SacOil is an independent African upstream company based in South Africa that is dual listed on the JSE [Share code: SCL) and AIM (Share code: SAC). SacOil's vision is to build a balanced upstream oil and gas portfolio with interests in all phases of the cycle (high impact exploration, appraisal and production). SacOil has an ambitious acquisition-led growth strategy and is well positioned to exploit its foothold using its uniquely African footprint.

DRC - Block III ( Working Interest 12.5% )

After the successful farm out deal to ToTal, SacOil is fully carried through to commercial development on Block III which has target prospective resources of 513 million barrels.ToTal has paid $7.5m net cash, and a $54m contingent bonus payment to the company and the project can now be fast tracked ahead of earlier estimates. Analyst notes suggest the DRC assets are on trends with recent discoveries in the Lake Albert Basin.

Nigeria Block OPL 233 ( Working Interest 20% )

Background: OPL 233 is an offshore oil block previously operated by Chevron. It is located in the shallow Marine central Delta region offshore Nigeria. The block encompasses an area of approximately 126 square kilometres. The water depths range from 10 to 30 feet and the block is adjacently north of the Apoi oil field. The block was awarded to NIGDEL United during the Mini-Bid Round in 2006. Current equity participation is NIGDEL 60%, EER 20% and SacOil 20%.

Olobia-1 well indicates 103ft of net oil and 54ft of gas and condensates across
five reservoir zones in the well. Based on an evaluation by TRACS it is estimated
that the 2C Best estimate on the unrisked contingent resources is 19mmbbl
(3.8mmbbl net to SacOil). Therefore if a second well, Olobia-2, is drilled and tested
the reserves can immediately be booked and classified as a producible reserve.
In OPL 233 there is only one field, the Olobia Oil and Gas field, which has been
conceptually developed and worked up to a point that can be drilled.

Exploration upside: EER/SacOil have mapped additional leads and prospects using
the existing seismic data and estimate an exploration upside, with prospective
resources in the order of 300mmboe, which will be further evaluated with an OBC
(Ocean Bottom Cable) survey.

OPL 281 ( Working Interest 20% )

Background/Exploration history: The onshore block is located in the Western
delta region of Nigeria, 25km from the Facades Terminal (Exhibit 3). One structure has been identified and two wells were drilled by Shell in 1967 and 1970, both of which discovered hydrocarbons. Of the two wells, Obote-1 encountered hydrocarbons at four levels between 8,720ft and 12,350ft and Ekoro-1 discovered eight hydrocarbon sands between 8,260ft and 10,761ft.

OPL 281 was evaluated by TRACS to contain 99.2mmboe of gross reserves with
an expected initial gross production rate of 15 kbpd. Peak potential production
rate could reach 30 kbpd, when it could deliver up to $200m in revenues in our
assumptions. With relatively low running cost and a total capex need of $50m
net to SacOil, the field could generate significant cash flows in excess
of $40-45m pa by 2015/16.

www.sacoilholdings.com/


UK - ANALYST

Dual-listed SacOil is an independent African upstream oil and gas business. The company offers investors the promise of early production and cash flow as well as the chance to add substantial value by moving opportunities up the value chain. The recently announced interim results served to remind the market of the African oil plays impressive portfolio. The focus of attention over the past six months has been on the blue sky opportunity in Block III in the highly prospective Albertine Basin the Democratic Republic of Congo (DRC) which has been neatly de-risked following a farm-in by Total. At the same time the team has also has been fast tracking progressing the OPL 233 and OPL 281 concession blocks in Nigeria towards early production and revenues. In October, the company announced a $25 million Standby Equity Distribution Agreement with Yorkville which followed a R75 million (5.9 million) funding at R0.67 (5.28p) by Timtex Investments which should help provide the funds to accelerate these projects.

Interim results for the six months to 31st August 2011 showed that revenues from the Greenhills manganese operation increased by 17% to R19.3 million. Pre-tax profit came out at R19.15 million compared to a loss of R6.95 million at the halfway stage last year due to principally to receipts and fair value adjustments. In this period, SacOil through its 50%-owned DRC vehicle Semliki Energy SPRL (other 50% holder is DIG Oil Proprietary Limited) successfully concluded the farm-out and transfer of 60% stake in Block III to Total. In this move, SacOil gained cash of $7.5 million, a future contingent cash bonus of $54.0 million payable in two tranches, full carry on exploration costs of at least $35 million until the final investment decision and also the settlement of a $1.4 million loan provided to DIG. Importantly, SacOil has maintained representation on the management committee of Block III in which it now has a 12.5% effective stake that is fully funded.

