SUMMARISED AUDITED RESULTS for Year end

SacOil Holdings Limited

(Incorporated in the Republic of South Africa)

(Registration number 1993/000460/06)

JSE share code: SCL AIM share code: SAC

ISIN: ZAE000127460

("SacOil" or "the Company" or together with its subsidiaries "the Group")

Summarised audited results

for the year ended 28 February 2014

Highlights:

- Board and subcommittees reconstituted

- Lifting of JSE and AIM suspension

- R336.6 million raised through Rights Issue

- R238.5 million Gairloch loans converted to equity

- Company is debt free

- New shareholder structure

- Acquisition of three exploration licences in Botswana

- Commencement of OPL 233 3D seismic survey

- Signing of OPL 281 Production-sharing Contract

- Signing of a Memorandum of Understanding to pursue gas opportunities in Mozambique

- Appointment of new Chief Executive Officer

OVERVIEW

The Group's income and financial assets are predominantly denominated in US Dollars.

The weakening of the Rand, and the resulting increase in foreign exchange gains and

foreign income receivable, significantly underpinned the financial results of the Group.

In addition to the increase in income, the Group's operating costs decreased by 43%

primarily due to a reduction in the impairment of the Group's financial assets.

Consequently, for the year ended 28 February 2014, the Group reported a profit before

taxation of R64.7 million (2013: loss of 29.3 million).

FINANCIAL PERFORMANCE

Other income

Other income comprises foreign exchange gains totalling R47.4 million

(2013: R32.1 million) which arose on translation of the US Dollar denominated cash

collateral, the contingent consideration receivable and loans advanced to Energy

Equity Resources (Norway) Limited ("EERNL") and DIG Oil (Proprietary) Limited ("DIG").

In the prior financial year other income included profit of R71.7 million on disposal

Of exploration and evaluation assets, foreign exchange gains totalling R32.1 million,

the break fee received from a third party of R7.9 million and various other income

items totalling R11.5 million.

Other operating costs

The decrease in other operating costs is a combination of improved cost management

given the liquidity challenges faced by the Group during the 2014 financial year and

the reduction in the impairment of the Group's financial assets.

Investment income

Interest receivable from EERNL contributed R103.0 million (2013: R37.6 million)

towards investment income. The Group's cash and cash equivalents generated interest

income totalling R0.9 million (2013: R0.8 million). Interest accruing to the Group

as a result of the unwinding of the time value discount applied to the Group's

financial assets contributed a further R26.7 million (2013: R8.5 million). The Group's

financial assets in this regard are the contingent consideration receivable, the advance

payment against future services and the deferred consideration on disposal of the

Greenhills Plant.

The increase in investment income is primarily attributable to the weakening of the

Rand and default interest on the loan to EERNL at 2% per annum (compounded) from

1 June 2013, over and above the contractual interest rate of 30% per annum on loans

advanced to EERNL. No additional loans were advanced to EERNL during the financial

year under review.

Finance costs

The Group's finance costs for the year under review total R91.9 million

(2013: R64.0 million). Finance costs totalling R40.9 million (2013: R35.1 million)

incurred on specific borrowings from Gairloch Limited ("Gairloch") and the Public

Investment Corporation (SOC) Limited ("PIC") have been capitalised to the OPL 233

exploration and evaluation ("E&E") asset, which is a qualifying asset in terms of IFRS.

A further R38.1 million (2013: R5.1 million) is recoverable from EERNL under the terms

of the loan agreement with EERNL and has been capitalised to the EERNL loan receivable.

The remaining finance costs of R12.9 million (2013: R23.8 million) in the statement of

comprehensive income include interest totalling R11.6 million (2013: R5.1 million) on

Gairloch loans utilised for the Group's working capital requirements, and debt-raising

fees and interest paid on the loan from the PIC totalling R0.8 million (2013: RNil).

These loans were equity and cash settled in January 2014. Finance costs in the prior

year also included R18.7 million relating to the discounting of financial assets.

