Wrap Text
Camac Energy - abridged pre listing statement
CAMAC Energy Incorporated
(Previously Pacific Asia Petroleum Inc.)
(Incorporated and registered in Delaware, United States of America)
Share code on the NYSE MKT: CAK
Share code on the JSE: CME
ISIN: US1317451011
USA ISIN: US1317451011
(“Camac” or “the company”)
ABRIDGED PRE-LISTING STATEMENT
ABRIDGED PRE-LISTING STATEMENT RELATING TO THE LISTING OF CAMAC ON THE
JSE LIMITED WITH EFFECT FROM THE COMMENCEMENT OF BUSINESS ON MONDAY, 24
FEBRUARY 2014
This abridged pre-listing statement is not an invitation to the general
public to subscribe for or acquire shares in Camac but is issued in
compliance with the Listings Requirements of the JSE Limited (“JSE”) for
the purposes of providing information to the public with regard to Camac.
The information in this abridged pre-listing statement has been extracted
from a full pre-listing statement (“the detailed pre-listing statement”)
to be issued by Camac on 14 February 2014, copies of which are available
as set out in paragraph 10 below.
1. Introduction
Camac currently has a primary listing of its ordinary shares on the NYSE
MKT. As at the date of this abridged pre listing statement, Camac has a
market capitalisation of US$244.7 million, based on the NYSE MKT
closing price of US$1.54 per Camac share. This translates to a market
capitalisation of R2.7 billion using the closing exchange rate.
The JSE granted the company a listing of 1 088 396 226 shares, which
shares rank pari passu with all shares issued on the NYSE MKT,
representing the entire issued ordinary share capital of Camac, in the
“Oil and Gas Producers” sector under the abbreviated name “Camac”, share
code “CME” and ISIN: US1317451011, with effect from the commencement of
trading on the JSE on Monday, 24 February 2014, as an inward foreign
listing with domestic status.
2. Background and History
Camac is a Delaware, U.S.A., corporation, which was incorporated as
Gemini Marketing Associates, Inc. in 1979, subsequently changed its name
to Pacific Asia Petroleum, Inc. and in 2010 changed its name to Camac
Energy Inc. The principal executive offices are located in Houston,
Texas, U.S.A. Camac is currently engaged in the exploration,
development, and production of oil and gas outside the United States.
Current operations are in Nigeria, Kenya and Gambia.
Camac’s exploration and development activities are focused exclusively
in sub-Saharan Africa. Camac believes the region possesses some of the
world’s most prolific and least developed petroleum systems, attractive
fiscal terms, a highly competitive industry cost structure and
supportive governments eager to develop their countries’ natural
resources. In addition, Camac’s board and management have extensive
experience in and a deep understanding of the region. In recent years,
Africa has entered a new phase in its petroleum history, with numerous
large oil and natural gas discoveries made in formerly unexplored and
undeveloped regions in East and West Africa. The exploration of these
regions has been historically constrained by industry assessments of
political and technical risk. Camac intends to leverage its extensive
experience and relationships in Africa, as well as the experience of its
management team, to successfully manage these risks and explore for and
produce hydrocarbon resources in these regions.
Camac has entered into an acquisition agreement with Allied Energy PLC
(“Allied”) and Camac International Nigeria Limited (“Camac (Nigeria)”),
in terms of which Camac will acquire the remaining 60% participation
rights, which are not currently owned by Camac, in a production sharing
contract relating to the Oil Mining Leases (“OML”) 120 and 121 (“Blocks
OML 120 and 121”) in the Oyo Field in Nigeria (“the Allied Acquisition”).
In addition, the Allied Acquisition will include certain other related
assets associated with the operations at the Oyo Field. The increase in
Camac’s economic interest in the Oyo Field to 100% is expected to provide
additional cash flow to fund Camac’s exploration and development
activities. On completion of the Allied Acquisition, the net share of
production from the Oyo Field (including Oyo 7 and 8 coming online) is
expected to increase from approximately 2 000 Bopd up to more than 14 000
Bopd in the third quarter of 2014. In addition, Camac will have the
exclusive ability to explore and develop 1 808 km2 of oil and gas prone
acreage offshore Nigeria.
