CAMAC Energy Inc. has signed a letter of intent (LOI) on the terms and conditions of a long-term agreement for the use of the Armada Perdana floating, production, storage, and offloading system (FPSO) as part of its further development of the Oyo field offshore Nigeria .
The LOI provides for an initial five year term, beginning January 1, 2014, with an automatic extension for an additional two years, unless terminated by CAMAC.
The FPSO Armada Perdana can process up to 40,000 bbl/d, with a storage capacity of 1MM bbl. It currently supports CAMAC's 2000 bbl/d and 40MM cu ft natural gas production from the Oyo field, in OML 120.
“FPSO Armada Perdana has been instrumental in supporting our ongoing operations deepwater offshore Nigeria,” said CAMAC chairman and CEO Kase Lawal.
“It has historically provided a high utilization rate and we are pleased to have this long-term infrastructure in place that will allow us to execute our development and exploration program. Along with the previously announced multi-year drilling rig program, US$270 million equity investment from the Public Investment Corporation (SOC) Limited of South Africa, and the $300 million bond offering, we will be well capitalized to increase production, revenues, reserves and resources.
"2014 will be a transformational and exciting year for CAMAC, as we focus on bringing our attractive portfolio of investment opportunities to production and begin generating significant cash flow.”
Management has started a roadshow presentation to institutional investors for the proposed $300 million bond offering, which will provide CAMAC the capital to complete Oyo-7, drill and complete Oyo-8, and drill and complete Oyo-9.