CAMAC Energy Inc. (NYSE Amex: CAK),
a U.S.-based energy company engaged in the exploration, development
and production of oil and gas, today announced that it has been
informed that Nigerian Agip Exploration (“NAE”),[ a subsidiary of
Eni SpA (“Eni”)], its partner in Nigerian OMLs 120 and 121 (the
“OMLs”), has signed a definitive agreement to divest its 40%
working interest in the OMLs to Allied Energy PLC (“Allied”), an
affiliate of the Company’s largest shareholder. According to NAE,
the transaction is subject to customary conditions for closing and
is expected to conclude during the first quarter of 2012.
The Company has also been informed that following the closing,
Allied plans to expedite the development of Oyo Field by drilling
two additional production wells commencing in 2012. These two wells
are expected to significantly increase oil production over current
levels. It is the Company’s understanding that Allied also intends
to accelerate exploration activities in the OMLs to fully exploit
potential outside of Oyo Field, independently estimated at up to
two billion barrels of unrisked prospective oil resources.
As part of its West African regional growth strategy, the
Company is also announcing today that it has reached agreement on
commercial terms with two national oil companies to acquire three
offshore exploration licenses covering three blocks (“license
blocks”). Per the agreed terms, CAMAC Energy will be the operator,
with majority working interests in each of the license blocks. The
license blocks are located in the highly prospective West African
Transform Margin, home to several recent major discoveries in Ghana
(Jubilee, Odum) and Sierra Leone (Venus, Mercury) and a core focus
area for the Company’s expansion efforts. All terms and final award
of the license blocks are subject to the final governmental
approvals and signing of production sharing contracts, which are
expected in the first quarter of 2012. Full details are expected to
be released at that time.
Finally, the Company is announcing that it has signed a
definitive agreement with the principal shareholders of Avana
Petroleum Limited, a private Isle of Man company (“Avana”), that
following completion of the transactions contemplated by the
agreement will result in the acquisition of 100% of the issued
share capital of Avana. The total purchase price is US$15 million,
payable in shares of the Company’s common stock in three tranches,
with the first tranche of US$10 million payable upon completion and
the second and third tranches of US$2.5 million payable at
six-month intervals following completion. The transaction is
subject to a number of conditions to closing and is expected to
conclude during the first quarter of 2012.
Avana’s primary asset is a 25% participating interest in an
approximately 15,000 km2 (3.7 million acre) shallow water
exploration area in the Seychelles Islands operated by its partner
East Africa Exploration, a wholly owned subsidiary of Afren Plc
(“Afren”). The acreage has been independently estimated to contain
464 million barrels of oil equivalent of gross prospective
resources. Additionally, Avana is finalizing the acquisition of a
10% interest in an exploration block offshore Kenya operated by
Dominion Petroleum Limited (“Dominion”). The production sharing
contract for the 5,110 km2 (1.3 million acre) exploration area was
awarded to the partners in May 2011 and final Government approval
is expected in the first quarter of 2012.
As part of the transaction, Sam Malin, CEO of Avana Petroleum
will join CAMAC Energy as a business development consultant focused
on securing additional assets in prospective East African
basins.
Chairman and CEO, Kase Lawal, commented “Since assuming the role
of CEO earlier this year, I consistently reiterated two primary
goals for CAMAC Energy during 2011. The first was to remove
uncertainty with regards to our Nigerian OMLs 120 and 121 by
defining and accelerating a development and exploration program.
The second goal was to expand our asset footprint by acquiring
high-impact exploration acreage in emerging frontier basins in
Sub-Saharan Africa.”
“With today’s announcements, we believe we have made significant
progress towards both goals. First, we are very pleased that NAE
has agreed to sell its interest in the OMLs to Allied, which has
subsequently committed to a two well drilling program commencing in
2012. We expect this new clarity to help unlock the value of both
our reserves and prospective resources in OMLs 120 and 121.
