Houston-based CAMAC Energy Inc. is to pay up to US $707.6 million to Allied Energy in stock, cash and convertible debt to acquire the 90% stake it didn’t already own in two deepwater oil leases offshore Nigeria.

Allied Energy is a wholly-owned subsidiary of CAMAC Energy Holdings Ltd., which also owns a 57.2% stake in CAMAC Energy Inc. After the acquisition, CAMAC Energy Inc. will have a 100% stake in OML 120 and 121 including the Oyo field. Current production from the field is about 2,000 b/d of oil and 40 MMcf/d of natural gas. CAMAC Energy currently controls just 10%.

CEO Kase Lawal said: “With this acquisition, we will be transitioning our company from a minor economic interest holder into a significant growth platform targeting the prolific Pliocene and Miocene reservoirs in this region.”
He added that with a 100% economic ownership of the “high-impact, deepwater offshore assets, we will be well positioned to pursue our goal of producing approximately 14,000 b/d of oil once Oyo-7 and Oyo-8 are completed next year”.

CAMAC said recently it expects to begin production of 7,000 b/d of oil from Oyo-7 by June and another 7,000 b/d from Oyo-8 shortly after.

CAMAC Energy Inc. will pay $170 million in cash and issue about 497.5 million shares in the transaction.

  • CAMAC has signed a letter of intent regarding terms and conditions of a long-term drilling contract with Northern Offshore Ltd. for the drillship Energy Searcher. Both companies are working toward executing a definitive drilling contract on or before the end of December this year. The rig is expected to be delivered to the Oyo field in the first half of 2014 to start drilling and completion activities.
Offshore