CAMAC Energy Incorporated has entered into a definitive agreement with the Public Investment Corporation Limited of South Africa for a $270m equity investment to boost its operation in the Nigerian oil and gas industry.
The investment is expected to come through a private placement of 376,884,422 shares of common stock, representing about 30 per cent ownership interest in CMAC Energy Incorporated.
Part of the deal is an agreement to list the common stock of the companies on the Johannesburg Stock Exchange.
A statement made available to our correspondent on Friday further said the South African investment was aimed at funding CAMAC’s acquisition of the remaining economic interests in the production sharing contracts covering Oil Mining Leases 120 and 121 offshore Nigeria from Allied Energy Plc.
Allied is a wholly owned subsidiary of CAMAC Energy Holdings Limited, the 57.2 per cent majority stockholder of the company.
According to the company, the oil fields include the currently producing Oyo Field.
To acquire the interests, CAMAC Energy will issue 497,454,857 shares of common stock, pay $170m in cash and issue a $50m convertible subordinated note, the company said.
The Chairman and Chief Executive Officer, CAMAC Energy, Dr. Kase Lawal, said the transactions were subject to stockholder and regulatory approvals and were conditional upon the closing of the other transaction and listing on the JSE.
He said, “We are honored that the PIC has placed their trust and confidence in us by deciding to invest in our organisation.
“The Allied acquisition, investment by the PIC and secondary listing on the JSE will completely change the complexion of our company, and we look forward to beginning 2014 as a stronger organisation with increased production, revenues and scale.
“Being dual-listed on the NYSE and JSE will provide increased liquidity and transparency for our shareholders. With 100 per cent economic ownership of our high-impact, deepwater offshore assets, we will be well positioned to pursue our goal of producing approximately 14,000 barrels of oil per day once Oyo-7 and Oyo-8 are completed next year.”
In order to achieve the post-closing share ownership percentages negotiated between the parties, Lawal said the agreement with Allied required the company to declare a dividend in the form of additional shares of CAMAC Energy common stock, equal to approximately 1.435 shares per share outstanding.
The declaration of the stock dividend, he explained, would not occur if the conditions to the transactions were not fulfilled.
As a result of the Allied and PIC transactions and the issuance of shares pursuant to the anticipated stock dividend, he said Allied and CEHL would own approximately 56.97 per cent (or approximately 57.15 per cent, including the shares owned by individuals controlling Allied and CEHL of the outstanding common stock of the company.
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