CORRESP 1 filename1.htm cak_corresp.htm
 
March 21, 2013

VIA EDGAR CORRESPONDENCE
Mr. Brad Skinner
Senior Assistant Chief Accountant
United States Securities and Exchange Commission
Division of Corporation Finance
101 F Street N.E.
Washington, D.C. 20549

Re:          CAMAC Energy, Inc.
Form 10-K for Fiscal Year Ended December 31, 2011
Filed March 15, 2012
Definitive Proxy Statement on Schedule 14A
Filed April 30, 2012
Response dated February 15, 2013
File No. 1-34525

Dear Mr. Skinner:
 
We refer to a telephonic conversation of March 12, 2013 between Mr. Michael Faye, Staff Accountant of the Securities and Exchange Commission (“SEC”), and the undersigned of CAMAC Energy Inc. (the “Company”).  Further to such conversation, we are providing supplemental information to the Staff in connection with our response in our February 15, 2013 letter to the Staff’s prior comment number 3.
 
Table 1 below illustrates the approach we took to risk adjust the Company’s future net cash flows as of December 31, 2011.  Table 2 represents the summary projection of reserves and revenue contained in the Company’s 2011 reserve report from Netherland, Sewell & Associates, Inc. and supports the Undiscounted Future Net Revenues Less Costs shown in Table 1 for each reserve category.  Table 2 also shows how capital costs and operating expense have been taken into account in the calculation of the future net cash flows.  Please note that for probable reserves no additional development wells are required, but rather, the incremental reserves would result from improved well performance from existing wells (Oyo-7, 8 & 9) and therefore no additional capital expenditures would be required. Additional operating expenditures would be required, however, due to longer field life for the probable reserves. For the possible reserves, new wells (Oyo -10, 11 and 12) will be required in the eastern part of the field and therefore both additional capital expenditures and operating expenditures would be incurred.

In connection with its response, CAMAC Energy Inc. acknowledges that:

  
CAMAC Energy Inc. is responsible for the adequacy and accuracy of the disclosures in the filings;
  
Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filings; and
  
CAMAC Energy Inc. may not assert Staff comments as a defense in any proceeding initiated by the SEC or any person under the federal securities laws of the United States.
 
If you have any questions or comments regarding this letter, please contact the undersigned at 713-797-2961.
 
Very truly yours
 
 
CAMAC Energy Inc.
 
 
By:             
Nicolas J. Evanoff
Senior Vice President & General Counsel

 
 

 
 
Table 1
 

 
Future Net Cash Flows from Proved (P1), Probable (P2), and Possible (P3) Reserves - December 31, 2011
CAMAC Energy Inc. Share of Oyo Field
 
       
12/31/2011
 
Risked
       
Productive
 
Undiscounted
       
Carrying
 
Basis
   
Undiscounted Future Revenues Less Costs
 
Amount
 
Excess/(Def).
   
Unadjusted
   
Risk
   
Risk
       
   
for Risk
   
Factor
   
Adjusted
       
Net proved reserves 12/31/11
    80,311,900       1.00       80,311,900        
Net probable - incremental
    210,090,200       0.50       105,045,100        
Net possible - incremental
    675,046,600       0.10       67,504,660        
Total 12/31/11
    965,448,700               252,861,660  
190,979,000
 
61,882,660
 
 
 

 


Table 2
 
SUMMARY PROJECTION OF RESERVES AND REVENUE
CAMAC ENERGY INC. INTEREST
OYO FIELD, OIL MINING LEASE 120, OFFSHORE NIGERIA AS OF DECEMBER 31, 2011
 
PROVED(1P)RESERVES

                                                   
     
Oil Reserves
   
Future
Gross
         
Net
Capital
   
Net
Operating
   
Future
Net
   
Cumulative
PWat
 
Period
   
Gross
   
Net
   
Revenue
   
Taxes
   
Costs
   
Expense
   
Revenue
    10.0%  
Ending
   
(MBBL)
   
(MBBL)
    $(M)     $(M)     $(M)     $(M)     $(M)     $(M)  
                                                               
