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Current CAK Stock Info

CAMAC Energy Inc. (ticker: CAK) is a U.S. based oil and gas company engaged in the exploration of offshore oil and gas leases in deep water Nigeria. The Company was founded in 2005 and has offices in Houston, Texas, Nairobi, Kenya, Banjul, Gambia and Lagos, Nigeria.

CAMAC Energy Inc. announced two major company milestones on November 20, 2013. CAK has agreed to purchase the remaining economic interests that it does not currently own in Oil Mining Leases (OML) 120 and 121, including the Oyo Field, for $270 million. The assets were acquired from Allied Energy Plc, its wholly owned subsidiary. CAMAC will issue 497,454,857 shares of common stock, issue a $50 million convertible subordinated note and pay $170 million cash for the exchange. Following this transaction, CAMAC will  hold a 100% economic interest in the OML 120 and 121 and will be the technical operator.

In addition, CAMAC has reached an agreement to list its common stock on the Johannesburg Stock Exchange (JSE). The company will receive US$270 million equity investment through a private placement of 376,884,422 shares of common stock. In exchange, the Public Investment Corporation (PIC) Limited of South Africa will receive an approximate 30% ownership interest in the Company. JSE, whose headquarters is in South Africa, is the largest stock exchange in Africa. CAK currently has approximately 157 million shares listed on the NYSE Market, as of November 21, 2013; OAG360 notes that the company made no announcement regarding any changes to its US listing. An undisclosed portion of the JSE equity investment will be used to finance the Oyo field purchase. CAK will be required to declare a dividend equal to approximately 1.435 shares per share outstanding.

Pro forma for the listings and agreements, CAMAC’s subsidiaries, including Allied Energy, will hold 56.97% of CAK ownership. The PIC will hold 30% and existing shareholders will account for 13.03%.

Investing Heavily in the Oyo Field

CAK confirmed three intervals of Miocene hydrocarbons in its Oyo-7 well in an announcement on November 18, 2013. Logging while drilling data revealed the discovery in OML 120 – the first time the formation has been found in the area. The Miocene is the most prolific producing zone offshore Nigeria and Shell’s  (ticker: RDS.B) Bonga field has produced 450 MMBO since the area was brought online in 2005.

Current production from the 120 and 121 blocks is roughly 2 MBOPD. The company anticipates completing both the Oyo-7 and Oyo-8 wells by mid-2014 and expects to produce 14 MBOPD purely from the Pliocene, with 7 MBOPD per well.

In a conference call on November 18, 2013, management said additional capital expenditures and guidance will be provided once the two wells are completed. The Oyo-9 is spud but its future plans have not been directly addressed. The company wants to mitigate risk and it is actively searching for a financial partner to join in its deepwater projects.

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Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.