SACOIL’S MAKES SIGNIFICANT PROGRESS WITH RESTRUCTURING ACTIONS
Acquisition of a producing asset in Egypt
• Portfolio rationalisation
• Restructuring of EERNL loans
• Strong cash balance
• Repositioned for sustainable growth
SacOil Holdings Limited (“SacOil” or the “Company”) announced its annual results for the year ended 28 February 2015 and outlined the Company’s strategy to focus on proven resources as a basis for growth. To that end, the Company has embarked on a process of balancing and rationalising its portfolio of assets during the year. The aim of the rationalisation is to restructure the Company’s future capital requirements – focusing on cash generative assets and low risk exploration assets.
Dr Thabo Kgogo, CEO of SacOil, commented, “The changes implemented in the business over the last year were critical to position the business for sustainable growth in the future. We have a renewed strategy which will see our portfolio of assets being effectively balanced with much increased exposure to income producing resources. I am very pleased with the progress we have made in the last year and our focus remains to continue on the same path.”
The Company continues to focus on developing its existing assets, especially the developing activities which will further enhance production and the recovery of oil at its 100% owned Lagia oil field in Sinai, onshore Egypt. The Company is also progressing discussions with engineering companies for the planned gas processing facilities and pipeline studies in Mozambique.
“We see SacOil’s new strategy driving increased shareholder value in the near term, with Lagia development activities progressing well to achieve our target of 1 000 barrels by Q4 2015.
Given the critical energy demand issues in South Africa and southern Africa, our development activities in Mozambique also offer us an opportunity to participate in the extended value chain in the country which has large gas reserves, ” commented Dr Kgogo.
On 9 April the Group announced it has entered into a loan settlement agreement with Energy Equity Resources Norway Limited (EERNL) in relation to the appraisal assets in Nigeria.
“Another positive move toward this this year has been the restructuring of the EERNL debt obligation and thus enhancing our ability to recover the sums owed to the Company and its shareholders,” added Dr Kgogo.
The Group reported a loss of R277.0 million (2014: profit of R9.5 million), and headline loss per share of 4.67 cents (2014: headline earnings per share of 1.37 cents), for the year ended 28 February 2015.
The portfolio rationalisation undertaken by the Group also had the effect of eliminating onerous future commitments on OPL 233 and OPL 281 and resulted in the improvement in the Group’s projected future cash flows consequently addressing the legacy going concern issue.
“The losses we incurred are almost entirely due to the restructuring actions taken in the last year. Notwithstanding these losses we have a cash balance of R229.4 million to support the implementation of the plan to pursue more opportunities on the African continent.
“We have the benefit from having an experienced team to move the Company forward SacOil.” concluded Dr Kgogo.