SacOil Holdings Limited BUILDING AN AFRICAN INDEPENDENT UPSTREAM OIL - - PowerPoint PPT Presentation

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SacOil Holdings Limited BUILDING AN AFRICAN INDEPENDENT UPSTREAM OIL & GAS COMPANY AGM Presentation 30 November 2012 Disclaimer THIS DOCUMENT (DOCUMENT) IS STRICTLY CONFIDENTIAL AND IS BEING PROVIDED TO YOU SOLELY FOR YOUR


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SacOil Holdings Limited BUILDING AN AFRICAN INDEPENDENT UPSTREAM OIL & GAS COMPANY

AGM Presentation

30 November 2012

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THIS DOCUMENT (“DOCUMENT”) IS STRICTLY CONFIDENTIAL AND IS BEING PROVIDED TO YOU SOLELY FOR YOUR INFORMATION. THE DISTRIBUTION OF THIS DOCUMENT MAY BE RESTRICTED BY LAW. ACCORDINGLY, THIS DOCUMENT MAY NOT BE DISTRIBUTED IN ANY JURISDICTION EXCEPT IN ACCORDANCE WITH THE LEGAL REQUIREMENTS APPLICABLE TO SUCH JURISDICTION. IN PARTICULAR, YOU MAY NOT DISTRIBUTE, FORWARD, REPRODUCE, TRANSMIT OR OTHERWISE MAKE AVAILABLE THIS DOCUMENT OR DISCLOSE ANY INFORMATION CONTAINED IN IT OR CONVEYED DURING ANY ACCOMPANYING ORAL PRESENTATION (THE “INFORMATION”) , IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN, OR IN ANY OTHER JURISDICTION WHERE TO DO SO WOULD BE UNLAWFUL. FAILURE TO COMPLY WITH THESE RESTRICTIONS MAY CONSTITUTE A VIOLATION OF APPLICABLE SECURITIES LAWS. PERSONS INTO WHOSE POSSESSION THIS DOCUMENT COMES ARE REQUIRED BY THE COMPANY TO INFORM THEMSELVES ABOUT AND TO OBSERVE ANY SUCH RESTRICTIONS. NEITHER SACOIL HOLDINGS LIMITED (“THE COMPANY”) NOR ITS DIRECTORS, OFFICERS, EMPLOYEES, RESPECTIVE AFFILIATES, AGENTS OR ADVISERS ACCEPT ANY LIABILITY TO ANY PERSON IN RELATION TO THE DISTRIBUTION OR POSSESSION OF THIS DOCUMENT IN OR FROM ANY JURISDICTION. The Document and the Information have been prepared by or on behalf of, and is the sole responsibility of, the Company. The Information is being provided to you during an oral presentation and is not a complete record of that discussion. The Information does not purport to be full or complete and does not constitute investment advice. No representation or warranty, express or implied, is given by or on behalf of the Company, its affiliates, agents or advisers or any other person as to, and no reliance may be placed for any purposes whatsoever on, the adequacy, accuracy, completeness, fairness or reasonableness of the

  • Information. None of the Information has been independently verified by the Company, its affiliates, agents or advisers or any other person, and no liability or responsibility whatsoever is accepted by any of them

for any loss howsoever arising, directly or indirectly, from any use of the Information or otherwise arising in connection therewith. The Company, its affiliates, agents and advisers do not undertake and are not under any duty to update this Document or to correct any inaccuracies in the Information which may become apparent, or to provide you with any additional information. The sole purpose of this Document is to provide background information to assist you in obtaining a general understanding of the business of the Company. This Document does not constitute an offer to sell, or a solicitation of an offer to buy or subscribe for, securities of the Company in any jurisdiction. It is not intended to provide the basis of any investment decision, financing or any other evaluation and is not to be considered as a recommendation by the Company, its affiliates, agents or advisers that any recipient of this Document purchase or subscribe for any securities in the Company. Each recipient of this Document contemplating any investment in the Company is required to make and will be deemed to have made its own independent investigation and appraisal of the business, results of operations, financial condition, liquidity, performance and prospects of the Company and the merits and risks of an investment in the securities of the Company. The delivery of this Document at any time does not imply that the information in it is correct as of any time after its date, or that there has been no change in the business, results of operations, financial condition, liquidity, performance and prospects of the Company since that date and no

  • bligations is accepted to update any such information after the date of the Document. No person affiliated with the Company, their directors, officers, employees, respective affiliates, agents or advisers has been

authorised to give any information or to make any representation not contained in this Document and, if given or made, such information or representation must not be relied upon. The securities of the Company have not been, and will not be, registered under the US Securities Act of 1933, as amended (the "Securities Act") and may not be offered, sold, transferred or delivered, directly or indirectly, within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. In the United Kingdom, this document is directed solely at persons having professional experience in matters relating to investments and who are investment professionals as specified in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Financial Promotions Order"), to persons who are high net worth companies, unincorporated associations or high value trusts as specified in Article 49(2) of the Financial Promotion Order (all such persons together being referred to as "relevant persons"). In addition to the foregoing restrictions, this document is made and directed only at persons falling within the meaning of "qualified investors" as defined in section 86 of the Financial Services and Markets Act 2000 (as amended).

