Apr 05, 2011
SacOil to bolster executive team as it prepares for London listingBack
Engineering|Expertise|Africa|Exploration|PROJECT|Projects|Africa|Democratic Republic Of Congo|Oil And Gas
© 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 (150 word limit)
Other Energy News
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
This Week's Magazine
Today’s organisations execute projects within increasingly complex environments – particularly in the engineering sector. The ability to successfully execute these projects is what drives the realisation of successful projects and, ultimately, the achievement of...
South Africa’s distribution grid is a twentieth-century relic, which must be changed to serve the country’s modern electricity needs, says South African National Energy Development Institute (Sanedi) Smart Grid Programme manager Dr Minnesh Bipath. “What we are...
There is a disparity in government funding provided to integrated transport networks – bus rapid transit (BRT) networks ¬¬– and that given to conventional bus services, says Putco executive director Thys Heyns. “We have neglected and strangled conventional bus...
The Johannesburg Social Housing Company (Joshco) is building 502 rental housing units, valued at R200-million, in Dobsonville, Soweto, which are scheduled for completion in June 2016.
Automotive component manufacturer and distributor Metair is centralising its research and development (R&D) work in Turkey, in an attempt to bolster the company’s ability to produce affordable start/stop batteries. The new R&D centre is part of an expansion plan in...