Block III in the DRC occupies a large acreage in the Albertine Graben which forms part of the Eastern African Rift System where modern era exploration began only in 1999. Since then around 800MMbbls of recoverable oil resources have been discovered, which includes Tullows Kingfisher (200MMbbl) and the Giraffe-Buffalo (300MMbbl) discoveries, just the other side of the border in Uganda. On trend with Tullows discoveries lies Block III which represents a high risk exploration project where SacOil will be fully funded by Total until after a commercial reserve has been proved. Totals first plans have been for a gravity magnetic survey to outline the basin edges and to understand the workings of the petroleum system in that part of the prolific Albertine Graben. Next year will see the acquisition of seismic data to be followed by the drilling of two exploration wells, one either at the end of 2012 or beginning of 2013, followed by a second well in 2013. Under the term of the farm-in deal Total is required not only meet the work obligations on Block III but to reach a final investment decision by 31 March 2014.

In Nigeria, the company has been buying into projects at what would appear to be a 70% discount to open market prices. Indigenisation policies of the Nigerian Government coupled with minimum work commitments are bringing licences back onto the market that have not been looked at for the last 3-5 years. By partnering up with a local company, SacOil has been able to gain a sensible stake in the OPL 233 and OPL 281 licences. These are two blocks which both have already seen oil discoveries where there is obvious scope to add value by turning a contingent resource into reserves. The plan here is to book reserves and start production. The priority is OPL 233 where investors will not have long to wait as a seismic survey is due to be shot in Q1 2012 with an appraisal well planned for Q4 2012. There does seem scope for a substantial increase in reserves at OPL 233 with consultants TRACS identifying more than 100 feet of net oil and given that this block lies adjacent to the 600 million barrels (MMbbls) plus Apoi field. Good seismic here together with this well data could allow a significant resource to be proved up by the end of 2012. Two wells already exist on OPL 281 as well as good seismic data which points to one large field that may potentially contain close on 100 million barrels. All that could be confirmed by future appraisal drilling which looks set to begin by Q2 2013.

The prediction is that by 2020 Africa will account for 20% of world oil production. In recent years there has been a scramble for African oil and gas licences following some sensational discoveries. SacOil is led by a Board that has an enviable network in the continent and that are used to doing business in Africa coupled with a real depth of experience in the oil and gas industry. Two recent appointments have been John Bentley and Bill Guest who became Non-Executive Directors in May 2011. John was behind JSE-listed Energy Africa Limited which he turned into one of the leading independent upstream companies with operations in a dozen African countries and several big hydrocarbon resource discoveries in the late 1990s before it was acquired by Petronas. John was also the Executive Chairman of FirstOil Africa until taken over by Bowleven in 2007. Bill Guest has been a Director of a number of UK-quoted exploration and production companies which includes being President of Gulf Keystone Petroleum and a Non-Executive Director of Matra Petroleum.

The business model of this AIM and JSE-listed oil play is to provide the finance and enter joint ventures with local partners in a number of African countries with a clear focus on projects where value can rapidly be added by supplying the necessary financing. Given these sort of fundamentals it is little surprise that investors have got very excited about the potential of SacOil which caused the share price to climb above 20p in Johannesburg ahead of the AIM flotation. The dust has now settled and today the shares sit at a quarter of that price and that begs the attention of serious investors. We initiate our coverage on the stock with a Speculative Buy recommendation and with a target price of 27p.

http://uk-analyst.com/shop/page-advice/action-advertorial.show/id-130015105

benetoni, i came across this little beauty a few months back and think it could be
a bagger in early to mid 2012. There is results due now ( Q4 ) on the magnetic and
airbourne survey of block III acreage in DRC which is very close to some huge
discoveries by some big players ( hence total paying $60m + for the farm out ).

hi benetoni and davyboy

Nice to see a sacoil thread on here at last,been in this one a few months now and
been adding heavily recently.Think we may be close to some news on this very soon!

