Nigerian firm, Pacific Asia in N5.8bn deal

CAMAC Energy Holdings Limited and US-based energy company, Pacific Asia Petroleum Inc. have announced the signing of a Purchase and Sale Agreement covering the Oyo Oilfield, located in the Nigerian deepwater.

Under the terms of the Agreement, CAMAC, through its subsidiaries, Allied Energy Plc and CAMAC International (Nigeria) Limited, will sell to Pacific Asia all of its interest in the Production Sharing Contract with respect to the Oyo Oilfield in return for 62.74 percent of its common shares and $38.84(N5.8bn) million in cash. The transaction is expected to close during the first quarter of 2010.

"The agreement with the CAMAC group is a significant milestone in a recent string of new and exciting developments at Pacific Asia Petroleum," said Frank C. Ingriselli, the Chief Executive Officer of Pacific Asia.

"We have known the CAMAC group since the formation of Pacific Asia Petroleum and have searched for opportunities for the two companies to work together. We have now found that opportunity with a production asset that we believe will deliver substantial additional value to our Company and its shareholders."

Kase Lawal, the chief executive officer of CAMAC International Corporation said, "We believe this deal creates value for all of our shareholders and we see this as a great opportunity to firmly establish a platform for growth and accelerate our capital optimisation strategy.

"This transaction also enables shareholders to participate in CAMAC's success as the first indigenous independent oil and Gas Company to make a discovery in deepwater offshore Nigeria. "

What's on offer

Discovered in 1995, the Oyo Oilfield is located approximately 75 miles offshore Nigeria in water depths ranging from 200 meters to 500 meters. Operation of the Oilfield is secured through OML 120, an Oil Mining Lease awarded to affiliates of CAMAC in 2002 by the Federal Republic of Nigeria.
CAMAC group holds a 60 percent interest in OML 120, on which the Oyo Oilfield is located, with the remaining 40 percent held by the field's operator, Nigerian Agip Exploration (NAOC), a subsidiary of Italy's ENI SpA (one of the world's largest international energy companies).

The Oyo Oilfield development consists of two producer wells with one gas injection well and one water injection well to maintain reservoir pressure.
The field is in the final preparation stage for the commencement of production. It will produce into the Floating Production Storage and Offloading (FPSO) vessel, Armada Perdana.

The dealers

Pacific Asia Petroleum is a U.S. publicly-traded energy company engaged in the development, production and distribution of oil and gas and is focused on early cash flow, high return projects. The company controls the rights to significant gas acreage under contract in China and is a strategic partner with several major energy companies in high-value oil fields in China.

It was founded in 2005 by a group of senior Texaco executives and is led by Frank Ingriselli. Pacific Asia Petroleum is headquartered in Hartsdale, New York, and also has offices in Beijing, China and California.

Founded in 1986 and headquartered in Houston, Texas, CAMAC International Corporation is a privately-held, global energy corporation with interests in the exploration and production of crude oil and natural gas in West Africa and South America energy properties.

Other activities carried out by the company include engineering and consulting services, and crude oil and refined products trading for markets in Africa, Europe, North America and South America. In 2008, CAMAC earned a revenue of $2.43 billion.