The consideration for the Allied Acquisition will be a combination of
cash and Camac ordinary shares. The cash portion of the consideration
for the Allied Acquisition will be funded by the private placing of 30%
of the issued share capital of Camac with various funds under the
management of the Public Investment Corporation (“PIC”)for a total of
US$270 million (“Private Placing”).
3. Nature of business
Camac’s well-balanced asset portfolio includes producing assets, near-
term development projects, medium-term appraisal opportunities and
exploration prospects with significant oil potential, which include:
3.1. Nigeria – OMLs 120 and 121
Blocks OML 120 and 121 lie on the north-western flank of the prolific
offshore Niger Delta. The blocks are some 60 km from the Nigerian shore
line, in moderate water depths between 100 and 900 m. The combined total
area of the two blocks is 1 808 km2. Immediately to the west of OML 120
is OML 133, containing the Erha and Bosi complex of oil and gas fields,
reportedly containing 495 MMBbl and 400 MMBbl of recoverable resources,
respectively. More widely, OMLs 120 and 121 lie in a regional north-west
to south-east fairway of producing fields, including the Abo Field to the
north and the Oberan and Bonga Fields to the south. All of the major
hydrocarbon discoveries in the vicinity are understood to be in
sandstones of Miocene age.
3.2. Kenya
Camac operates four blocks in Kenya, in all cases with a 100% working
interest, although the National Oil Company of Kenya has an option to
exercise a participating interest of up to 20% following discovery and
approval of any development plan.
3.3. Gambia
Camac operates two offshore blocks in Gambia (West Africa), Block A2 and
Block A5, with a 100% working interest. Block A2 is 1 282 km2 in area and
lies immediately north of Block A5, which is 1 383 km2 in area. Water
depth varies greatly from 50m in the east, deepening rapidly to
approximately 1 000 m in the west. Operations in each block are governed
by a petroleum exploration, development and production license with the
Republic of Gambia, signed in May 2012.
The initial exploration period for each block runs for a term of four
years (to 2016) and carries with it a number of work commitments. Work
commitments for the initial period are: a regional geological study;
acquisition of 750 km2 3D seismic data; the drilling of one exploration
well, and evaluation of the results.
4. Strategy
In the near-term, Camac is focused on the implementation of a disciplined
capital programme that will maximise production from the Oyo Field in
Nigeria and on increasing reserves and production through accelerated
exploration, appraisal and development of the most attractive oil-prone
prospects in OMLs 120 and 121. Camac intends to increase overall
prospective resources by conducting geological and geophysical work
necessary to mature prospects in its blocks in Kenya and Gambia. By
employing its competitive advantages, the company seeks to increase net
asset value and deliver superior returns to holders of its equity. The
company’s business strategy and prospects include the following
components:
- grow proved reserves and production through accelerated exploration,
appraisal and development;
- apply the experience and expertise of Camac’s technical staff to
promote the success of the company’s exploration and development
programme;
- accelerate development of discoveries to initial production;
- attract industry partners to reduce costs/risks; and
- identify, acquire and explore additional exploration assets.
5. Prospects
Camac’s portfolio of oil and gas assets, its differential access to
opportunities, and the extensive experience of its management in the
African oil and gas business, provides investors with exposure to high-
value producing assets that are poised for reserve and production growth
and industry-coveted exploration opportunities.