Anders, thanks and yes its good to see a sacoil thread on here at last! i came onboard
here a few months back after attending the OB conference where sac presented andi must say very well too.Impressive management team and very well connected in africa
too so expect some tasty deals to come here.

check out the OB presentation here

http://www.youtube.com/watch?v=XQ3SuHDVq4E

cheers davyboy i have heard a few others say that the OB went very well, i will have
to try and get to the next one myself. Been some talk today on some forums of SAC
about to aquire a stake on petroSA block 1 in SA ( sacoil vice president bradley cerff
is a former regional manager at petroSA ) so may be something in it !

davy,anders, welcome guys :-)

Great little company this and in an interesting phase,there seems to be some sort of
deal going on behind the scenes at moment thats either a new aquisition or maybe
the sale of the greenhills plant - or indeed both !

benetoni, cheers for the welcome mate i think we could see this move up nicely this
week and also get some NEWS!

benetoni, forgot to ask are you holding on AIM or JSE ?

Davy, holding shares on aim mate,although been thinking of buying JSE too

morning all, had a good top up here early on today ad happy to get under 4.5p.looks to me like they could be filling some large buy orders at moment so may take a few more
before they move it back up.

anders great minds think alike lol, had some more myself this morning while
its rock bottom.

davy, lol yes great minds ! could not resist another top up just now !

davy there is also a recent edison report out on sacoil worth a look !


http://www.edisoninvestmentresearch.co.uk/researchreports/sacoil241111update.pdf

anders cheers for the edison report,it reads rather well on top of others released recently,had a nice top up a while ago and very happy to be in here early doors.

Oh, that's good then, all three of you have had a top that was unresistable and no doubt just a little bit cheeky into the bargain.

News out today with SEDA payment in equity,very interesting as sacoil
have 11M + in the bank so why would they need to do this.....can only
be that they have reduced the small debt this way keeping the company
cash pile and reduced liabilties for an imminent transaction. Could either
be the sale of greenhills or new aquisition IMO.

benetoni thats exactly what i thought when i saw the RNS today :-)

I wonder if this report with 27p target price will look conservative in a few months
time ? they have cash,assets,well connected BoD,and have a business plan that
is said to be modelled on Afren and Heritage Oil who are active in africa...MMmm



Dual-listed SacOil is an independent African upstream oil and gas business. The company offers investors the promise of early production and cash flow as well as the chance to add substantial value by moving opportunities up the value chain. The recently announced interim results served to remind the market of the African oil plays impressive portfolio. The focus of attention over the past six months has been on the blue sky opportunity in Block III in the highly prospective Albertine Basin the Democratic Republic of Congo (DRC) which has been neatly de-risked following a farm-in by Total. At the same time the team has also has been fast tracking progressing the OPL 233 and OPL 281 concession blocks in Nigeria towards early production and revenues. In October, the company announced a $25 million Standby Equity Distribution Agreement with Yorkville which followed a R75 million (5.9 million) funding at R0.67 (5.28p) by Timtex Investments which should help provide the funds to accelerate these projects.

Interim results for the six months to 31st August 2011 showed that revenues from the Greenhills manganese operation increased by 17% to R19.3 million. Pre-tax profit came out at R19.15 million compared to a loss of R6.95 million at the halfway stage last year due to principally to receipts and fair value adjustments. In this period, SacOil through its 50%-owned DRC vehicle Semliki Energy SPRL (other 50% holder is DIG Oil Proprietary Limited) successfully concluded the farm-out and transfer of 60% stake in Block III to Total. In this move, SacOil gained cash of $7.5 million, a future contingent cash bonus of $54.0 million payable in two tranches, full carry on exploration costs of at least $35 million until the final investment decision and also the settlement of a $1.4 million loan provided to DIG. Importantly, SacOil has maintained representation on the management committee of Block III in which it now has a 12.5% effective stake that is fully funded.

