20th May 2015 08:30
LONDON (Alliance News) - SacOil Holdings Ltd Wednesday said it is terminating a Nigerian joint venture, in a move that means it will no longer participate in oil prospecting licence 233, as it pursues its process of "balancing and rationalising its portfolio of assets".
In a statement, the company said it wants to restructure its capital requirements and focus on "low risk exploration assets" and those that generate cash.
The decision means SacOil has put an end to its joint venture with Nigdel United Oil Co of Nigeria.
SacOil said it has the right to be refunded by Nigdel for costs to date on the licence.
"Consequently, SacOil has no future commitments and obligations associated with the appraisal of OPL 233. Further announcements relating to the details of the company's withdrawal from OPL 233 will be made in due course," SacOil said.
SacOil Chief Executive Thabo Kgogo said that terminating the joint venture improves the company's financial position and cuts future exposure "emanating from such higher risk assets".
"With the expected return of capital from OPL 233 and OPL 281, combined with SacOil's existing cash resources, the company will be in a far stronger position to pursue its strategy of increasing production and focusing on cash generative assets," Kgogo said in a statement.
SacOil shares were untraded on Wednesday morning. The stock last traded at 1.35 pence.
By Samuel Agini; [email protected]; @samuelagini
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