24 February 2012, Sweetcrude, HOUSTON, Teaxs – CAMAC Energy Inc. (NYSE Amex: CAK), a U.S.- based energy company engaged in the exploration, development and production of oil and gas, says it has entered into a heads of agreement (the “Heads of Agreement”) with the Kenyan Ministry of Energy for the award of three exploration blocks: l1A L1B, and L16 (“the Blocks”).
Block 11A is an onshore block covering 10,913 square kilometers in northwest Kenya near the Ugandan border. Block L1B is an onshore block covering 12,197 square kilometers in eastern Kenya on the Somali border.
Block L16 covers 1,699 square kilometers onshore and 89 square kilometers offshore on Kenya ’s southeast coast. CAMAC Energy will be the operator with 90% interest in the Blocks. The Government of Kenya will be carried at 10% through declaration of commerciality and may thereafter elect to participate up to 10%.
The Heads of Agreement sets forth the negotiated major fiscal terms and work program for the Blocks, and the award is subject to negotiation and signing of formal Production Sharing Contracts (“the PSCs”) for the Blocks within the next 30 days and approval by the Minster of Energy and the Board of Directors of CAMAC Energy, as well as payment of requisite signature bonuses upon signing.
Block 11A is in the Lotikipi rift basin adjacent to four blocks operated by Tullow Oil plc (LSE:TLW): Blocks 10A, 10BA, 10BB, and 13T. Tullow recently announced the spudding of the Ngamia-1 well on Block 10BB. The well is testing a prospect similar to oil prospects in Tullow’s Lake Albert Rift Basin , where over 1 billion barrels of contingent resources have been discovered.
Block L1B is located in the Lamu Basin to the south of Blocks 3A and 3B, both operated by Vanoil Energy Limited (TSX.V:VEL). Block L16 is also in the Lamu Basin adjacent in the east to Block L8 and in the south to Block L9, operated by Apache Corporation (NYSE:APA) and Ophir Energy plc (LSE: PHR), respectively.
Chairman and CEO Dr. Kase Lawal commented, “We are exceptionally pleased to have the opportunity to be awarded three exploration blocks in Kenya . Not only is Kenya home to some of East Africa ’s most prospective basins, but the awarded Blocks are adjacent to those owned by proven explorers Tullow, Apache, and Ophir. Furthermore, with this agreement CAMAC Energy will enter East Africa on its preferred terms as operator with the ability to control the pace of exploration. Once again, as with our previous announcement on Gambia , we are continuing to validate our strategy of acquiring prime frontier exploration acreage throughout the continent.”
About CAMAC Energy Inc.
CAMAC Energy Inc. (NYSE Amex: CAK) is a U.S.-based energy company engaged in the exploration, development and production of oil and gas. The Company currently has operations in Nigeria and, through its Pacific Asia Petroleum subsidiaries, in China . The Company’s principal assets include interests in OML 120 and OML 121, offshore oil leases in deepwater Nigeria that started production from the Oyo Oilfield in December 2009, and a 100% interest in the Zijinshan Block gas asset located in the Shanxi Province, China. The Company was founded in 2005 and has offices in Houston, Texas, Beijing, China, and Lagos, Nigeria.