The increase in finance costs is primarily attributable to the Gairloch loan which

attracted interest for a period of seven months in the current year, relative to

one month in the prior financial year. This loan was equity-settled in January 2014.

FINANCIAL POSITION

Exploration and evaluation assets

The Group invested R62.6 million (2013: R7.5 million) in OPL 233 for the seismic

acquisition phase of the work programme. Furthermore, the Group capitalised

R40.9 million (2013: R35.1 million) of borrowing costs attributable to specific

Gairloch borrowings. The Group also acquired exploration licences in Botswana for

R0.4 million (2013: R0.9 million acquisition of Malawi licence).

Other financial assets

The Group's other financial assets include the contingent consideration receivable

from Total E&P RDC ("Total") pursuant to the farm-out of Block III, loans advanced to

EERNL and DIG, the advance payment against future services and the deferred

consideration on disposal of the Greenhills Plant.

Interest receivable for the year from EERNL increased other financial assets by

R103.0 million (2013: R37.6 million). Interest on specific Gairloch borrowings also

increased other financial assets by R38.1 million (2013: R5.1 million). This interest

is recoverable from EERNL under the terms of the loan agreement. During the financial

year under review, EERNL paid R13.8 million (2013: R25.8 million) towards the

settlement of the loan outstanding. An impairment provision of R37.9 million (2013: RNil)

relating to part of the short-term interest receivables off-sets these increases.

Foreign exchange gains contributed R105.4 million (2013: R25.1 million) to the increase

in other financial assets. These gains arose on the translation of the US Dollar

denominated contingent consideration receivable and the loans advanced to EERNL and DIG.

Interest arising from the unwinding of the time value discount applied to financial

assets contributed R26.7 million (2013: R8.5 million) to the increase in other

financial assets.

An impairment loss of R22.1 million (2013: R129.9 million) arising from the write-down

of future expected cash flows from the contingent consideration receivable also off-set

the increases noted above. The write-down was necessitated by a change in timelines

affecting the receipt of the contingent consideration and is reflective of the time

value of money.

Cash and cash equivalents

A Rights Offer that was undertaken to recapitalise the Company closed at the end of

January 2014. Total cash of R336.6 million was raised representing 59% subscription to

the Rights Offer. At 28 February 2014 cash and cash equivalents include R273.3 million

of these funds after the settlement of the PIC loan (R47.9 million) and the Group's

accumulated short-term liabilities (R15.4 million).

Cash and cash equivalents also include the historical OPL 233 performance bond cash

collateral of R108.1 million (2013: R89.1 million) (US$10 million) which has been

revalued by R19.0 million (2013: R6.5 million), net of interest income.

Total shareholders' equity

The Rights Offer proceeds noted above contributed R336.6 million towards the increase

in equity. The equity settlement of the Gairloch loans contributed a further

R238.5 million. SacOil also raised R0.7 million by way of a general issue for cash

during the financial year under review.

The Group's profit for the year increased shareholders' equity by a further R9.5 million.

Deferred tax liability

Deferred tax arises from the estimated future contingent consideration receivable and

various temporary differences on transactions of the Group. The increase in the

contingent consideration by R40 million (2013: decrease of R81.8 million) resulted in

a deferred tax change of R16 million (2013: credit of R32.7 million). A further charge

of R3.9 million (2013: RNil) arose from the Group's transactions with connected parties

and impairment provisions.

Other financial liabilities

The decrease in other financial liabilities reflects the equity settlement of the

Gairloch loans totalling R238.5 million (2013: R129.0 million), off-set by increases

in the amounts due to EERNL for its equivalent share of the cash collateral and

Nigdel United Oil Company Limited ("Nigdel") for OPL 233 work programme costs. The

amounts due to EERNL increased by foreign exchange losses totalling R9.7 million

(2013: R3.3 million), reflective of the weakening of the Rand against the US Dollar.

