SacOil says Nigeria, Congo oil blocks close to production

23 November 2012, Sweetcrude, Lagos – UPSTREAM oil and gas company, SacOil, says its three oil assets in the Democratic Republic of the Congo and Nigeria will soon begin production.

Chief Executive Officer Robin Vela, who disclosed this soon after SacOil released its interim results for the six months ended August, said much activity had taken place at the three assets to bring them closer to production.

One asset is an oil block known as Block III, in the eastern part of the Congo alongside the border with Uganda. SacOil has a 12.5% effective interest in Block III.

Its other interests are 20% stakes in two blocks in Nigeria — OPl 281 and OPL 233.

Mr Vela said OPL 233, an offshore oil field in Nigeria’s Delta region, was closest to production. At Block III, French multinational oil and gas company Total — the operator and majority owner of the block — has acquired an airborne gravity and magnetic survey of the northern part of the block.

Total has an effective 66.66% interest in the block.

“Given the nature of SacOil’s business, which requires lump sum up-front capital investment, it is not unusual for there to be significant changes in the financial results from one period to the next,” Mr Vela said. “As a result, this period includes a comprehensive loss attributable to SacOil of R12.6m, which is an improvement from the restated comprehensive loss of R100.1m for the comparative period.”

SacOil said it would not declare any dividend to shareholders for the period under review, “choosing to retain cash for working capital and project development requirements”. The company had an aggressive acquisitive growth strategy.

In the six months, SacOil eventually disposed of its noncore Greenhills manganese processing plant in Mpumalanga, “allowing management and capital resources to be focused on the core oil and gas business”, Mr Vela said.

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