Apr 05, 2011
SacOil to bolster executive team as it prepares for London listingBack
Cape Town|Engineering|Expertise|Johannesburg|London|Africa|Exploration|Gas|PROJECT|Projects|Africa|Democratic Republic Of Congo|Libya|Nigeria|Tunisia|United Kingdom|USD|Oil|Oil And Gas|Value Chain|Robin Vela|Saharan Africa
© Reuse this
Vela said SacOil would bolster its board with professionals, who had experience in taking oil companies up the value chain and who could offer technical expertise.
The company would arm itself with a project execution team, including a geophysicist, geologist, reservoir engineer and commercial manager that would be based in Cape Town.
Vela described SacOil as a company with an “aggressive” acquisition drive.
The Johannesburg-based firm currently holds assets in the Democratic Republic of Congo and near-term production acreage in Nigeria.
“We will keep our focus on the western rift of sub-Saharan Africa when looking for other near-term production or production assets.
“It has been a long time since Nigeria has been seen as more stable than Tunisia or Libya, but that is now the case, and this has placed additional premium on our assets,” said Vela.
He added that the higher oil price at just over $120/bl also made the company’s current assets more valuable than when it initially acquired them.
Vela believed that these assets would retain their value even in the longer term, but said it would be somewhat more expensive to acquire more assets. “I think the days of oil trading at $70/bl are long gone, and expect oil prices to trade around $90/bl to $100/bl in the medium term.”
Meanwhile, SacOil said that the secondary listing on Aim would expose the company to a bigger pool of investors, and, therefore also a broader capital base.
“To achieve our acquisition drive, we need access to capital. SacOil has been lucky enough to be supported by a number of South African institutions to date, but feel that it would be in the interest of the company and its shareholders to expand its capital base globally,” said Vela.
He added that SacOil’s board intended to attract new UK institutional investors and raise its public profile to ensure that it remained sufficiently capitalised to further develop current exploration projects and execute near-production and producing-asset oil and gas transactions in the pipeline.
The company is expected to list with a market capitalisation of £156-million or about R1,7-billion, which according to Vele would provide it with sufficient working capital for the next 12 months after listing.
Vela further believed that the Aim listing would stabilise SacOil’s current share price, which he described as “volatile” and “undervalued”.
The company’s share price peaked last month at R2,57 a share, but was trading at R1,87 a share on Tuesday. Vela said that the volatility in share prices were not based on real fundamentals, but rather driven by emotion and JSE investors being more retail driven.
But Vela believed that the listing in London would see SacOil being evaluated against a number of its peers, which would allow a real comparable pricing for its stock.
Companies are regarded as peers in terms of their stage of development, their focus on African acreage and the fact that they are pure-play upstream entities.
Edited by: Mariaan Webb© Reuse this Comment Guidelines
Other Energy News
Recent Research Reports
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
Real Economy Insight: Road and Rail 2014 (PDF Report)
This six-page brief covers key developments in the road and rail industries over the past 12 months, including details of South Africa’s road and rail network and prospects for both sectors.
Real Economy Insight: Steel 2014 (PDF Report)
This four-page brief covers key developments in the steel industry over the past 12 months. It provides an overview of the global and South African steel and stainless steel markets, South Africa’s major steel producers and events that have shaped these markets.
This Week's Magazine
Multinational semiconductor chipmaker corporation Intel announced its national campaign to further acquire partners to drive its She Will Connect programme, an initiative that aims to expand digital literacy skills to young women in developing countries, further into...
South Africa's MeerKAT radio telescope array programme should get back on schedule within a few months. This assurance has been given by SKA South Africa (SKA SA) associate director: science and technology Prof Justin Jonas. Early last month, Science and Technology...
The Passenger Rail Agency of South Africa’s (PRASA’s) Metrorail service will remain a subsidised service following its current multibillion-rand rolling stock, station, depot and signalling upgrade programme. PRASA group CEO Lucky Montana has allayed fears that...
The uncertainties around the remediation of affected areas as addressed in the Contaminated Land Provisions in the National Environmental Management: Waste Act No 59 of 2008 will possibly spark litigation and disputes between landowners and businesses, contractors...
South Africa is currently the largest component of the African Development Bank’s (AfDB’s) active portfolio in Southern Africa, comprising 62.5% of the bank’s $7.9-billion exposure to the 12-country region – the second largest beneficiary is Mauritius, which...