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SacOil Raises Eight Million Rand in Share Issue

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09 Jul 2012

Sacoil 24,579 Million New Ordinary Shares; Raises R8,3m to Fund Costs for Potential Transactions

Sacoil is to issue 24,579 million new ordinary shares to YA Global Masters SPV Limited (YA) at a price of 34c per share, raising R8,3m, or approximately one million dollars.

The share issue is pursuant to the terms of a standby equity distribution agreement between YA and SacOil, approved by shareholders in a general meeting in November 2011.

The proceeds will be used to fund costs in relation to potential transactions, Sacoil said on Monday.

SacOil’s total issued share capital after the issue will be 918 268 379 ordinary shares.

The company also advised that further to it successfully posting a US$25m performance bond as part of fulfilling its obligations under the joint venture and production sharing agreements, the OPL 233 joint venture partners have completed the interpretation and evaluation of the existing seismic and well data on the block.

In addition, the modelling and planning of a 3D ocean-bottom cable survey was completed and finalised in the second quarter of 2012.

In preparation for the 3D seismic acquisition, the joint venture partners are now finalising the seismic contractor assessments and engagements for the acquisition. Immediately after the contract award, which is expected soon, acquisition and processing will begin, leading to what is expected to be the selection of an optimal well location. The acquisition and processing of the ocean-bottom cable is funded through the cash collateral of US$10m provided by SacOil as part of the posting of the bond.

Shareholders were also advised that the company was still considering specific potential transactions, which, if successfully concluded, could have a material effect on the price of SacOil shares.

SacOil said the delay in reaching a resolution was due to a revised transaction structure, additional parties, and regulatory and approval processes taking longer than initially anticipated.