CAMAC Energy Inc. (NYSE Amex: CAK), today announced that Allied Energy PLC (“Allied”), an affiliate of the Company’s largest shareholder, has closed the previously announced transaction to acquire the 40% working interest in Nigerian OMLs 120 and 121 (the “OMLs”) from Nigerian Agip Exploration (“NAE”), a subsidiary of Eni SpA (“Eni”).
Allied has informed the Company that it plans to continue the development of the Oyo Field by drilling a new well in the fourth quarter of 2012. The new well, Oyo #7, is being designed not only to increase production from the 75 million barrels of reserves (1P, 2P and 3P) in the Pliocene reservoir, but also to test the prospective resource potential of the deeper Miocene reservoir in the field. With these dual objectives, the #7 well is expected to both significantly increase oil production from the currently producing reservoir and de-risk much of the unrisked resource potential in the rest of OMLs, independently estimated at over 2 billion barrels of oil.
Allied intends to engage CAMAC Energy to act as its technical service advisor, and the Company is currently engaged in advanced negotiations with drilling rig contractors and other critical service providers on behalf of Allied. The Company will continue to provide updates on these negotiations and other critical milestones as the well #7 spud date approaches.
“We are very pleased that Allied has officially closed its purchase of NAE’s interest in OML120 and 121, and we would like to thank NAE and Allied for their steadfast commitment and diligence in executing the transaction,” said Chairman and Chief Executive Officer, Dr. Kase Lawal. “Today is an important day for CAMAC Energy and its shareholders, as we finally remove the operational uncertainty on OML 120 and 121. With the completion of this transaction, the Company can focus on increasing the value of its Nigerian assets, as well as its frontier exploration acreage. We look forward to working with our partner Allied to execute our drilling program and to significantly increase oil production.”