Dineo Faku

CAMAC Energy had found additional reserves in the Oyo field, off the coast of Nigeria, the US-headquartered oil and gas exploration company said yesterday.

Camac, which listed on the JSE in February, said it had discovered four new oil and gas reservoirs with gross hydrocarbon thickness of 34 metres from results of the logging-while-drilling data, reservoir pressure measurements and reservoir fluid sampling.

Production is expected to commence in October.

Camac, which is listed in New York, expects to produce 14 000 barrels of oil a day by the end of the year.

The Oyo-8 development well follows the successful drilling of Oyo-7 in October last year.

“This an excellent result from the vertical section of Oyo-8, as it positively established oil presence in new reservoirs in the Eastern fault block. We have commenced a detailed evaluation of the results with a view to establishing the size of the incremental reserve additions,” Segun Omidele, the senior vice-president of exploration and production, said.

“We are one step closer to bringing these two high-impact development wells on production that will generate immediate revenues, cash flow and earnings for our shareholders.”

The government-owned Public Investment Corporation (PIC) bought a 30 percent stake in Camac for $270 million (R3 billion). The PIC manages more than $1.4 trillion of pension funds on behalf of government employees.

Concerns were raised around the benefits that Camac’s controlling shareholder, Kase Lawal, a Nigerian-American who was described as President Jacob Zuma’s friend, would amass. Experts also criticised the appropriateness of investing in a company with uncertainties around its status as a going concern.

Camac’s portfolio consists of eight production and exploration licences in Nigeria, Gambia and Kenya. The licences cover an area of 41 000km2. It was also granted exploration licences offshore in Ghana and Kenya and onshore in Kenya.

The company started drilling its Oyo-8 asset in June. The vertical section was drilled to a total depth of 1 847m and was designed to test for additional hydrocarbons in the previously undrilled Eastern fault block of the Oyo field.

The company said the well would be completed horizontally as a producing well in the Pliocene formation.

Oyo-7 would also be completed horizontally in the Pliocene formation of the Central Oyo field, it said.

The shares surged 7.69 percent to R7 on the JSE yesterday.