Mar 18, 2011
SacOil to start trading on Aim next monthBack
London|Africa|Energy|Exploration|Gas|Projects|SacOil|Semliki Energy|Africa|Democratic Republic Of Congo|United Kingdom|GBP|Energy|Oil And Gas|Oil And Gas Transactions|Oil Block|Colin Bird|Robin Vela
© Reuse this
The South African Reserve Bank approved the admission, which is expected on April 8. The company, which has a primary listing on the JSE, is expected to list with a market capitalisation of £156-million (about R1,7-billion).
Vela says that the secondary listing will allow SacOil to be 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, some with an indigenisation feel.
He adds that the board intends to attract new UK institutional investors and raise its public profile to ensure that it remains sufficiently capitalised to further develop current exploration projects and execute near-production and producing-asset oil and gas transactions in the pipeline.
Last week, SacOil announced that French oil and gas major Total would buy a big stake in its Democratic Republic of Congo (DRC) oil block.
Vela notes that the announcement led to shares in SacOil climbing 24% to 257c a share at the close of business on March 7.
Before the transaction, SacOil subsidiary Semliki Energy held an 85% share of the block and the DRC government the balance. After the transaction, Total will own a 60% interest in the explo- ration permit for Block III, Semliki 25% and the DRC government 15%.
All conditions precedent have been satisfied, apart from the transaction being approved by shareholders. The intention is to complete the Total deal by the end of March.
SacOil will receive $7,5-million in cash upfront, followed by $54-million, which will be paid in two stages.
SacOil states that it is financially derisked in Block III as Total carries its entire exploration expenditure obligations until a final investment decision. It is also technically and oper- ationally derisked with Total as operator.
SacOil executive director Colin Bird says that Total has removed the two key risks that a junior and its shareholders have in the DRC, namely poor execution and financing.
“In SacOil’s early stages of development, it is important that, whatever acreage it gets, it is able to work up to production in as short a time as possible,” says Vela.
To do so, the company needs a partner that can provide transfer of skills, operate the block and derisk the asset as far as possible – Total met these requirements, he adds.
Edited by: Martin Zhuwakinyu© Reuse this Comment Guidelines
Other Economy 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...