Sacoil advises that its basic loss per share is seen at 6.76 cents to 6.79 cents on Aug. 31. Net asset value per share is seen at between 19.58 cents and 22.39 cents.
"Shareholders are referred to the announcement released on the Johannesburg Stock Exchange News Service ("SENS") and the Regulatory News Service of the London Stock Exchange ("RNS") on 18 November 2016 in which the Company advised that earnings per share and headline earnings per share for the six months ended 31 August 2016 are expected to be at least 20% lower relative to the prior comparative period ("the Announcement")," it said.
"A significant component of the Group's asset base is denominated in United States Dollars ("US$"). The recovery of the Rand against the US$ during the period resulted in foreign exchange losses of R62 million which eroded this asset base.
"Future developments within the currency markets will continue to impact the Group's assets. In comparison, the results of the Group for the six months ended 31 August 2015 included foreign exchange gains totalling R57.5 million arising from the weakening of the Rand against the US$ during the period.
"These gains which arose from the revaluation of the US$ asset base contributed to the overall profit recorded by the Group for the period ended 31 August 2015."
IMPAIRMENTS OF FINANCIAL ASSETS
"The SacOil Board of directors continues to pursue the recovery of US$19.1 million (R277.4 million as at 31 August 2016) owed to the Group by Transcorp pursuant to the termination of the Group's participation in OPL281.
"Inherently litigation is a protracted process which often leads to delays in the resolution of outstanding matters. Our legal counsel has estimated that the matter will likely be resolved during the first half of 2018. This delay has affected the valuation of the receivable and a provision for impairment of R48.1 million has been recognised to take into account the impact of the time value of money.
"For the duration of the Encha Acknowledgement of Debt Agreement ("the Agreement"), as provided for therein, the Company received certificates from Encha's auditors which confirmed at each reporting date that the net asset value of the Encha Group exceeded R100 million as a basis to support the recoverability of the amount owed.
"Since the expiry of the Agreement and the subsequent default by Encha on its obligations, this information has not been made available to the Company to enable a complete assessment of the financial position of the Encha Group.
"Information available to enable an assessment of the recoverability of the R115.8 million owed to the Company as at 31 August 2016 was therefore limited to information available in the public domain on Encha's asset base.
"This information however does not provide visibility of Encha's liabilities to enable a complete assessment of the net asset position as at 31 August 2016. A provision for impairment of R115.8 million has therefore been raised.
"The results of the Group as at 31 August 2015 included an impairment provision of R26 million with respect to the Block III contingent consideration receivable relative to the Encha and Transcorp impairment provision of R164 million as highlighted above.
"In an effort to optimise the production profile of the Lagia Oil Field in Egypt, we conducted thermal stimulation on existing wells on the field. Despite these operations, the field's technical performance remains below expectations.
"Financial performance of the asset was also negatively affected by the developments in the global markets with respect to oil prices and exchange rates which resulted in Lagia contributing lower than expected revenue of R3.2 million despite an increase of R2.7 million in operating costs associated with steaming operations."
At 9:18am: (LON:SAC) Sacoil Hldgs Ltd share price was -0.25p at 0.63p