The amounts due to Nigdel increased by R17.9 million (2013: R2.4 million) representing

SacOil's share of OPL 233 seismic costs at the reporting date.

Current tax payable

The Group experienced significant liquidity challenges during the 2014 financial year

and was unable to settle foreign taxes payable. As a result taxes attributable to

disposals by the Group of exploration and evaluation assets and the declaration of

dividends in prior financial years remained outstanding and continued to accrue

interest during the 2014 financial year. Interest on taxes outstanding amounts to

R21.4 million (2013: R36.9 million). Foreign exchange losses total R47.5 million

(2013: RNil). The foreign taxes are denominated in US Dollars.

The Group's current tax charge for the year is R14.0 million (2013: RNil). The Group's

profit for the year was primarily driven by foreign exchange gains on transactions

with non-connected parties and interest receivable from EERNL.

CASH FLOWS

Cash totalling R39.1 million (2013: R24.7 million) was used to fund the Group's

working capital requirements, including but not limited to remuneration (R13.5 million),

consulting fees (R2.1 million), legal fees (R1.9 million), corporate costs

(R7.4 million), audit fees (R2.0 million), rentals (R1.1 million), travel and

accommodation (R1.4 million), and broker fees (R0.9 million).

The Group's investment of R63.2 million in the Botswana licences, OPL 233 seismic costs,

property, plant and equipment and intangible assets, off-set by the cash inflows from the

Group's loans and receivables of R14.8 million (primarily the part payment of

R13.8 million of the EERNL loan), resulted in net cash used in investing activities of

R48.4 million (2013: R0.9 million).

The Rights Offer proceeds of R336.6 million, together with the increase in the amounts

owed to Nigdel and EERNL, resulted in net cash from financial activities of

R355.9 million (2013: R101.5 million).

Consolidated Statement of Comprehensive Income

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

1 Basis of preparation

The consolidated annual financial statements of the Group for the year ended

28 February 2014 have been prepared in accordance with the Group's accounting

policies, which comply with the recognition and measurement criteria of

International Financial Reporting Standards, and the presentation and disclosure

requirements of IAS 34 - Interim Financial Reporting, the SAICA Financial Reporting

Guides as issued by the Accounting Practices Committee, the Financial Reporting

Pronouncements as issued by Financial Reporting Standards Council, the Listings

Requirements of the JSE Limited and the Companies Act of South Africa (No. 71 of

2008, as amended). The accounting policies applied in the preparation of the

results for the year ended 28 February 2014 are consistent with those adopted in

the financial statements for the year ended 28 February 2013, except as noted below.

The Group has adopted the following new standards and amendments to standards,

including any consequential amendments to other standards: IFRS 10 - Consolidated

Financial Statements, IFRS 11 - Joint Arrangements, IFRS - 12 Disclosure of Interests

in Other Entities, IFRS 13 - Fair Value Measurement, and Presentation of other

comprehensive income (Amendments to IAS 1). Application of these standards has not

had a material impact on the measurement of assets and liabilities of the Group,

but has resulted in additional disclosures.

These consolidated annual financial statements have been prepared on a going

concern basis.

All monetary information is presented in the functional currency of the Company,

being South African Rand.

2 Auditor's review report

The Group annual financial statements are the responsibility of the directors of

the Company. They have been prepared under the supervision of Tariro Mudzimuirema

CA (SA). These financial statements have been audited by Ernst & Young Inc., the

Group's auditors. The unqualified audit report includes an emphasis of matter

paragraph, which refers to the directors' disclosure in note 9 which indicates

conditions which give rise to a material uncertainty which may cast significant

doubt on the Company's ability to continue as a going concern. The audit report

is available for inspection at the Company's registered office and is available in

the integrated annual report, which is available on the Company's website.

3 Segmental reporting

The Group operates in five geographical locations, which form the basis of the

information evaluated by the Group's chief decision-maker. For management purposes

the Group is organised and analysed by these locations. These locations are:

South Africa, Nigeria, DRC, Botswana and Malawi. Operations in South Africa relate

to the general management, financing and administration of the Group.