Camac’s strategy is to safely and sustainably create shareholder value
through near-term oil production and reserve growth in Africa. Camac
focuses on high-netback oil projects that deliver near-term value and
sustainable cash flow over the long term. The successful implementation
of the Allied Acquisition will increase Camac’s economic interest in the
Oyo Field, a proven, oil producing asset, to 100%, which is expected to
provide additional cash flow to fund the company’s exploration and development
programmes. The completion of the Allied Acquisition will result in Camac’s net
share of production from the Oyo Field (including Oyo 7 and 8 coming online)
is expected to increase from approximately 2 000 Bopd to more than 14 000 Bopd
in the third quarter of 2014 and to more than 35 000 Bopd at peak production.
In addition, Camac will have the exclusive ability to explore and develop 1 808 km2
of oil and gas prone acreage offshore Nigeria.
On listing on the JSE, the company will have cash resources, of
approximately US$50 million, and approximately US$ 100 million following
the second closing of the Private Placing. The company currently
generates operating revenue.
In addition to its ongoing working capital requirements, the company must
secure sufficient funding for existing commitments and obtain new cash
resources sufficient to cover expected expenses.
The company plans to secure the necessary financing through a combination
of issuing new equity instruments, obtaining debt financing and entering
into joint venture arrangements. The company continuously examines
various financing alternatives to address future funding requirements as
it is dependent upon the ability to arrange appropriate financing to
complete development and continued exploration of its assets.
6. Key strengths
Camac believes that its key strengths detailed below form a strong basis
for the company to achieve its targets as well as enhance its market
position:
An Africa-centric risk diversified portfolio focused on near-term, low
risk oil-production and reserve growth
Camac targeted Africa as a business focus following a multi-year
assessment of numerous upstream opportunities across a broad region.
Africa’s geological prospectivity and value potential and the
ability of the African opportunity slate to generate near-term
revenue with long-term upside were key drivers in this decision.
Camac has determined that Africa is the region where it can best
leverage its strengths to create shareholder value.
Well-defined production and growth plan
Camac’s plan for developing the Oyo Field provides visible, near-
term production growth and cash generation opportunities. Current
development plans consist of drilling an additional six development
wells (Oyo-7 to Oyo-12) in two phases. The phase one development
will consist of Oyo-7 and Oyo-8, while phase two will consist of
Oyo-9 to Oyo-12. Allied has recently drilled the vertical portion of
the next development well in the field, Oyo-7, which is expected to
both increase production from the Pliocene reservoir and explore the
resource potential in the deeper Miocene reservoir. Phase one of
the Oyo development plan includes the drilling and completion of two
development wells, Oyo-7 and Oyo-8, by the end of 2014 with the
Camac estimated goal of increasing gross production from the Oyo
Field to around 14,000 Bopd The phase two wells will be brought on
production in 2015 and Camac estimates these will increase total
field oil production to about 35,000 Bopd.
Well-defined exploration plan with a risk-reducing farm-down strategy.
Following the Allied acquisition, Camac has licenses covering more
than 40,000 km2 of exploration potential in Sub Saharan Africa, with
a 100% operating interest in the four exploration blocks in Kenya
and the two exploration blocks in Gambia, and a 100% working
interest and operatorship of two exploration blocks in Nigeria. In
the next five years, it is anticipated that Camac’s exploration
programme will include the drilling of nine exploration wells: three
in Nigeria, four in Kenya and two in Gambia. Should these prove to
be successful, it is anticipated that additional appraisal wells
will be drilled in 2016 and 2017.
With high net working interest positions in all of Camac’s
exploration acreage, the company can afford to pursue opportunities
to farm-down its position prior to exploration drilling to recover
past costs and reduce future costs and operating risk.
Significant upside potential from exploratory assets
Since entering the African oil and gas business in 2010, Camac has
focused on acquiring exploratory licenses in emerging and proven
petroleum basins in Sub Saharan Africa. This has led to the assembly
of a hydrocarbon asset portfolio of eight licenses with significant
upside potential and attractive fiscal terms. In Nigeria, OMLs 120
and 121 offer substantial opportunities for significant value
creation as a result of numerous high value exploration prospects.
