United States-based CAMAC Energy Inc. said a letter of intent (LOI) had been signed regarding terms and conditions of a long-term agreement for the floating, production, storage, and offloading (FPSO) system, Armada Perdana.
The signed LOI provides for an initial term of five years beginning January 1, 2014, with an automatic extension for an additional term of two years unless terminated by CAMAC with prior notice.
The parties are working towards executing a definitive agreement on or before January 31, 2014, according to a release on the company’s website.
The FPSO Armada Perdana can process up to 40,000 barrels of oil per day (bopd), with a storage capacity of one million barrels of oil.
It currently supports the company’s daily production of approximately 2,000 barrels of oil and 40 million cubic feet of natural gas from the Oyo Field offshore Nigeria in OML 120.
Kase Lawal, chairman and chief executive officer, CAMAC, said: “FPSO Armada Perdana has been instrumental in supporting our ongoing operations deepwater offshore Nigeria.
It has historically provided a high utilisation 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, $270 million equity investment from the Public Investment Corporation Limited of South Africa, and the proposed $300 million bond offering, we will be well capitalised 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,” he added.
Management has commenced the road show 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.
“Pro forma closing of the Allied Energy Plc transaction, these three wells will bring online a total of approximately 21,000 bopd net,” the statement said.
CAMAC Energy Inc. operates as an independent oil and gas exploration and production company focused on energy resources in Africa. Its asset portfolio consists of 8 licenses in 3 countries covering an area of 41,000 square kilometers, including production and other projects offshore Nigeria, as well as exploration licenses offshore and onshore Kenya, and offshore Gambia.