Business segments

The operations of the Group comprise one class of business, being oil and gas exploration and development.

* Shares issued to various shareholders under the terms of the Rights Offer that

closed on 27 January 2014. 1 219 302 642 (98%) of these shares were issued to

the Government Employees Pension Fund.

Exploration and evaluation commitments will be funded

through a combination of debt and equity funding.

Performance bond

In April 2012 the Group posted a $25 million performance bond to support the work

programme on OPL 233. This performance bond is secured by a cash collateral of

R108.1 million (2013: R89.1 million) ($10 million). The remainder of the performance

bond, disclosed as a contingent liability, is secured by a first-ranking legal

charge over SacOil's investment in SacOil 233 Nigeria Limited.

Cost carry arrangement

The farm-in agreement between Semliki and Total provides for a carry of costs by

Total on behalf of Semliki. Total will be entitled to recover these costs, being

Semliki's share of the production costs on Block III, plus interest, from future

oil revenues. The contingency becomes probable when production of oil commences

and will be raised in full at that point. At 28 February 2014 Total has incurred

R36.5 million (2013: R20.4 million) of costs on behalf of Semliki. Should this

liability be recognised, a corresponding increase in assets will be recognised,

which, together with existing exploration and evaluation assets, will be recognised

as development infrastructure assets.

Farm-in and transaction fees

OPL 233

A farm-in fee of R114.3 million (2013: R93.7 million) (US$10.6 million) is due to

Nigdel United Oil Company Limited upon the formal approval by the Nigerian Government

of the assignment of title to OPL 233 to SacOil 233 Nigeria Limited. A transaction

fee of R27.0 million (2013: R22.1 million) (US$2.5 million) is due to Energy Equity

Resources (Norway) Limited upon the receipt of title to OPL 233, pursuant to the

provisions of the Master Joint Venture Agreement.

OPL 281

A farm-in fee of R129.4 million (2013: R106.1 million) (US$12 million) is due to

Transnational Corporation of Nigeria Limited upon the formal approval by the Nigerian

Government of the assignment of title to OPL 281 to SacOil 281 Nigeria Limited. A

transaction fee of R27.0 million (2013: R22.1 million) (US$2.5 million) is due to

Energy Equity Resources (Norway) Limited upon the receipt of title to OPL 233,

pursuant to the provisions of the Master Joint Venture Agreement.

8 Dividends

The Board has resolved not to declare any dividends to shareholders for the period

under review.

9 Going concern

The planned recapitalisation of the Company, as previously announced to shareholders,

was completed in January 2014. The Company converted all the Gairloch loans into

equity and is now debt free. Furthermore, the Company raised R336.6 million from

the R570 million Rights Offer, which will enable the Group to fund its operations

for the foreseeable future. Although the above transactions were a success a deficit

of R90 million remains in the Group's projected cash flows to June 2015, which is

indicative of part of the shortfall from the Rights Offer. To manage the Group's

non-performance risk in funding its assets and commitments, management is in early-

stage discussions with financial institutions regarding the raising of equity and debt

funding to eliminate or manage the deficit. The likelihood of success of this

initiative remains uncertain at this stage.

The cash flow projections to June 2015 also include cash inflows from EERNL totalling

R189.8 million (US$17.9 million). The loan owed to SacOil remains overdue since

31 May 2013. EERNL has requested a further extension of the loan to July 2014

whilst it undergoes its own recapitalisation, which will enable it to settle in

full the amounts owed to SacOil. It is difficult to determine with certainty the

outcome of the planned recapitalisation and, consequently, the settlement of the

loan owed to SacOil. The Board continues to assess the benefit of enforcing the

security provided by EERNL, being EERNL's shares in its subsidiary EER 233 Nigeria

Limited which owns a 20% interest in OPL 233.

