinued operations (1 414 628) 2 027 777 1 819 128
--------------------------------------------------------------------------------------------------------------------
Earnings per share:
--------------------------------------------------------------------------------------------------------------------
Basic (loss)/earnings per share from discontinued
--------------------------------------------------------------------------------------------------------------------
operations (cents) (0.18) 0.30 0.25
--------------------------------------------------------------------------------------------------------------------
Diluted (loss)/earnings per share from discontinued
--------------------------------------------------------------------------------------------------------------------
operations (cents) (0.18) 0.29 0.25
--------------------------------------------------------------------------------------------------------------------
Immediately before the classification of the Greenhills Plant as
an asset held for sale, an impairment loss of
R1.5 million was recognised to reduce the carrying amount of the
assets in the disposal group to the fair value
less costs to sell. This was recognised in the statement of
comprehensive income under other operating costs.
13. Stated capital
SacOil issued the following ordinary shares during the period
under review:
Nature of Number of Stated
---------------------------------------------------------------------------------------------------------------
Issued to issue shares capital
---------------------------------------------------------------------------------------------------------------
Balance as at 1 March 2012 832 225 699 486 184 423
---------------------------------------------------------------------------------------------------------------
Friday, March 23, 2012 Yorkville Advisors Specific issue 29 328 257 12 628 000
---------------------------------------------------------------------------------------------------------------
Friday, May 04, 2012 Yorkville Advisors Specific issue 32 135 560 15 815 400
---------------------------------------------------------------------------------------------------------------
Monday, July 09, 2012 Yorkville Advisors Specific issue 24 578 863 8 328 300
---------------------------------------------------------------------------------------------------------------
Balance as at 31 August 2012 918 268 379 522 956 123
---------------------------------------------------------------------------------------------------------------
14. Other financial liabilities
---------------------------------------------------------------------------------------------------------------
31 August 29 February
---------------------------------------------------------------------------------------------------------------
2012 2012
---------------------------------------------------------------------------------------------------------------
R R
---------------------------------------------------------------------------------------------------------------
Renaissance BJM Securities (Proprietary) Limited ("Rencap") 84 348 210 -
---------------------------------------------------------------------------------------------------------------
Energy Equity Resources ("EER") 42 166 500 -
---------------------------------------------------------------------------------------------------------------
Yorkville Advisors LLP ("Yorkville") 21 868 205 12 496 195
---------------------------------------------------------------------------------------------------------------
148 382 915 12 496 195
---------------------------------------------------------------------------------------------------------------
The Rencap loan was raised to part fund the US$10 million cash
collateral requirement for posting the
Performance Bond on OPL 233. The Rencap loan is secured by
SacOil's shares in its subsidiary RDK Mining
which owns a 68% interest in Semliki Energy SPRL, the holder of
an 18.34% interest in Block III. Refer to note
18.4 for further details on the Rencap loan.
The EER liability relates to EER's share of the US$10 million
cash collateral held in the bank account of SacOil's
wholly owned subsidiary, SacOil 233 Nigeria Limited as disclosed
in notes 10 and 11. There are no repayment
terms for this US$5 million as it will be utilised to fund the
work programme on OPL 233.
The Yorkville loan was raised to part fund the US$10 million
cash collateral requirement for posting the
Performance Bond on OPL 233. As disclosed in note 18.1, this
loan was settled post period-end. The Yorkville
loan is unsecured.
15. Operating segments
The business segment represented by the manganese processing and
sales from the Greenhills Plant has been
reclassified as a discontinued operation following the agreement
for its sale on 15 October 2012. Consequently
the Group's only business segment as well as the primary
reporting segment for the period under review is oil
and gas exploration.
16. Prior period adjustments/Reportable irregularity
16.1 Prior period adjustments
Block III acquisition
During the period ended 31 August 2011, whilst the Group
correctly recognised the impact of the cash
proceeds, together with a receivable associated with the
contingent bonuses receivable from Total on the
farm-out of 60% of the legal and beneficial participating
interest of Block III, the value of the receivable,
as well as the tax and interest impact of these amounts were not
currently recognised. The withholding
taxes and penalties on the dividend distribution were also not
accounted for. The impact of this on the
interim results is as follows:
As previously Restated
-----------------------------------------------------------------------------------------------------
reported Adjustments 31 August 2011
-----------------------------------------------------------------------------------------------------
Impact on the statement of
-----------------------------------------------------------------------------------------------------
comprehensive income:
-----------------------------------------------------------------------------------------------------
Increase in other income 101 613 144 37 385 054 138 998 198
-----------------------------------------------------------------------------------------------------
Increase in investment income 6 123 221 606 033 6 729 254
-----------------------------------------------------------------------------------------------------
Increase in taxation - (155 542 685) (155 542 685)
-----------------------------------------------------------------------------------------------------
Decrease in profit 19 149 224 (117 551 599) (98 402 375)
-----------------------------------------------------------------------------------------------------
Decrease in headline earnings 38 712 521 (73 579 584) (34 867 063)
-----------------------------------------------------------------------------------------------------
Basic loss per share (cents) (4.57) (8.64) (14.71)
-----------------------------------------------------------------------------------------------------
Diluted loss per share (cents) (4.49) (8.49) (14.46)
-----------------------------------------------------------------------------------------------------
Headline profit/(loss) per share (cents) 5.69 (10.81) (5.12)
-----------------------------------------------------------------------------------------------------
Diluted headline profit/(loss) per share (cents) 5.59 (10.62) (5.03)
-----------------------------------------------------------------------------------------------------
Impact on the statement of financial
-----------------------------------------------------------------------------------------------------
position:
-----------------------------------------------------------------------------------------------------
Decrease in other financial assets 291 002 593 (2 999 113) 288 003 480
-----------------------------------------------------------------------------------------------------
Increase in deferred tax liability - 94 054 385 94 054 385
-----------------------------------------------------------------------------------------------------
Increase in current taxation payable - 20 495 100 20 495 100
-----------------------------------------------------------------------------------------------------
Decrease in equity 591 968 888 (117 551 599) 474 417 289
-----------------------------------------------------------------------------------------------------
The impact was correctly accounted for at 29 February 2012. As
the adjustment relates to items initially
recognised in the prior period, no third statement of financial
position has been presented, nor is this
required in terms of IAS 34 Interim Financial Reporting.
