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CAMAC Energy, Inc. (CAK) Conducts Frontier Oil Exploration in 4 Key African Countries
In its 28-year existence, CAMAC Energy has transitioned from a private agricultural commodities trading company to a publicly traded company with dual-listing on the New York Stock Exchange and the Johannesburg Stock Exchange. Today, the Houston-based independent oil and gas exploration and production company operates a portfolio of nine exploration and production assets across Nigeria, Ghana, Kenya and Gambia, Africa.
With more than 167 million inhabitants, Nigeria is the most populous country within the Organization of the Petroleum Exporting Countries (OPEC) and is Africa’s leading oil and gas producer. CAMAC’s Oyo Field is located in deepwater (200-500 meters) approximately 46 miles offshore Nigeria. In the first quarter of 2014, CAMAC reported the arrival of the Northern Offshore Energy Searcher drillship, and said it expects first production on the Oyo-8 well in October. From there, the drilling rig will move to complete and hook-up Oyo-7, with first production from the well expected before year-end.
Offshore oil deposits were discovered in Ghana, West Africa’s second-largest economy, in 2007, with commercial production following suit a short three years later. Ghana has proved oil reserves of 660 million barrels, and oil production in the country is expected to more than double to 250,000 barrels per day by 2021, according to Bloomberg. It is here that CAMAC operates under a Petroleum Agreement with the Government of Ghana covering the Expanded Shallow Water Tano (ESWT) block. The block is located in the Tano Basin offshore Ghana, where significant volumes of oil and gas have been discovered. Under this work program, CAMAC has partnered with a leading global independent petroleum consulting firm to assist with a required nine-month evaluation of the discovered fields’ economic viability. CAMAC Energy Ghana Ltd., CAMAC’s indirect 50%-owned subsidiary, is the operator of the ESWT block with a 60% participating interest.
Oil was discovered in the Turkana District of Kenya in March 2012. By May, CAMAC was awarded Blocks L1B and L16 onshore, and Blocks L27 and L28 offshore, and in August 2012 became the named operator with 100% net interest. The Kenyan government has the option to participate up to 20% upon development. Onshore, CAMAC has completed its Gravity and Magnetic Survey as well as an Environmental and Social Impact Assessment Study, and has submitted an “Invitation to Tender” request to active seismic companies in the region. Offshore, the company has acquired multi-client 2D seismic with processing currently underway; results from 2D interpretation will be used to outline the location for a 3D seismic acquisition expected in 2014/2015. The company is also building a dataset for a Geological and Geophysical Study of its offshore sites.
Gambia is one of Africa’s smallest countries, and due to poor soil quality is heavily dependent on peanut exports. Despite a long history of oil exploration in Gambia, oil has yet to be produced in the small country. Yet, the government believes “that oil not only exists in The Gambia, but exists in very large quantities,” according to an earlier statement by President Yahya Jammeh, who has voiced his desire to turn Gambia into an oil-producing state. CAMAC is participating in this quest, conducting frontier exploration activities offshore Gambia on Blocks A2 and A5. For 2014, CAMAC Energy is reprocessing existing 2D seismic; a regional geologic study and possible 3D seismic survey are also planned. The company anticipates that the first offshore exploration well in Gambia will be drilled in 2016.
CAMAC’s presence in the growing African oil industry demonstrates the company’s ability to identify and acquire attractive exploration assets, produce revenue and production growth, and form key partnerships and agreements in the countries in which it conducts exploration activities.
In the first quarter of 2014, CAMAC recorded revenues of $19.9 million on daily net production of 1,700 barrels of oil, net of royalties, for per barrel revenue of $109.11. CAMAC’s plan is to end 2014 with an estimated production rate of 14,000 barrels of oil per day from its Nigeria assets. The company posted a net loss of $4.6 million for the quarter, and reported cash on hand of approximately $70 million.
CAMAC is already calling 2014 a transformational year, inclusive of the first-quarter $270 million private equity investment from Public Investment Corp. for acquisition funding and drilling capital. For the remainder 2014, CAMAC is focused on increasing current production for revenue growth and following up on opportunistic acquisitions and strategic partnerships to further strengthen its expanding portfolio and exploration activities.
For more information visit www.camacenergy.com