Secondly, we are in the process of acquiring highly sought after
assets in the West African Transform Margin and the East Africa
offshore region. Each of these areas is considered among the
world’s most exciting emerging hydrocarbon provinces. These new
properties will open a new chapter for CAMAC Energy as an operator
with ability to control the pace of exploration and
development.”
Lawal added, “2011 has been a year of immense challenges and
opportunities for CAMAC Energy, and we are pleased to exit the year
with very positive momentum towards our goal of creating
significant shareholder value. We look forward to updating you
further on these developments in early 2012, and most importantly,
continuing to execute our vision of building a leading
African-focused exploration and production company.”
About CAMAC Energy Inc.
CAMAC Energy Inc. (NYSE Amex: CAK) is a U.S.-based energy
company engaged in the exploration, development and production of
oil and gas. The Company currently has operations in Nigeria and,
through its Pacific Asia Petroleum subsidiaries, in China. The
Company's principal assets include interests in OML 120 and OML
121, offshore oil leases in deepwater Nigeria that started
production from the Oyo Oilfield in December 2009, and a 100%
interest in the Zijinshan Block gas asset located in the Shanxi
Province, China. The Company was founded in 2005 and has offices in
Houston, Texas, Beijing, China, and Lagos, Nigeria.
About Avana Petroleum
Limited
Avana Petroleum Limited is an independent oil and gas
exploration group incorporated in the Isle of Man in 2007 whose
core area of interest centers on the western Indian Ocean and East
African margin, which Avana has strategically recognized and
selected as they are considered highly prospective and amongst the
last underdeveloped hydrocarbon frontiers relatively unexploited on
a commercial scale. Key members of the Avana team have been active
in the region since the early 1990s and before. Also, several team
members were instrumental in the identification of the economic
potential of Madagascar’s heavy oil resources and the subsequent
appraisal of these assets moving them towards eventual
development.
Forward-Looking
Statements
This press release contains certain statements that may include
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933, as amended (the “Securities Act”), and
Section 21E of the Securities Exchange Act of 1934, as amended. All
statements, other than statements of historical fact, are
“forward-looking statements,” including statements regarding the
Company’s proposed transactions, business strategy, plans and
objectives and statements of non-historical information. These
forward-looking statements are often identified by the use of
forward-looking terminology such as “will,” “should,” “believes,”
“expects,” “anticipates” or similar expressions, and involve known
and unknown risks and uncertainties. Although the Company believes
that the expectations reflected in these forward-looking statements
are reasonable, they involve assumptions, risks and uncertainties,
and these expectations may prove to be incorrect. You should not
place undue reliance on these forward-looking statements, which
speak only as of their respective dates. Risks and uncertainties
regarding the transactions described herein include the possibility
that the parties are unable to reach final agreement, that
necessary governmental approvals are not received, that the closing
of the transactions does not occur, either due to the failure of
closing conditions, rights of the parties to terminate the
definitive agreements, or other reasons, risks that the
transactions disrupt current plans and divert management from
day-to-day operations, and the amount of the costs, fees, expenses
and charges related to the transactions. In addition, the Company’s
actual results could differ materially from those anticipated in
these forward-looking statements as a result of a variety of other
factors including those discussed in the Company’s periodic reports
that are filed with and available from the Securities and Exchange
Commission (“SEC”). All forward-looking statements attributable to
the Company or persons acting on its behalf are expressly qualified
in their entirety by these factors. Other than as required under
the securities laws, the Company does not assume a duty to update
these forward-looking statements.
Other Matters
The SEC permits oil and gas companies, in their filings with the
SEC, to disclose only “reserves,” as that term is defined under SEC
rules. We use the terms “prospective oil resources” and “gross
prospective resources” in this press release in reference to
certain oil and gas interests, which the SEC’s guidelines do not
permit us to include in our filings with the SEC.
Nothing herein shall be deemed to constitute an offer to
sell, or the solicitation of an offer to buy, any securities of the
Company. Any securities issued in connection with the transactions
described herein will not be registered under the Securities Act
and may not be offered or sold in the United States absent
registration or an applicable exemption from registration
requirements.
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