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Operations Update

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10 Mar 2014

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”)

SacOil Holdings limited

(“Sacoil” or the “Company”)

Operations Update

SacOil, the South African based independent African oil and gas company listed on the JSE and AIM (JSE: SCL / AIM: SAC), is pleased to provide the following update on its on-going operational activities in Nigeria and Malawi.

Satisfactory progress has been made across the existing portfolio of exploration and appraisal assets. The Company also continues to evaluate a number of opportunities to secure new value accretive acreage in established and prolific African hydrocarbon jurisdictions and basins.

Highlights:

  • Nigeria, OPL 233: 3D Seismic Data Acquisition project contractor commences mobilization process
  • Malawi, Block 1: Completion of the environmental screening study and approval of 2014 budget

Nigeria, OPL 233: 3D Seismic Data Acquisition project contractor commences mobilization process

In preparation for the scheduled 3D Seismic Data Acquisition project, the Environmental Impact Assessment (“EIA”) on the block, handled by Tidalflow Nigeria Limited, has been completed with both wet and dry season sampling carried out. While the wet season sampling has been completed and the result approved by the Department of Petroleum Resources (“DPR”), the dry season sampling is presently undergoing processing before being forwarded to the DPR. The Federal Ministry of Environment has also carried out the required site verification and EIA registration processes. The final report on the Seabed Hazard Survey by Epanoe Nigeria Limited has been delivered to, and accepted by the Joint Venture Partners as well as the field’s seismic data acquisition contractor, Geomarine Systems Limited, following successful completion of the work.

SacOil and its OPL 233 partners have commenced operations for the 3D Seismic Ocean Bottom Cable (OBC) survey, with mobilization of equipment for the survey in progress.

The timeline envisages full mobilization to the site to be completed by the end of March 2014. To this extent, various equipment including the requisite gun boats and seismic recording cables have been delivered, whilst navigation equipment and seismic sensors are being air-freighted to compress the lead time to actual recording of data.  Following mobilization, the 3D OBC acquisition work is expected to commence early April 2014 and be completed by the end of July 2014, subject to operational contingencies and weather related issues. Finalisation of formalities for the seismic data processing contract is ongoing.

The 3D seismic data will provide valuable subsurface information relevant for the quantification of the licence’s resource potential, as well as the selection of an optimal drilling location. The Company expects the processing of the raw data and interpretation of results to be completed by Q3, 2014. SacOil holds a 20% interest in OPL 233.

Malawi, Block 1: Completion of the environmental screening study and approval of 2014 budget

In April 2013, SacOil initiated a satellite screening study associated with an environmental risk assessment for a proposed exploration program over the license area, covering approximately 16 000 sq km across northern Malawi. The study was successfully completed in December 2013.

At a meeting held in Lilongwe in December 2013, the results of the satellite study was presented to the Malawi Department of Mines and the 2014 budget and work program was also presented and approved.

With the positive results associated with the satellite environmental work, planning of the environmental and social impact assessments has now begun. In consultation with the Malawian government, SacOil is currently targeting to have all environmental work completed by Q3 2014. The company holds a 100% interest in Block 1.

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 over 15 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 March 2014

Johannesburg

ENDS

JSE Sponsor

Nedbank Capital

For further information please contact:

 

finnCap Limited (Nominated Adviser and Broker)

Matthew Robinson / Christopher Raggett

+44 (0) 20 7220 0500

FirstEnergy Capital (Joint Broker UK)

Majid Shafiq

Travis Inlow

+44 (0) 20 7448 0200

 

Pelham Bell Pottinger (UK)

 

Philip Dennis

+44 (0) 20 7861 3919

Nick Lambert

+44 (0) 20 7861 3936

Rollo Crichton-Stuart

+44 (0) 20 7861 3918