[Egypt] Sacoil completes first phase of Lagia Oil field development operations

SacOil Holdings Limited through its subsidiary Mena International Petroleum Company Limited ("Mena") is pleased to announce the successful on-time completion of phase 1 of the field development operations at the Lagia oil field in Sinai, onshore Egypt.

As previously reported, the aim of phase 1 was to stimulate and re-complete the five existing production wells at the Lagia oil field in order to increase production.

Operations commenced on the 4^th January 2015 and initial production indications are positive and the Company is confident that the targeted average production of 350 barrels of oil a day will be achievable from these five wells once they are in sustained production.

The oil produced from the Lagia field is trucked to the GPC (General Petroleum Company) facilities, which is owned by Egyptian General Petroleum Corporation, approximately 300 km from the Lagia field. Payments for delivered crude are paid directly to Mena.

Following the successful completion of phase 1 the wells remain on production and SacOil is preparing and planning a second phase of field development and production optimisation to start by June 2015. This second phase includes the installation of steam facilities for a thermal recovery process on the existing production wells and the drilling of up to five additional thermal wells at the Lagia oil field, with the intent of further enhancing production and the recovery of oil at the oil field.

Commenting on the completion of phase 1 development operations, Dr Thabo Kgogo, SacOil CEO, said, "This success of our development operation at the Lagia oil field is a key milestone for SacOil. It marks our transformation from an exploration and production company into realizing revenues from the sale of crude oil. The next phase of our operations at the Lagia oil field will focus on increasing production, as well as maintaining cost efficiencies and profitability during this oil price cycle.”

“The lower oil price environment is something we are obviously following very closely. For the time being our net cash position remains positive and we remain committed to our strategic focus of portfolio rationalization, capital restructuring and overall cost savings.”

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