CAMAC Energy Acquires Interest Offshore Nigeria

Source: www.gulfoilandgas.com 8/11/2010, Location: Africa

CAMAC Energy Inc. announced that on August 6, 2010, the Company entered into a memorandum of understanding (the “MOU”) with CAMAC Energy Holdings Limited, CAMAC International (Nigeria) Limited, and Allied Energy Resources Nigeria Limited (collectively, “CAMAC”). Pursuant to the MOU, the Company plans to acquire CAMAC’s full interest in Oil Mining Leases 120 and 121 (the “Leases”) located offshore Nigeria. The Company and CAMAC have agreed to work to finalize negotiations and related due diligence with CAMAC with a goal of entering into a definitive agreement for the acquisition of this interest by the Company on or before October 15, 2010.

The Company’s Interim CEO Mr. Bill Dozier, commented “This potential acquisition builds on our strategy to add assets with multiple development prospects that offer potential for the addition of significant oil and gas reserves to the Company. We are currently conducting our own independent evaluation of these Leases. Assuming confirmation of the significant oil and gas reserve potential, we plan to aggressively move forward with finalizing and signing definitive documentation and consummating this acquisition. We are very excited about the growth opportunities this acquisition could bring to our Company. This builds upon the successful movement by the Company to a cash flow positive position which we announced yesterday in our second quarter results and which is further elaborated in my Letter to Shareholders.

Description of Oil Mining Leases 120 and 121

The OML 120 Lease is located directly east of OML 133, which contains the giant 500 million barrel Erha Field, and north of OML 121, where gas has already been found by CAMAC. OML 120 covers an area of 916.6 sq km in water depths ranging from 150 to 1000 meters. Extensive 3D seismic has been completed over OML 120 which contains the Oyo Oilfield, which is a defined oilfield located within OML 120, and was previously acquired by the Company from CAMAC in April 2010. The acquisition proposed under the MOU would result in the Company’s acquisition of CAMAC’s remaining interests in the OML 120 Lease.

One shallow well has been drilled outside the Oyo Oilfield on Lease 120 that contained oil in the upper Miocene interval. Current investigation is being conducted by CAMAC in the same area to drill a new well into the deeper main productive horizons of the Middle Miocene interval.

The OML 121 Lease covers an area of 887 sq km in water depths ranging from 150 to 1000 meters located directly south of Lease 120. This Lease is completely covered by a newly acquired 3D seismic survey and one well was drilled in 2008 that was shown to contain over 90 feet of net gas pay in two separate reservoirs. In addition, several other prospects have been identified on the Lease 121.

Internal mapping by CAMAC has identified at least eight new prospects in both the OML 120 Lease and the OML 121 Lease. Collectively, these prospects have been estimated to contain over 500 million barrels of gross un-risked oil resources as well as upside gas potential and are currently being assessed by an independent third party. Additional prospects and leads are still currently under evaluation.


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Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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