SacOil Operations Update
10 Apr 2013
SACOIL HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1993/000460/06)
JSE share code: SCL AIM share code: SAC
(“SacOil” or “the Company”)
SACOIL OPERATIONS UPDATE
SacOil, the independent African oil and gas company, is pleased to provide the market with the following update on the Company’s on-going operational activities.
- Malawi, Block 1: Planning of environmental and social impact assessment
- Democratic Republic of the Congo (“DRC”), Block III: 2D seismic data planning and acquisition
- Nigeria, OPL 233: Approval of 2013 Work Program and Budget; re-interpretation of seismic and well data
- Nigeria, OPL 281: Expected release of PSC and re-interpretation of seismic and well data
Malawi, Block 1: Planning of environmental and social impact assessment
Following the award of Block 1, in December 2012, first operations have commenced, with the initial planning associated with the environmental and social impact assessment underway. In consultation with Malawian government, SacOil is currently targeting to have this work programme complete by Q2 2014. As previously outlined, the term of the exploration license is an initial four year period, followed by two subsequent three year renewal periods.
SacOil was awarded a 100% interest and operator status in Block 1, an onshore petroleum prospecting license in Malawi. At 12,265 square kilometres, Block 1 is the second largest petroleum exploration license demarcated in Malawi.
Block 1 is located in the North Western part of Malawi bordering Tanzania to the north and Zambia to the west. The licence is located on trend with the East African rift system which is a proven exploration province with prolific oil discoveries in Sudan, Chad, Kenya and Uganda. Through initial work completed, the SacOil technical team anticipates that the same Tertiary rift system will be present in Malawi.
DRC, Block III: 2D seismic data planning and acquisition
As previously announced, Total E&P RDC (“Total”) successfully acquired an airborne gravity and magnetic survey over the northern part of Block III outside the Virunga National Park.
Processing and interpretation of the data has now been completed and confirms the expected geological trend observed in the area. SacOil’s interpretation and geological model suggests the existence of a north-west to south-east trending basin, whilst the horst and graben structure as well as quality and thickness of the sedimentary infill will need to be confirmed with seismic data. The orientation of this modeled basin is believed to be on trend with the basin orientation where the large discoveries have been made in the Albertine Graben by other operators.
With this positive geological information, planning for the acquisition of a 2D seismic survey to map potential oil and gas prospects has begun. The current design envisages that at a minimum of 400 km of 2D seismic data will be acquired during the next dry season, which starts December 2013.
The operator is currently active in Block III, with environmental and societal personnel on the ground to finalise the data acquisition and to complete the environmental and social impact report for submission to the DRC authorities. Total’s technical team is currently working with three bidders to optimise the 2D seismic acquisition design according to the local topography. There has been a delay of approximately six months to the planned work program, as a result of civil unrest in the area. Taking into account these delays, the JV requested an extension from the DRC government to the license, and in December 2012 the Block III license was extended by one year with the license expiring in the January 2016. With the situation on the ground now stabilised, it is anticipated that the seismic acquisition will take place within the next dry season, December 2013.
Nigeria, OPL 233: Approval of 2013 Work Program and Budget, Re-interpretation of seismic and well data
In February 2013 the Nigerian National Petroleum Corporation (“NNPC”) approved the OPL 233 work program and budget for 2013. The approved work program includes the acquisition and processing of a 100 square kilometers of 3D Ocean Bottom Cable (OBC) seismic survey to be acquired over the block and the drilling of an exploration well.
A site survey has been successfully completed by a seismic contractor and the final report is being compiled. Following the receipt of the site survey report, the seismic acquisition design parameters will be finalised and the OBC seismic survey is expected to be acquired during the next dry season in Q3 2013. The survey will enable the optimum placement of a well to appraise the Olobia-1 oil discovery on the Block and for SacOil to develop an understanding of the blocks prospectivity.
In addition, SacOil is in the process of reviewing the existing seismic data in more detail and on completion will update its internal evaluation of the OPL 233 resources. It has also, sourced additional 3D data on the south-western portion of the concession, which will assist in the identification of a number of additional leads and prospects for subsequent further evaluation of the block.
Nigeria, OPL 281: Expected release of PSC and re-interpretation of seismic and well data
SacOil is awaiting the outcome of final discussions between the NNPC and Transcorp relating to the OPL 281 PSC. Once this is done, a PSC execution date will be agreed and communicated to SacOil. In addition, SacOil has completed the seismic and well re-interpretation of the existing 3D seismic data, and is currently in the process of engaging with a Competent Person to certify the OPL 281 contingent resources. SacOil has identified substantial prospective resources in OPL 281, which will be subjected to the Competent Person for certification.
The 2013 program remains subject to final NNPC approvals, but is expected to be focused on reprocessing of existing and raw 3D seismic data over the block and the drilling of one well.
Qualified Person Review
This release has been reviewed by Bradley Cerff, Vice President Operations, who is a member of the Society of Petroleum Engineers with 16 years’ experience in petroleum exploration and management. Bradley Cerff has consented to the inclusion of the technical information in this release in the form and context in which it appears.
10 April 2013
For further information please contact:
finnCap Limited (Nominated Adviser and Broker)
FirstEnergy Capital (Joint Broker UK)
GMP Securities Europe LLP (Joint Broker UK)
Keyter Rech Investor Solutions (SA)
Pelham Bell Pottinger (UK)