These prospects have a lower risk profile due to their similarity
and proximity to several large producing oil fields located on
nearby blocks, including Bonga, Erha, Bosi and Erha North, the
seismic expression of hydrocarbons, and their location in a well-
defined, oil-prone, sand-rich fairway.
Camac’s assets in Kenya and Gambia also offer exploration
opportunity. Although previously unexplored, Kenya offshore Block
L28 is adjacent to Kenya offshore Block L11B, in which Anadarko
Petroleum Corporation recently drilled an exploratory well
Oil-weighted asset portfolio in key strategic regions
The producing and prospective component of Camac’s portfolio of
assets consists primarily of oil discoveries and prospects. Oil
comprises approximately 68% of the resources that are associated
with OMLs 120 and121 in Nigeria. The Oyo Field produces light,
sweet crude and commands a premium to Dated Brent, its reference
commodity price. While the composition of any hydrocarbons that may
exist in Camac’s blocks in Kenya and Gambia is unknown at present,
Camac plans to target those prospects that are more lkely to
contain oil as opposed to natural gas. It is anticipated that
global petroleum supply and demand fundamentals will continue to
provide a strong market for Camac’s oil, and therefore the company
will continue to target oil exploration and development
opportunities. Furthermore, Camac’s geographic location in both
West Africa and East Africa will enable broad access to the major
consuming markets of North America, Asia and Europe, providing
marketing flexibility. The ability to supply oil to global markets
with reasonable transportation costs reduces localised supply/demand
risks often associated with various international oil markets.
Proven ability to acquire attractive exploration assets
Camac’s management team, led by Dr Kase Lawal, its Chairman and
Chief Executive Officer, has been successful in acquiring
substantial exploration acreage positions in Nigeria, Kenya and
Gambia. This success has been achieved despite competition from
other exploration companies, many of which possess financial
resources greater than those of Camac. Camac’s business development
efforts are ongoing and it is anticipated that additional
exploration blocks on both the East and West coasts of Africa will
be added during the next 12 months to further enhance the portfolio.
Experienced management and technical team with decades of experience in
Africa
Camac is led by an experienced management team with a track record
of successful exploration and development and public shareholder
value creation. The management team's average experience in the
energy industry is over 20 years. Dr. Kase Lawal is a Nigerian
native with over 26 years of experience in conducting business in
Nigeria and throughout sub-Saharan Africa. The unique experience,
industry relationships, and technical expertise of Camac’s board and
management have been critical to its success and are core
competitive strengths.
Furthermore, the management team has considerable experience in
managing the political risks present when operating in developing
countries, including working with the host governments to achieve
mutually beneficial results, while at all times protecting the
company’s rights and asserting investors’ interests. Each of the
executive officers previously served as an executive officer of an
international oil and gas company that was invested in a developing
oil and gas market.
7. Purpose for listing
The main purposes of the listing are to:
- facilitate the Private Placing at a listed company level;
- provide Camac with an additional source from which permanent
capital can be obtained, if required, to fund the group’s expansion
programme and working capital requirements and to facilitate future
growth;
- enhance South African investor and general public awareness of the
company and its activities, thereby enlarging Camac’s investor base
and increasing trade in its shares;
- have the flexibility of JSE listed shares in order to allow Camac
to take advantage of potential South African and African
acquisition opportunities; and
- facilitate direct investment by South African residents in Camac.