  12-31-2012       978.2       82.6       9,276.1       0.0       0.0       0.0       9,276.1       8,844.4  
  12-31-2013       4,165.9       842.6       94,593.4       2,192.8       62,008.4       38,693.7       (8,301.5 )     1,648.8  
  12-31-2014       4,691.0       870.9       97,772.3       9,370.8       0.0       37,002.4       51,399.1       42,150.5  
  12-31-2015       2,591.4       519.5       58,317.4       4,064.0       0.0       33,642.0       20,611.5       56,915.5  
  12-31-2016       1,253.3       347.2       38,976.6       584.1       300.0       30,765.8       7,326.8       61,686.9  
  12-31-2017       0.0       0.0       0.0       0.0       0.0       0.0       0.0       61,686.9  
  12-31-2018       0.0       0.0       0.0       0.0       0.0       0.0       0.0       61,686.9  
  12-31-2019       0.0       0.0       0.0       0.0       0.0       0.0       0.0       61,686.9  
  12-31-2020       0.0       0.0       0.0       0.0       0.0       0.0       0.0       61,686.9  
  12-31-2021       0.0       0.0       0.0       0.0       0.0       0.0       0.0       61,686.9  
Total
      13,680       2,663       298,936       16,212       62,308       140,104       80,312       61,687  
                                                                     

PROBABLE(2P)UNDEVELOPED RESERVES
                                                   
     
Oil Reserves
   
Future
Gross
         
Net
Capital
   
Net
Operating
   
Future
Net
   
Cumulative
PWat
 
Period
   
Gross
   
Net
   
Revenue
   
Taxes
   
Costs
   
Expense
   
Revenue
    10.0%  
Ending
   
(MBBL)
   
(MBBL)
    $(M)     $(M)     $(M)     $(M)     $(M)     $(M)  
                                                               
  12-31-2012       0.0       (3.0 )     (337.1 )     0.0       0.0       0.0       (337.1 )     (321.4 )
  12-31-2013       3,141.6       413.9       46,469.6       7,602.1       0.0       (744.6 )     39,612.0       34,013.6  
  12-31-2014       3,939.5       280.2       31,457.0       10,724.3       0.0       (733.6 )     21,466.3       50,928.8  
  12-31-2015       3,540.7       368.9       41,411.2       9,838.9       0.0       ( 49.6 )     31,621.9       73,581.2  
  12-31-2016       2,941.9       543.7       61,030.2       8,320.2       0.0       296.5       52,413.5       107,714.3  
  12-31-2017       2,852.6       865.1       97,113.4       21,612.3       0.0       34,762.7       40,738.4       131,832.4  
  12-31-2018       2,028.9       609.8       68,451.0       20,262.3       0.0       29,485.0       18,703.7       141,898.8  
  12-31-2019       1,250.3       359.5       40,362.8       5,209.2       0.0       29,282.0       5,871.6       144,771.7  
  12-31-2020       0.0       0.0       0.0       0.0       0.0       0.0       0.0       144,771.7  
  12-31-2021       0.0       0.0       0.0       0.0       0.0       0.0       0.0       144,771.7  
Total
      19,696       3,438       385,958       83,569       0       92,298       210,090       144,772  
 
POSSIBLE(3P)UNDEVELOPED RESERVES
 
     
Oil Reserves
   
Future
Gross
         
Net
Capital
   
Net
Operating
   
Future
Net
   
Cumulative
PWat
 
Period
   
Gross
   
Net
   
Revenue
   
Taxes
   
Costs
   
Expense
   
Revenue
    10.0%  
Ending
   
(MBBL)
   
(MBBL)
    $(M)     $(M)     $(M)     $(M)     $(M)     $(M)  
                                                               
  12-31-2012       0.0       0.0       5.3       0.0       0.0       0.0       5.3       5.0  
  12-31-2013       1,757.9       168.5       18,918.6       4,699.8       0.0       (850.8 )     15,069.5       13,067.0  
  12-31-2014       6,947.7       1409.4       158,214.6       15,610.3       90,773.3       (438.4 )     52,269.3       54,254.5  
  12-31-2015       10,078.4       3986.1       447,484.6       244,676.0       0.0       286.4       202,522.2       199,331.4  
  12-31-2016       7,457.1       2916.1       327,364.8       185,992.4       0.0       261.3       141,111.1       291,226.8  
  12-31-2017       5,308.5       1811.0       203,301.6       107,119.6       0.0       205.3       95,976.6       348,047.4  
  12-31-2018       3,782.4       1305.0       146,497.3       70,454.5       0.0       146.8       75,896.0       388,895.0  
  12-31-2019       2,894.6       996.7       111,888.4       58,653.7       0.0       156.0       53,078.8       414.865.2  
  12-31-2020       2839.5       910.4       102202.0       37,916.2       0.0       29,286.3       34,999.6       430.432.9  
  12-31-2021       381.8       119.8       13450.2       4,461.5       0.0       4,870.4       4 118.3       432,098.2  
Total
      41,448       13,623.0       1,529,327.4       729,584.0       90,773.3       33,923.3       675,046.6       432,098.2  
 
Totals may not add because of rounding.
BASED ON SEC PRICE AND COST PARAMETERS
All estimates and exhibits herein are part of this NSAI report and are subject to its parameters and conditions.