CAMAC Energy, who is focused on oil and gas E&P in Africa via their positions in The Gambia, Kenya, and in Nigeria via interest (30% WI) in a production sharing contract in the Oyo Oilfield, some 75 miles off the southern coast (650 to 1.64k feet deep), broke great news this morning regarding the first discovery of hydrocarbons in the Miocene formation at Oyo, as well as key Q3 financial and operating data.
Oyo operator Allied Energy Plc has confirmed via the Oyo-7 well (OML 120 block), which started drilling only recently (Sept 12) using Transocean’s Sedneth 701 semi-submersible rig, that hydrocarbons are indeed present in this major Oyo target. Three distinct intervals of roughly 65 feet in total were identified from the well log data and, having now achieved both the primary and secondary objectives, Oyo-7 will be suspended pending Q1 2014 horizontal section drilling activity.
Chairman and CEO of CAK, Dr. Kase Lawal, spoke warmly of this discovery and characterized the operator’s results as very encouraging with regard to future development of the company’s sizeable Miocene prospects in the OML 120 and 121 blocks. This news firmly reinforces the company’s future plans for exploration in these blocks and significantly de-risks the overall future Oyo development metrics, a fact which savvy investors will no doubt realize in short order. There is a great deal of potential now apparent in the Miocene for CAK and this development reveals how apt the company’s strategy has truly been. CAK has been steadily lining up shareholders to profit big time by applying the most advanced production techniques available off of coastal Africa, as well as at their onshore operations in the continent’s numerous developing basins, basins which further showcase the petroleum geology richness of Africa.
Oyo-7 is slated for mid-2014 production and current estimates for initial output are in the 7k BOPD range. This latest effort by the operator is a sound endorsement of the company’s vision for hydrocarbon potential in this province, which has an established history for production (Oyo field production since 2009), extensive 3D seismic mapping and roughly 16 identified prospects/leads. OML 120/121 certified best estimate for recoverable gross contingent/unrisked prospective oil resources (Netherland, Sewell & Associates, Inc.) is around 626M bbls with a best high unrisked potential of a juicy 2.2B bbls. Today’s data will now be further integrated into ongoing studies of the production potential for the blocks.
Q3 data looks good with 314 BOPD net to the company on just over 2.2k bbls from the two wells currently in operation offshore Nigeria. Revenues of $3.5M, compared to $7.9M in Q3 FY12, were lower due primarily to only one lifting in the quarter, here totaling over 220k barrels of crude with 31k bbls net to the company. The company continues to enjoy a premium to Brent Crude due to the quality of the oil coming out of the Oyo and realized $112.09/bbl on average in Q3. CAK has set a conference call up for this Friday, Nov 15 at 11 a.m. CST (12 p.m. EST) to go over the Q3 data, as well as the company’s outlook for the rest of the year.
Interested parties can attend the call via phone using conference number 10036347 on (877-317-6789) in the U.S., or on the (412-317-6789) line if calling from outside the U.S. Participation instructions, as well as an eventual live audio webcast on the day of the conference call can be had at www.CAMACenergy.com and a replay of the call will be available on the site for up to 30 days thereafter.
To learn more, head over to the CAMAC Energy website www.CAMACenergy.com
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