Camac-EnergyCAMAC Energy Inc.  today announced that it has entered into a definitive agreement to acquire the remaining economic interests that it does not currently own in the production sharing contract covering Oil Mining Leases 120 and 121 (the “OMLs”) offshore Nigeria, which include the currently producing Oyo Field, from Allied Energy Plc (“Allied”).

Allied is a wholly owned subsidiary of CAMAC Energy Holdings Limited (“CEHL”), the 57.2% majority stockholder of the Company. To acquire the interests, CAMAC Energy will issue 497,454,857 shares of common stock, pay US$170 million in cash and issue a US$50 million convertible subordinated note.

To fund the cash portion of the consideration for the transaction with Allied and a portion of anticipated capital expenditures for development of the Oyo Field, CAMAC Energy also announced that it has entered into a definitive agreement with the Public Investment Corporation (SOC) Limited (“PIC”) of South Africa for a US$270 million equity investment through a private placement of 376,884,422 shares of common stock, representing an approximate 30% ownership interest in the Company after completion of the transactions. In connection with the investment by the PIC, the Company has agreed to list its common stock on the Johannesburg Stock Exchange (“JSE”). These transactions are subject to stockholder and regulatory approvals and are each conditional upon the closing of the other transaction and listing on the JSE.

“We are honored that the PIC has placed their trust and confidence in us by investing in our organization,” said Chairman and Chief Executive Officer of CAMAC Energy, Dr. Kase Lawal. “The Allied acquisition, investment by the PIC and secondary listing on the JSE will completely change the complexion of our Company, and we look forward to beginning 2014 as a stronger organization with increased production, revenues and scale. Being dual-listed on the NYSE and JSE will provide increased liquidity and transparency for our shareholders. With 100% economic ownership of our high-impact, deepwater offshore assets, we will be well positioned to pursue our goal of producing approximately 14,000 barrels of oil per day once Oyo-7 and Oyo-8 are completed next year.”

In order to achieve the post-closing share ownership percentages negotiated between the parties, the agreement with Allied requires the Company to declare a dividend in the form of additional shares of CAMAC Energy common stock, equal to approximately 1.435 shares per share outstanding. The declaration of the stock dividend will not occur if the conditions to the transactions are not fulfilled. As a result of the Allied and PIC transactions and the issuance of shares pursuant to the anticipated stock dividend, Allied and CEHL will own approximately 56.97% (or approximately 57.15%, including the shares owned by individuals controlling Allied and CEHL) of the outstanding common stock of the Company, PIC will own approximately 30% and the existing public stockholders of CAMAC Energy not affiliated with Allied or CEHL will own approximately 13.03% (or approximately 12.85%, excluding the shares owned by individuals controlling CEHL and Allied). The percentages exclude the 69,793,411 shares into which the subordinated note will initially be convertible.

Dr. Lawal added, “This strategic acquisition is a transformational event for our company, and significantly increases our current production and cash flow. 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.”

After the closing of the transactions, the Company will own a 100% economic interest in the production sharing contract covering the OMLs. Current production from the Oyo Field within the OMLs is approximately 2,000 barrels of oil per day, and CAMAC Energy will become the technical operator.


[CAMAC Press Release]