CAMAC Energy Inc. announces losses for second quarter 2013; provides operational update

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CAMACCAMAC Energy Inc. today announced a net loss of $4.4 million, or $(0.03) per diluted share for the quarter ended June 30, 2013. For the same period in 2012, CAMAC Energy reported a net loss of $4.0 million, or $(0.03) per diluted share.

Operating revenues for the Company were $1.9 million for the quarter ended June 30, 2013, compared to $0 for the same period in 2012. The increase in 2013 was due to increased oil sales, as there was not a lifting in the prior year period.

Average daily gross production for the quarter ended June 30, 2013 was 2,329 barrels of oil per day, versus 2,786 barrels of oil per day during the second quarter of 2012. CAMAC Energy’s net share of average daily production during the second quarter of 2013 was 199 barrels of oil per day compared to 461 barrels of oil per day during the second quarter of 2012. In the second quarter of 2013, there was one oil lifting from Oyo Field of approximately 220,000 barrels, 18,800 net to the Company’s interest, at a sales price of approximately $103 per barrel. In the second quarter of 2012, there were no oil liftings.

General and administrative expenses were $3.4 million for the second quarter of 2013, compared to$2.9 million for the second quarter of 2012.  The increase in the second quarter of 2013 versus the same period in 2012 was primarily due to higher salaries and benefits and increased consulting expenses.

Update on Operations

Nigeria

Allied Energy Plc (“Allied”), the operator of OMLs 120 and 121, is awaiting the arrival of the Sedneth 701 semi-submersible drilling rig in order to commence drilling of the Oyo well #7.  Transfer of the rig, pursuant to a Deed of Assignment with Transocean Ltd. and Nigerian Petroleum Development Corporation Limited (“NPDC”), has been delayed past the previously announced date of July 31, 2013due to unanticipated drilling problems at its current location.  Currently, efforts are being made to resolve the problems at its current drilling location and release the rig to Allied.  The Company currently expects that the spudding of Oyo # 7 well will be delayed at least until late August or early September. The well’s dual objectives are to increase production from the currently producing Pliocene reservoir and explore the resource potential in the deeper Miocene. During the first phase of drilling, expected to last 60 days, the plan is to drill down into the Miocene and, after testing, to plug the lower section of the well, move back up and drill directionally into the Pliocene reservoir.

After the completion of the first drilling phase, the rig will be released to NPDC per the previously announced Deed of Assignment between NPDC and Allied.

The second phase of drilling to complete the well and begin production will commence in 2014 upon receipt of the necessary long-lead items. Allied is currently in negotiations with a rig provider to lease a rig for the full twelve months of 2014 to complete well #7, drill and complete well #8 and potentially drill Oyo well #9 and one Miocene exploration well.

Kenya

During the quarter, the Company completed shooting airborne gravity and magnetic geophysical surveys on onshore Lamu Basin Blocks L1B and L16. The data acquisition covers essentially the entire 12,129 square kilometers in Block L1B and the entire 3,613 square kilometers in Block L16 and satisfies the gravity and magnetic survey requirements for each Block under the relevant Production Sharing Contracts.  The Company expects to receive initial results of the shoot by the end of the third quarter of 2013. The results will be used to optimize the placement of 2-D seismic lines by identifying faults, basement structures and intra-sedimentary volcanic layers and/or intrusions.  The Company is currently in negotiations with a leading geophysical services company to acquire a new 2-D seismic survey on both onshore blocks subsequent to the receipt of results, while continuing to evaluate existing seismic data on Block L1B to identify leads and prospects.

On its Kenya offshore Blocks L27 and L28, the Company is undertaking a regional geological study in advance of its participation in a 2-D multi-client seismic acquisition covering both Blocks sponsored by the Kenyan Government. The Company expects the acquisition to commence within the next twelve months.

The Gambia

In The Gambia, the Company is currently undertaking a geological and geophysical study in addition to evaluating existing 2-D seismic over its offshore Blocks A2 and A5 in order to delineate its 3-D seismic acquisition program. The company is currently in negotiations with a leading geophysical services company to acquire a new 2-D seismic survey on both A2 and A5.

 

Information from a CAMAC Energy press release was used in this report.