Disclaimer

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Forward-looking statements in this Document reflect the Company’s view with respect to future events as at the date hereof and are subject to known and unknown risks, uncertainties and assumptions relating to the Company’s operations, results of operations, financial condition, growth, strategy, liquidity and the markets in which the Company operates. No assurances can be given that the forward-looking statements in this Document will be realised. Forward-looking statements are not guarantees of future performance. The Company, its affiliates, agents and advisers undertake no obligation and do not intend to update any forward-looking statements in this presentation to reflect events or circumstances after the date of this presentation. This Document may contain forward-looking statements, including, but not limited to, statements as to the Company’s business, results of operations, financial condition, liquidity, performance and prospects and trends and developments in the markets in which the Company operates. Forward-looking statements include all statements other than statements of historical fact and in some cases may be identified by terms such as “targets”, “believes”, “expects”, “anticipates”, “estimates”, “aims”, “intends”, “will”, “may”, “would”, “could” or, in each case, their negative or comparable terms. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances that may or may not occur. A number of factors, which may be beyond the control of the Company, its affiliates, agents and advisers, could cause actual results and developments to differ materially from those expressed or implied by the forward-looking statements.

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Vision

Ability to operate through the exploration phase, but will focus on the establishment of strategic partnerships to manage portfolio risk and ensure that the optimum technical and operating skills are applied to each opportunity . To build an African independent upstream oil and gas business with a balanced portfolio of assets in Africa. Utilise the company’s South African DNA as a competitive advantage at point of entry

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Access assets and opportunities in proven hydrocarbon basins, across the E&P spectrum.

SacOil's objective remains to provide shareholders with maximum opportunity for capital growth but with commensurate and prudent management of the risks inherent in exploration.

Generation of cash flow from production of crude/ gas.

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Past 12 months – in challenging times

Resolution of Identiguard litigation matter in SacOil’s favour Block III – Acquisition of airborne gravity and magnetic survey OPL 233 – Posting performance bond, 1 year licence extension, 3D OBC from Chevron on part of the block. Disposal

  • f

non core/ loss making Greenhills Plant

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OPL 281 – Restructure of agreements to reduce capex requirement from SacOil

SacOil Holdings Ltd (AIM: SAC, JSE: SCL) Ordinary Shares in Issue 953,340,791 Market Capitalisation - ZAR 324,14 million* Market Capitalisation – GBP 22,9 million* 52 Week High-Low 0.68 - 0.28* 30 Day Average Volume 3,456,176* Top 4 Shareholders (as at 26 Oct 2012) 55% of ordinary shares

Source: * - i-NET Bridge / Nedbank Capital Source: Reuters

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Past 12 months – SacOil relative to peers

5 SacOil share price performance relative to AIM listed peers as shown by E&Y Oil & Gas Eye index. Some of these companies were equally under pressure

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Past 12 months – what you have not seen

Production transaction – Pre-empted at the 11th hour on a transformational transaction having spent 8 months and finance in place. Break fee of US$1m paid to SacOil OPL 233 & OPL 281 – Significant progress made in perfecting title and establishing a presence in Nigeria Negotiations on specific value adding transactions ongoing

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Dealflow that is qualified and proprietary being evaluated by technical team

  • Tunisia
  • Egypt
  • Ghana
  • Ivory Coast
  • Cameroon
  • South Africa
  • Malawi
  • DRC
  • Nigeria

Focus remains on optimisation of current assets, but SacOil continues to evaluate and seek further upstream assets on the African continent

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  • Africa is highly prospective for hydrocarbon systems and is

underexplored

  • This provides significant “high impact” exploration growth
  • pportunities and the ability to add incremental value to

shareholders

Build

an African footprint with a balanced portfolio of assets

SacOil Strategy

Target

discovered but undeveloped/near-term producing assets

Explore

early stage opportunities in Africa with low entry costs

Seek

partnerships with major oil & gas companies with extensive experience in Africa

  • SacOil is the only JSE listed, independent upstream oil and gas

company

  • SA DNA: Well positioned to become an African based African

independent upstream oil & gas company

  • Current portfolio includes assets in the DRC and Nigeria
  • SacOil will seek to grow through acquisitions, farm-ins and

license rounds

  • The retreat of the Majors from discovered but undeveloped

marginal oil fields in Africa provides significant opportunities

  • Near term producing assets financially and operationally de-

risks the company

  • Provides an opportunity to monetize assets
  • Enables us to leverage the value curve by bringing

undervalued assets into account

  • Our unique position as an African oil and gas company allows

us a competitive advantage at the point of entry

  • We are able to utilize expertise, through our highly

experienced board and unique relationships, to acquire underexplored African assets

