The Board of SacOil report that the joint venture between SacOil and Energy Equity Resources Limited (EER) (collectively the “Joint Venture”) has concluded a second farm-out agreement, in this instance with Transnational Corporation of Nigeria PLC of Nigeria (“Transcorp”) relating to OPL 281, Nigeria.

Highlights

• Subject to consent by Nigerian National Petroleum Corporation (“NNPC”) and the Honourable Minister of Petroleum Resources (on behalf of the Federal Government of Nigeria (“FGN”)),the Joint Ventureshall acquire 40 per cent of Transcorp’s 100 per cent participating interest in the Production Sharing Contract (“PSC”) for OPL 281. SacOil’s direct interest in OPL281 will be 20 per cent.

• SacOil has paid to the Federal Government of Nigeria (“FGN”), on behalf of the Joint Venture and Transcorp, an outstanding signature bonus amount of US$8.75 million. SacOil has also paid US$3.75 million to Transcorp as the first tranche farm-in fee. SacOil payments are secured by, inter alia, corporate guarantees from Transcorp.

• Transcorp shall proceed to negotiate and execute a PSC with the NNPC – Concession holder on behalf of the FGN.

• The Joint Venture together with Transcorp have agreed to pursue an accelerated development plan (subject to NNPC and DPR approval) for hydrocarbons on OPL 281.

• This agreement is the second significant oil and gas deal entered into by the Joint Venture.

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