SacOil Completes Transformational Acquisition of Controlling Interest in Afric Oil Group

31 May 2017

The Company is pleased to announce that it has formally commenced trading under the new name of Efora Energy Limited (“Efora”). Efora also announces the commencement of a new capital structure following the Share Consolidation as voted for at the Annual General Meeting held on 2 October. The Consolidation is on the basis of 10 to 1 by the consolidation of every 10 Ordinary Shares into 1 Ordinary Share.

SacOil, the South African based independent African oil and gas company that is focussed on the full oil and gas value chain, is pleased to announce that is has fulfilled all conditions precedent relating to the acquisition of a controlling interest in Afric Oil, via the acquisition of Phembani Oil Proprietary Limited (“Phembani Oil”) from Gentacure Proprietary Limited (“Gentacure”) and its holding company, Moopong Investments Holdings Proprietary Limited (“Moopong”) (“the Acquisition”).

SacOil will have a 71% direct interest in Afric Oil Group (“Afric Oil”), one of the largest independent fuel distributors in South Africa, targeting distribution of circa 45 million of fuel product (diesel, petrol and paraffin) monthly to a diversified client base that include local and national government, mining, construction, transport, manufacturing, parastatals, resellers and agricultural clients.

The acquisition provides SacOil with its first operational footprint in South Africa, as well as entry into Zimbabwe. SacOil’s diverse portfolio now comprises of operated production activities in Egypt, exploration in Democratic Republic of Congo, alongside partner TOTAL E&PRDC, Malawi and Botswana, a crude trading allocation with Nigerian National Petroleum Company and fuel distribution operations in Southern Africa.

The final consideration for the Acquisition has been adjusted downwards from R200 million as previously announced to R183.45 million, consisting of an initial consideration of R128.49 million and contingent consideration of R54.96 million. The cash component of the initial consideration is R39 million that is due and payable on closing of the Acquisition and a contingent cash payment of R2.26 million due 12 months after the Acquisition. The initial consideration of R89.49 million will be settled in shares on closing of the Acquisition and the contingent consideration of R52.7 million will be settled 12 months after the closing of the Acquisition. The pricing basis for the issue of the shares is as set out in the announcement on 6 March 2017 and the price used for the issue of 690m at a price of 20.9c that represents a 10% discount to the 90 day VWAP.

On 31 May 2017, SacOil secured an equity bridge loan from Gemcorp Africa Fund I Limited, a company based in Mauritius. The loan is repayable in 12 months from the proceeds of a rights issue which the Board has committed to undertake within the next 12 months. The loan is secured by a cession in security of the rights offer proceeds, bears interest at 8.5% per annum and was arranged at a fee of 2%. The loan will be utilised to fund the acquisition of Phembani Oil and for working capital for general corporate purposes of the Group.

Commenting on the acquisition, CEO Dr Thabo Kgogo said:

• “Completion of this acquisition represents the first chapter in the next book of SacOil’s story. The impact of this acquisition on the Company’s operational and financial profile is truly transformational, and takes us a large step closer to achieving our strategic goal of becoming a leading pan-African player with operations along the full industry value chain. Afric Oil’s operations further balances our portfolio with a greater emphasis on lower-risk, revenue generating assets. Following completion of this transaction, we will now work closely with Afric Oil’s quality management team in delivering an ambitious growth strategy and enhancing profitability post completion of Afric Oil’s acquisitions of Big Red and Forever Fuels earlier in the year.”