Block III in the DRC occupies a large acreage in the Albertine Graben which forms part of the Eastern African Rift System where modern era exploration began only in 1999. Since then around 800MMbbls of recoverable oil resources have been discovered, which includes Tullows Kingfisher (200MMbbl) and the Giraffe-Buffalo (300MMbbl) discoveries, just the other side of the border in Uganda. On trend with Tullows discoveries lies Block III which represents a high risk exploration project where SacOil will be fully funded by Total until after a commercial reserve has been proved. Totals first plans have been for a gravity magnetic survey to outline the basin edges and to understand the workings of the petroleum system in that part of the prolific Albertine Graben. Next year will see the acquisition of seismic data to be followed by the drilling of two exploration wells, one either at the end of 2012 or beginning of 2013, followed by a second well in 2013. Under the term of the farm-in deal Total is required not only meet the work obligations on Block III but to reach a final investment decision by 31 March 2014.

In Nigeria, the company has been buying into projects at what would appear to be a 70% discount to open market prices. Indigenisation policies of the Nigerian Government coupled with minimum work commitments are bringing licences back onto the market that have not been looked at for the last 3-5 years. By partnering up with a local company, SacOil has been able to gain a sensible stake in the OPL 233 and OPL 281 licences. These are two blocks which both have already seen oil discoveries where there is obvious scope to add value by turning a contingent resource into reserves. The plan here is to book reserves and start production. The priority is OPL 233 where investors will not have long to wait as a seismic survey is due to be shot in Q1 2012 with an appraisal well planned for Q4 2012. There does seem scope for a substantial increase in reserves at OPL 233 with consultants TRACS identifying more than 100 feet of net oil and given that this block lies adjacent to the 600 million barrels (MMbbls) plus Apoi field. Good seismic here together with this well data could allow a significant resource to be proved up by the end of 2012. Two wells already exist on OPL 281 as well as good seismic data which points to one large field that may potentially contain close on 100 million barrels. All that could be confirmed by future appraisal drilling which looks set to begin by Q2 2013.

The prediction is that by 2020 Africa will account for 20% of world oil production. In recent years there has been a scramble for African oil and gas licences following some sensational discoveries. SacOil is led by a Board that has an enviable network in the continent and that are used to doing business in Africa coupled with a real depth of experience in the oil and gas industry. Two recent appointments have been John Bentley and Bill Guest who became Non-Executive Directors in May 2011. John was behind JSE-listed Energy Africa Limited which he turned into one of the leading independent upstream companies with operations in a dozen African countries and several big hydrocarbon resource discoveries in the late 1990s before it was acquired by Petronas. John was also the Executive Chairman of FirstOil Africa until taken over by Bowleven in 2007. Bill Guest has been a Director of a number of UK-quoted exploration and production companies which includes being President of Gulf Keystone Petroleum and a Non-Executive Director of Matra Petroleum.

The business model of this AIM and JSE-listed oil play is to provide the finance and enter joint ventures with local partners in a number of African countries with a clear focus on projects where value can rapidly be added by supplying the necessary financing. Given these sort of fundamentals it is little surprise that investors have got very excited about the potential of SacOil which caused the share price to climb above 20p in Johannesburg ahead of the AIM flotation. The dust has now settled and today the shares sit at a quarter of that price and that begs the attention of serious investors. We initiate our coverage on the stock with a Speculative Buy recommendation and with a target price of 27p.

anders, that report reads very well and backs up two other recent issued reports
by Edison and Shore Capital,i will dig them out and post links later. Cheers

davy / anders

An interesting development here today for sure....have just seen a post on another
forum that sums up what i was thinking on this. Thoughts??


"There are quite a few clues here i think that sacoil are preparing some sort of
deal , as i understand it they currently have around $12M in cash and also two
bonus payments of $54M to come from ToTal for the DRC BLOCK III farm out.

The seda has now been put in to operation, and there are some hefty clues in
a number of RNS statements that state they intend the seda to "MOVE THE
ASSETS UP THE VALUE CHAIN" so to me that is an obvious take on where we
are. The nigerian blocks will soon be monitised and the seda will be used for
legal and other fees to achieve this whilst retaining the company cash reserves.

This means that a clean balance sheet and a healthy cash reserve puts them in
an excellent position to move on further deals and also sell the manganese plant".

benetoni, good find :-) when read that way its obvious something being lined up