DRC Presidential Ordinance granted in respect of Total’s interest in SacOil’s Block III

DRC Presidential Ordinance granted in respect of Total’s interest in SacOil’s Block III

SacOil is pleased to announce that the Government of the Democratic Republic of Congo has granted a Presidential Ordinance to Total E&P RDC, the operator of Block III, for their 60% interest in Block III. Pursuant to the Presidential Ordinance, the work programme approved by the Block III Operations Committee for 2012 will now commence in the next few weeks.

The initiation of the work programme follows extensive work undertaken by the Operator over the past six months. An Airborne Gravity and Magnetic Feasibility study as well as satellite imagery of the topography, physiography and vegetation of the block was completed in order to provide a geo-referenced numerical model for future operations in the block.

A budget to the end of 2012 of $30 million has been approved by the OpsCom and will fund the initial work programme. An Airborne Gravity and Magnetic Survey as well as the acquisition of a 2D seismic exercise on the northern area of the Block III located outside the Virunga National Park will be done during 2012. This seismic survey will estimate the properties of the rock and map the potential oil and gas prospects. Subject to positively identifying structures that may contain oil and gas, the Operator intends to drill an exploration well, which will determine the oil and gas potential and commercial viability of Block III.

Following the farm-out of Block III to Total in March 2011, SacOil is carried for the entire work programme and will not be required to contribute any further capital into this project until final investment decision, which is when a development plan is put in place.

Robin Vela, CEO of SacOil commented: "The granting of the ordinance is a significant step for progressing the asset in that the required testing and evaluation of the oil and gas prospects can begin in earnest. We believe that there is huge potential in this asset due to the neighbouring oil and gas discoveries in Uganda which suggest that Block III is in an attractive and hydrocarbon prospective address. We look forward to positive test results."

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