PIC stake in Camac helps to lift value

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Reuters

File photo: Siphiwe Sibeko

Johannesburg - The value of the Public Investment Corporation’s (PIC’s) investment in Camac Energy had doubled, Kase Lawal, the chief executive and chairman of the US exploration and oil production firm, said yesterday.

Speaking to Business Report after the company’s listing on the JSE, Lawal said when the company and the PIC had reached the investment agreement in September last year, its stock was valued at 71 US cents (about R7.72 at yesterday’s exchange rate), but had since doubled to $1.47 on Friday.

He added that the PIC’s investment was based on 30 percent of the company’s assets of $900 million, and the PIC was paying $270m. Asked if the PIC was getting 30 percent of the assets, Lawal said the investment was only in equity, not debt.

Controversy surrounding the PIC’s investment in Camac mirrored the company’s JSE listing yesterday. The PIC, which manages approximately R1.5 trillion of South African government employee retirement funds, bought a 30 percent stake in Camac for $270m.

When the PIC agreed to buy its share in Camac, the entire company was valued at $150m.

Camac received the first $135m from the PIC on Friday. But if the PIC’s investment only became valid that day, it would defeat the argument that it has already realised a return on its investment.

The PIC investment enabled Camac to conclude its takeover of mining leases in Nigeria from Allied Energy, which was also finalised on Friday.

Despite the debate surrounding the PIC investment, Camac’s stock was steady on its first JSE trading day. The shares were priced at R10.85, touched a high of R11 and the lowest trade was at R10.94. Camac was the fourth oil and gas exploration firm to list on the JSE, joining Oando, Sacoil Holdings and Sasol.

Lawal said Camac’s decision to list on the JSE, even though none of its assets were in South Africa, was encouraged by the fact that it was the largest stock exchange on the continent.

The company was bullish about its entry and its “big plans” included issuing shares to individuals and institutions as well as pursuing exploration opportunities for petroleum and shale gas in the country.

Camac has 1 072 892 046 of outstanding shares.

“We intend to engage the South African petroleum licensing unit in terms of looking at the exploration opportunities. We intend to engage the Minerals Department to look at opportunities in the shale oil or shale gas sector… We believe this [JSE listing] provides a platform for us to be able to start those engagements,” he said.

Camac’s portfolio consists of eight production and exploration licences in Nigeria, Gambia and Kenya. The assets cover an area of 41 000km2, with existing offshore production in Nigeria, exploration licences onshore and offshore in Kenya and offshore in Gambia.

Lawal said with the Allied Energy acquisition, Camac’s assets grew six times as it added reserves and cash flow. It was aiming to increase oil production in Nigeria from about 2 000 barrels a day to more than 14 000 by the end of this year.

Arctic Securities equity analyst Christian Yggeseth said Camac’s secondary JSE listing should price it more accurately. - Business Report


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