8. Details of Directors and Management of Camac
The details of the current directors of Camac are set out below:
Full name, age and Designation/
Nationality Business address Function
DR. KASE LUKMAN LAWAL 1330 Post Oak Boulevard, Chairman and Chief
(58) Suite 2250, Houston, Executive Officer
(American) Texas, 77056
DR. LEE PATRICK BROWN 2204 Potomac, Unit C Camac – non-
(75) Houston, TX 77057 executive director
(American)
WILLIAM J. CAMPBELL CB Energy, LLC Camac – non-
(54) 820 Gessner, Suite 1460 executive director
(American) Houston, TX 77024
J. KENT FRIEDMAN (69) Haynes and Boone, LLP Camac – non-
(American) One Houston Centre, 1221 executive director
McKinney Street, Suite
2100, Houston, TX 77010
JOHN HOFMEISTER (65) 1302 Waugh Drive, No. 940 Camac – non-
(American) Houston, TX 77019 executive director
IRA WAYNE McCONNELL McConnell & Jones LLP Camac – non-
(60) 3040 Post Oak Boulevard, executive director
(American) Suite 1600, Houston, TX
77056
HAZEL R. O’LEARY (75) 99 High Bluff Road Camac – non-
(American) Hilton Head Island, SC executive director
29926
The details of the management of Camac are set out below:
Full name, age and Business address Function in Camac
nationality group
NICOLAS J. EVANOFF (50) 1330 Post Oak Boulevard, Snr Vice President,
(American) Suite 2250, General Counsel and
Houston, Secretary
Texas, 77056
Full name, age and Business address Function in Camac
nationality group
BABATUNDE OMIDELE (58) 1330 Post Oak Boulevard, Snr Vice President,
(American) Suite 2250, Exploration and
Houston, Production
Texas, 77056
EARL W. MCNIEL (54) 1330 Post Oak Boulevard, Snr Vice President
(American) Suite 2250, and Chief Financial
Houston, Officer
Texas, 77056
HEIDI WONG (54) 1330 Post Oak Boulevard, Snr Vice President
(American) Suite 2250, and Chief
Houston, Administration
Texas, 77056 Officer
9. Major shareholders
The major ordinary shareholders of Camac are as follows:
Prior to the transactions:
Camac Energy Holdings Limited 89 655 711 (1) 57%
Post the transactions:
Camac Energy Holdings Limited 715 748 581 (1) 57%
PIC 376 884 422 30%
1) Includes all Camac shares held directly by Camac Holdings and its
subsidiaries, but excluding all Camac shares held by Dr. Kase Lawal
or his family members individually.
Each shareholder disclosed above was, directly, beneficially interested
in 5% or more of the issued ordinary share capital of Camac at the last
practicable date.
10. Share capital
Camac’s authorised and issued share capital at the date of listing will
be as follows:
US$
Authorised
2 500 000 000 ordinary shares with a par value of 2 000 000
$0.001
50 000 000 preference shares with a par value of 50 000
$0.001
Issued
*1 276 838 437 ordinary shares with a par value 1 276 838
of $0.001
No preference shares with a par value of $0.001
* includes - 227,996,378 Camac shares issued by means of pro rata
capitalisation issue to all Camac shareholders on the date
of the issuance of the stock dividend;
- 497,454,857 Camac shares issued to Allied and Allied
affiliates as part of the purchase price for Allied
acquisition;
- 376 884 422 Camac shares issued to PIC in terms of the
Private Placement; and
- 15,598,139 Camac shares issued to holders of options
and warrants pursuant to anti-dilution provisions triggered
by the stock dividend.
Camac does not have any shares held in treasury.
11. Copies of the pre-listing statement
Copies of the detailed pre listing statement will be available for
inspection at the registered offices of Camac’s corporate advisor and
sponsor, Sasfin Capital, 29 Scott Street, Waverley, Johannesburg in South
Africa at any time during business hours on weekdays (official public
holidays in South Africa excluded) from Friday, 14 February 2014 until
Monday, 24 February 2014 both days inclusive, and will be uploaded onto
Camac’s website (www.camacenergy.com) from Friday, 14 February 2014.
Johannesburg
14 February 2014
Corporate Advisor and Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)
South African Attorneys
Edward Nathan Sonnenbergs
Reporting Accountant
Grant Thornton (SA)
Competent Person
Gaffney, Cline and Associates
Date: 14/02/2014 12:12:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
