Crude Oil ( ) Brent Crude ( ) Natural Gas ( ) S&P 500 ( ) PHLX Oil ( )
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.

On December 9, 2013, CAMAC Energy announced the signing of a letter of intent for a long-term drilling contract with Northern Offshore Ltd (ticker: NOF.OL). A long-term drilling contract answers many long-standing questions about CAMAC’s future development prospects in that investors have been patiently waiting for such an announcement, which could be perceived to be the long-term catalyst the company needs to accelerate its organic production and reserves growth.  For a company of CAMAC’s size, OAG360 notes the significance of this development as the latest in a series of positive announcements from the company.

The letter of intent provides an initial contract period of one year with the option for a one year extension, and both parties are working towards a more definitive contract before year-end 2013. The Energy Searcher drillship will be delivered to CAK’s properties in the Oyo Field offshore Nigeria in OML Block 120 and is expected to arrive in the first half of 2014. The contract value is approximately $100 million per year, excluding mobilization fees.

Northern Offshore, Ltd. is a Bermuda holding company which operates offshore oil and gas drilling units and one production vessel. The Energy Searcher rig is its only drillship and has a drilling depth of 25,000 feet. It was constructed in 1982 and received upgrades in both 2011 and 2012. A full list of vessel specifications can be found here.

On December 10, 2013, CAMAC announced the offering of up to $300 million in senior notes due in 2018. The company anticipates using the proceeds to develop its Oyo Field operations. The recent developments follow closely on the heels of the company’s announcement of a new strategic investor and pending stock listing on the Johannesburg Stock Exchange.

Oyo Field Production Heating Up…

CAMAC Energy has invested heavily in its Oyo Field through acquisitions and testing. On November 20, 2013, the company announced the purchase of remaining economic interests in OML Blocks 120 and 121, leaving CAK with a 100% working interest in the area. One week before the acquisitions, CAK confirmed the presence of hydrocarbons in the Miocene formation of Block 120. The formation had not yet been discovered in the Block and is regarded as the most prolific play offshore Nigeria. Shell’s (ticker: RDS-B) nearby Miocene-producing Bonga field has produced 450 MMBO since being brought online in 2005.

CAMAC currently produces 2 MBOPD from its blocks but expects production to jump to 14 MBOPD by mid-2014. The Energy Searcher will be used to exploit the Oyo-7 and Oyo-8 wells, resulting in anticipated production of 7 MBOPD for each well for a total of 14 MBOPD. In its Q3’13 conference call, CAK said it was searching for a dedicated driller and would finalize its 2014 drilling and capital expenditures program once a contract is reached; it would appear the company has achieved this milestone and OAG360 would expect CAMAC to finalize and announce it’s 2014 capital program in the relatively near future. CAMAC Energy expects to develop the Oyo-9 and possibly drill into the Miocene before the end of Q3’14.

Reserves Report Issued

Category

Gross Oil (MM)
in Barrels

CAMAC Net Entitlement
Oil (MM) in Barrels

(1P) Total Proved

10.85

2.8

(2P) Proved + Probable

14.05

3.7

(3P) Proved + Probable + Possible

32.10

7.9

On December 5, 2013, CAMAC announced the completion of a report detailing the company’s reserves and resources in Nigeria, Gambia and Kenya. The report, prepared by Gaffney, Cline & Associates, revealed approximately 10.85 MMBO gross total proved reserves. The company predicts $194 million in 2014 capital expenditures for Oyo operations on wells 7 and 8. An additional $87 million is estimated for the Oyo-9, which is due for start-up in August 2015.

[sam_ad id=”32″ codes=”true”]

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. The company or companies covered in this note did not review the note prior to publication. 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.

Tags: ,

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.