16.2 Reportable irregularity
During the current period the Directors discovered prior period
errors (refer to note 16.1) which resulted
in a prior period restatement relating to the 31 August 2011
interim results. The Group's auditors have
reported this matter to the Independent Regulatory Board for
Auditors as a reportable irregularity in terms
of S45 of the Auditing Professions Act.
17. Dividends
The Board has resolved not to declare any dividends to
shareholders for the period under review, choosing to
retain cash for working capital and project development
requirements.
18. Events after the reporting period
The following events took place from the period 1 September 2012
to the date of this interim report.
18.1 Repayment of Yorkville Advisors loan
As announced on 1 November 2012, SacOil settled the remaining
indebtedness to Yorkville Advisors
("YA") by making a cash payment of US$1.0 million and issuing 35
072 412 new SacOil ordinary
shares ("Shares") to YA at a price of R0.32 per Share (the
"Issue"), raising R11.2 million (approximately
US$1.2 million). The Issue is in line with the terms of a
Standby Equity Distribution Agreement between
YA and SacOil which was approved by SacOil shareholders in a
general meeting on 17 November 2011.
18.2 Partial loan repayment by EER
On 22 October 2012, SacOil received US$3.0 million from EER as
part repayment of the cash collateral
contribution owed to SacOil by EER.
18.3 Disposal of the Greenhills Plant
The disposal of the plant was finalised on 15 October 2012 with
an effective date of 17 September 2012.
The plant was sold to management and employees of the plant on
an "as is" and vendor financed basis,
for R7 million payable as follows:
1 October 2013 R 1 000 000
-------------------------------------
1 October 2014 R 2 000 000
-------------------------------------
1 October 2015 R 2 000 000
-------------------------------------
1 October 2016 R 2 000 000
-------------------------------------
Assets and liabilities attributable to the Plant are disclosed
in note 12.
18.4 Renaissance BJM Securities (Proprietary) Limited ("Rencap")
loan
The loan due to Rencap as disclosed in note 14 was due for
repayment on 10 October 2012. The terms
of the loan were renegotiated to facilitate an extension in
repayment dates from 10 October 2012 to
30 November 2012. In addition, Rencap were granted options to
acquire up to 20 000 000 SacOil Shares
at a price equivalent to a 10% discount on the 30-day volume
weighted average price per SacOil Share
at the time of exercise. Such options expire on 30 November
2012.
18.5 Gairloch Limited ("Gairloch") loan
On 10 September 2012 SacOil obtained an unsecured convertible
loan of US$1 million from Gairloch
to fulfil the Group's financing obligations relating to its
assets. The term of the loan is 180 days at an
interest rate of 8% per month. The loan will be repaid through
cash or equity-settlement. If equity settled,
the pricing of equity will be at the 30-day volume weighted
average price of a SacOil Share at the time
of conversion.
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" or "the Group")
Directors: Richard John Linnell** (Chairman), Robin Vela (Chief
Executive Officer), John Bentley**
Colin Bird*, James William Guest**, Gontse Moseneke*
*Non-executive director **Independent Non-executive directors
Corporate information
Registered office and physical address: 2nd Floor, The Gabba,
Dimension Data Campus,
57 Sloane Street, Bryanston, 2021
Postal address: PostNet Suite 211, Private Bag X75, Bryanston,
2021
Contact details: Tel: +27 (0) 11 575 7232 Fax: +27 (0) 11 576
2258
Email: info@sacoilholdings.com Website: www.sacoilholdings.com
Advisers
----------------------------------------------------------------------
Company Secretary Fusion Corporate Secretarial Services (Proprietary)
Limited
----------------------------------------------------------------------
Transfer Secretaries South Africa Link Market Services South Africa
(Proprietary) Limited
----------------------------------------------------------------------
Transfer Secretaries United Kingdom Computershare Investor Services
(Jersey) Limited
----------------------------------------------------------------------
Corporate Legal Advisers Norton Rose South Africa
----------------------------------------------------------------------
Auditors Ernst & Young Inc
----------------------------------------------------------------------
JSE Sponsor Nedbank Capital
----------------------------------------------------------------------
AIM Nominated Adviser finnCap Limited
----------------------------------------------------------------------
www.sacoilholdings.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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