The above conditions give rise to material uncertainties which may cast significant

doubt about the Company's ability to continue as a going concern, and therefore

that it may be unable to realise its assets and discharge its liabilities in the

normal course of business. The Board remains reasonably confident that it will

manage the material uncertainties that exist, as such the financial statements

have been prepared on the basis of accounting policies applicable to a going

concern. This basis presumes that funds will be available to finance future operations

and that the realisation of assets and settlement of liabilities, contingent

obligations and commitments will occur in the ordinary course of business.

10 Events after the reporting period

The following event took place from the period 1 March 2014 to the date of this

report:

On 31 March 2014, the Company, the Public Investment Corporation (SOC) Limited

("PIC") and the Instituto De Gestao Das Participacoes Do Estado ("IGEPE") entered

into a Memorandum of Understanding ("MoU") intended to regulate the relationship

between the parties with regard to:

- assuring the supply of natural gas and energy security, and opening up and growing

the industrial and domestic consumer market for natural gas across Mozambique;

- establishing joint venture companies to, inter alia, build an onshore natural gas

central processing facility, a pipeline to link the gas fields in Mozambique with

potential customers in southern Africa (referred to as the "African Renaissance

Project" or "ARP") and to develop and grow the natural gas consumer market in

South Africa and other Southern African Development Community member states for

the supply and distribution of natural gas along the pipeline in Mozambique

(referred to as "Gas for the People Project" or "GPP"); and

- establishing ancillary projects such as, but not limited to, a gas-to-liquid

plant and a combined cycle gas power plant.

Importantly, both the ARP and GPP are long-term projects, and are subject to,

amongst other matters, feasibility studies, front-end engineering design, detail

engineering, market analysis, social impact studies, the conclusion of joint

venture agreements by 30 July 2014 or such later date as agreed to in writing by

the parties, and the raising of the funding required for the projects. The

feasibility studies are subject to the approval of the Boards of directors of each

of the PIC and SacOil and satisfaction of any other applicable approval processes

of these parties.

On 10 March 2014, Transfer Holdings (Proprietary) Limited became a wholly-owned

subsidiary of SacOil following the acquisition of a further thirty per cent (30%)

interest.

On 2 May 2014 Transnational Corporation of Nigeria PLC ("Transcorp") and the

Nigerian National Petroleum Corporation signed the Production-sharing Contract for

OPL 281. Transcorp, as operator of OPL 281, will now proceed to prepare and lodge

an application to seek the approval of the Nigerian Government for Transcorp to

assign a 20% participating interest to SacOil's wholly-owned subsidiary,

SacOil 281 Nigeria Limited.

By order of the Board

Roger Rees

Acting Chief Executive Officer

Johannesburg

28 May 2014

CORPORATE INFORMATION

Registered office and physical address:

2nd Floor, The Gabba

Dimension Data Campus

57 Sloane Street

Bryanston

2021

Postal address:

PostNet Suite 211

Private Bag X75

Bryanston

2021

Contact details:

Tel: +27 (0) 11 575 7232

Fax: +27 (0) 11 576 2258

E-mail: [email protected]

Website: www.sacoilholdings.com

Directors:

Roger Rees (Acting Chief Executive Officer), Tariro Mudzimuirema (Interim Finance

Director), Tito Mboweni (Chairman)*, Mzuvukile Maqetuka*, Gontse Moseneke**,

Stephanus Muller*, Vusumzi Pikoli*, Ignatius Sehoole**, Danladi Verheijen**,

Titilola Akinleye**

* Independent Non-executive directors ** Non-executive directors

Advisers

Company Secretary: Fusion Corporate Secretarial Services (Proprietary) Limited

Transfer Secretaries South Africa

Link Market Services South Africa (Proprietary) Limited

Transfer Secretaries United Kingdom

Computershare Investor Services (Jersey) Limited

Corporate Legal Advisers

Norton Rose Fullbright South Africa

Auditors

Ernst & Young Inc.

JSE Sponsor

Nedbank Capital, a division of Nedbank Limited

AIM Nominated Adviser

finnCap Limited