SacOil Holdings has terminated its participation with Transnational Corporation of Nigeria (Transcorp), the operator of Nigerian Oil Prospecting Licence (OPL) 281.
It paid $12.5m towards farm-in fees on 28 February 2011, which contractually will be refunded with interest by Transcorp. In addition, SacOil will not have any future commitments and obligations associated with the appraisal of OPL 281.
As reported in its recent financial statements, the farm-in fee to Transcorp and the transaction fee payable to Energy Equity Resources Norway of $12m, $2.5m respectively will not be due and payable.
Dr Thabo Kgogo, CEO of SacOil, commented,
“The objective of the rationalisation and termination of the OPL 281 contract with Transcorp is to restructure the company’s capital needs, reduce future financial exposure and focus on cash generative assets.
“We are focused on increasing production in our low cost onshore asset in Egypt while we assess additional options for increasing value for our shareholders.”
The company said that this announcement has been made in compliance with JSE Listings Requirement 3.9. under which as issuer who has published a cautionary announcement must provide updates thereon in the required manner and within the time limits prescribed.
With reference to the cautionary announcements, the last of which was published on 16 March 2015 on the Stock Exchange News Service of the JSE and on the Regulatory News Service of the London Stock Exchange, SacOil shareholders are advised that, in line with SacOil’s strategy to focus on proven resources as a basis for growth, the company has embarked on a process of balancing and rationalising its portfolio of assets. The aim of the rationalisation is to restructure the company’s future capital requirements and focus on cash generative assets and low risk exploration assets.
The action in terminating the the OPL 281 contract is pursuant to the above strategy. Accordingly, shareholders have been advised that caution is no longer required to be exercised when dealing in the company’s securities.
