Provides Operational Update on its West and East Africa Operations
HOUSTON - Friday, March 13th 2015 [ME NewsWire]
(BUSINESS WIRE) -- CAMAC Energy Inc. (“CAMAC” or the “Company”) (NYSE MKT:CAK) announced today financial and operational results for the year ended December 31, 2014.
Successfully drilled the Oyo-8 well and encountered four new oil and gas reservoirs;
Acquired 100% economic interest in OMLs 120 and 121 offshore Nigeria;
Increased unrisked P50 recoverable resource estimates of four top-priority exploration prospects offshore Nigeria fivefold;
Completed a $270 million private placement with the Public Investment Corporation (SOC) Limited;
Secured a $100 million credit facility;
Signed a Petroleum Agreement with the Government of Ghana for the Expanded Shallow Water Tano Block;
Commenced a secondary listing on the Johannesburg Stock Exchange.
The Oyo field averaged 1,300 barrels of oil per day (bbls/d). Oyo-8 was successfully drilled to a total depth of 6,059 feet, and encountered four new oil and gas reservoirs with a total gross hydrocarbon thickness of 112 feet, based on results from the logging-while-drilling data, reservoir pressure measurement, and reservoir fluid sampling. The Company commenced and is near completion of the Oyo field facilities expansion, which will allow for increased production from the Oyo development program. Flowlines and other subsea equipment from Oyo-5 and Oyo-6 were installed and tested on the Oyo-7 and Oyo-8 wells to facilitate the tie-in of production from the two wells.
CAMAC high-graded four of the prospects in OMLs 120 and 121 to drill-ready status, which target a combined 2,377 million barrels of oil, P50 recoverable resources. Three of these prospects will target the highly-prolific Miocene formation confirmed in the exploration portion of the previously drilled Oyo-7 development well. The Company plans to drill the first of these Miocene prospects in 2015 and is in active discussions with potential farm-in partners.
In December 2015, the Company entered into a contract with a unit of Transocean Ltd. for the drilling rig Sedco Express and is currently using this rig to horizontally complete the Oyo-8 well. The rig will then move to the Oyo-7 location to commence completion operations on the Oyo-7 well.
In April 2014, the Company signed a Petroleum Agreement relating to the Expanded Shallow Water Tano block located in the Tano Basin offshore Ghana. CAMAC signed the Joint Operating Agreement with its joint venture partners in January 2015. The Company has been named operator, holds a 30% interest, and has commenced work towards determining commerciality of the three previously-discovered fields. Additionally, in light of recent nearby discoveries and related regional play concepts, CAMAC is studying possible exploration targets in the block.
The Company made good progress in Kenya during 2014. An Environmental and Social Impact Study was initiated and completed in March 2014. Subsequently, 2-D seismic was acquired on offshore blocks L27 and L28 and on the onshore blocks L1B and L16. The Company has thus completed 2-D seismic acquisitions covering both offshore blocks, and both onshore blocks. These four blocks cover a total of nine million acres.
A regional geological and geophysical study on the L27 and L28 offshore blocks by Robertson Research is also ongoing and expected to be completed in mid-2015. The Company is currently making plans to acquire 2-D seismic on the offshore portion of block L-16, but has essentially satisfied the work obligations of the initial exploration period required by the licence agreement.
In April 2014, the Company completed a regional geology and geophysical study of offshore blocks A2 and A5. CAMAC’s next step is to acquire 3-D seismic over the most promising areas and has contracted with Polarcus for the 3-D seismic acquisition. CAMAC is engaged in active discussions with the government of The Gambia to extend the exploration period of the licenses, which it believes will be successful, and is also in discussions with a potential partner to farm-out a portion of its rights under the licenses.
Results of Operations
For 2014, CAMAC reported a net loss of $96 million, or $0.08 per basic and diluted share. Revenues were $53.8 million, or $106.41 per barrel, on average production of 1,300 barrels of oil per day, net of royalties. There was no production in the fourth quarter 2014 due to the shut-in of Oyo-5 and Oyo-6 wells in preparation of tying-in Oyo-7 and Oyo-8 wells. Cash and cash equivalents at December 31, 2014 was $25.1 million.
The Company’s total net proved oil reserves as of December 31, 2014 increased 6% to 9.1 million barrels (MMbbls), versus 8.5 MMbbls for the year-end 2013. The PV-10 of the net proved reserves increased 134% to $237.1 million compared to $101.30 at year-end 2013.
CAMAC will host a conference call today, March 12, 2015 at 10 a.m. CT (11 a.m. ET) to discuss full year and fourth quarter results, current operations and the Company’s outlook for 2015. The dial-in number is 1 877-317-6789 in the United States or +1 412-317-6789 internationally. To access the live audio webcast, please visit the “Investors” section of the Company’s website at www.camacenergy.com.
About CAMAC Energy
CAMAC Energy is an independent oil and gas exploration and production company focused on energy resources in sub-Saharan Africa. Its asset portfolio consists of nine licenses across four countries covering an area of 43,000 square kilometers, including current production and other exploration projects offshore Nigeria, as well as exploration licenses offshore Ghana, Kenya, and Gambia, and onshore Kenya. CAMAC Energy is headquartered in Houston, Texas. For more information about CAMAC Energy, please visit www.camacenergy.com.
This press release refers to prospective resources, including recoverable resources and resources in place. The Securities and Exchange Commission (“SEC”) permits oil and gas companies, in their filings with the SEC, to disclose only “reserves,” as that term is defined under SEC rules. Prospective resources are those quantities of petroleum estimated, as at a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and a chance of development. Investors should not assume there will be any discovery associated with prospective resources, or that any discovery will be economically drillable or ever be upgraded into reserves.
This news release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical fact, concerning activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Although the Company believes the expectations reflected in these forward-looking statements are reasonable, they involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. The Company’s actual results could differ materially from those anticipated or implied in these forward-looking statements due to a variety of factors, including the Company’s ability to successfully finance, drill and develop the wells and prospects identified in this release and risks and other risk factors discussed in the Company’s periodic reports filed with the Securities and Exchange Commission. All forward-looking statements are expressly qualified in their entirety by this cautionary statement. You should not place undue reliance on forward-looking statements, which speak only as of their respective dates. The Company undertakes no duty to update these forward-looking statements.
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CAMAC Energy Inc.
Christopher D. Heath, 713-797-2945
Director, Corporate Finance and Investor Relations
Lionel C. McBee, 713-797-2960
Manager, Corporate Communications