  • Leveraging our ability to execute asset transactions to develop

assets on favourable terms

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Offers Strong Growth in Shareholder Value

Build

Explore

Seek Target

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Strategy and Focus

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Market ‘Value’ Time - Upstream Investment

Early Stage Growth Stage Mature Stage OPL 233 OPL 281 Block III

SacOil Focus

  • Appraisal and development acreage.
  • Discovered and undeveloped assets.
  • Onshore North and West Africa.
  • Mitigation of risks.
  • Acquire early stage exploration acreage.
  • East Africa and African rift basins
  • Partner indigenous companies.
  • Mitigation of risks.
  • Execution of work program.
  • Farm down to JV partners.
  • Production acreage – provision of cashflow.
  • On and offshore North and West Africa.
  • Small producing assets.
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Location

Licence area: 3,177 square km. Located on the DRC side of the Albertine Graben Basin, part of the East African Rift System. Block within proven petroleum system, on trend with major Ugandan oil fields. Existing oil/gas discoveries within 10 km of block boundary. PSC Term and Work Program Total RDC - Operator (66.66%) and operator of Block 3 Uganda. SacOil (12.5%) – fully carried by Total to FID with US$54m of bonuses due in two stages. Exploration Program Acquisition 500km of 2D seismic. Drilling of the 2 exploration wells. Minimum Phase 1 Expenditure commitment US$ 70 Million.

Block III, DRC:

Overview & Location

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Source: Bayphase Limited: Competent Person’s Report dated February 2012

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Block III, DRC:

Operational Plan

2011

  • Environmental studies completed

2012

  • Total increased equity in the block to 66.66%.
  • Completed acquisition and interpretation of

Aero Gravity Aeromag survey over the northern part of the block.

  • Tender for 2D Seismic acquisition issued.
  • 500 km of 2D seismic lines to be acquired.

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Nigerian Assets Under Acquisition :

Overview

OPL 281 OPL 233

  • OPL 233 and OPL 281 after finalisation of title will result in SacOil holding a 20%

interest in both blocks

  • Both OPL’s have potential for rapid monetization and are in the vicinity of abundant

infrastructure

  • Production revenue from EWT will accrue to the JV partners, gross of PSC Royalty and

Taxes

  • No relinquishment required on conversion from OPL to OML

11 Proximity and location of OPL 233 and OPL 281 in relation to the prolific Niger delta

Source : IHS 2011, SacOil

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Distance Warri 20 km Port Harcourt 163 km Communities Obotebe Kingdom Forcados Crude Export Terminal 25km Odidi Platform (Gas / Condensate processing) 22 km Forcados facility 25 km Wells drilled 1967 /1970

OPL 281:

Location

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Source: Energy Equity Resources Source: Energy Equity Resources; 2012 Source: Energy Equity Resources; 2012

New PSC - five year Exploration Period divided into two separate phases. Transcorp 60% (Operator) , SacOil 20%, EER 20%. Minimum Commitments

  • Reprocessing of existing 3D data over the block
  • Drilling of two wells.

Two discoveries on block, certified Contingent resources.

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I year extension granted to the first phase of exploration. 126 sq. km block. Water depth of less than 30 ft. 103 ft. of net oil pay discovered in Olobia-1, certified Contingent resources. Significant exploration upside potential. Adjacent to Apoi field (600 MMbbl)

OML141

Giant Apoi field (>600MMBO) adjacent to block

OPL 233:

Location

OPL 233 located in very shallow water

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1Source: Energy Equity Resources and SacOil; 2012

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OPL 233:

Work Program

Completed interpretation of existing 2D seismic and well data. Log analysis interpreted to be oil bearing. Completed modelling and planning of the 3D OBC seismic survey. In the process of finalising 3D OBC contractor assessments and engagements.

Source: SacOil ; 2012 Source: WesternGeco and EER; 2012

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Nigerian Assets:

Recent Transaction

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Schedule of Activities

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Conclusion

Company’s financial resources to be strengthen to enable SacOil to take advantage of numerous value accretive opportunities presented to it Short term – focus on optimisation of current assets (Title perfection/ work commencement)

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Strategic need to bulk up is recognised and being evaluated by the board – institutional investors now looking at minimum size investments in medium sized entities with

  • materiality. Strategic review underway with all options being considered.