10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

AMENDMENT NO. 1

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2014

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Commission File Number: 01-34525

CAMAC ENERGY INC.

(Exact name of registrant as specified in its charter)

Delaware	30-0349798
(State or Other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1330 Post Oak Blvd., Suite 2250, Houston, Texas	77056
(Address of principal executive offices)	(Zip Code)

(713) 797-2940

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

At May 6, 2014 there were 1,259,844,291 shares of common stock, par value $0.001 per share, outstanding.

EXPLANATORY NOTE

This Amendment No. 1 to the Quarterly Report on Form 10-Q/A of CAMAC Energy Inc. (the “Company”) for the three months ended March 31, 2014 is being filed to amend and restate in their entirety the following items of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 that was filed on May 9, 2014 (the “Original Form 10-Q”): (i) Item 1 of Part I, “Financial Information”; (ii) Item 2 of Part I, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”; (iii) Item 4 of Part I, “Controls and Procedures”; and (iv) Item 6 of Part II, “Exhibits.”  We have also updated the signature page, the certifications of our Chief Executive Officer and Chief Financial Officer in Exhibits 31.1, 31.2, 32.1 and 32.2, respectively, and our unaudited consolidated financial statements formatted in Extensible Business Reporting Language (XBRL) in Exhibit 101.  No other sections were affected or have been changed. However, for the convenience of the reader, this Form 10-Q/A restates in its entirety the Original Form 10-Q. This Form 10-Q/A is presented as of the filing date of the Original Form 10-Q and does not reflect events occurring after that date, or modify or update disclosures in any way, other than as required to reflect the restatement. Accordingly, this Form 10-Q/A should be read in conjunction with the Company’s other filings made with the Securities and Exchange Commission subsequent to the filing of the Original Form 10-Q, including any amendments to those filings.

This Form 10-Q/A, and the restated financial statements contained herein, is being filed because of errors discovered by management in the unaudited consolidated financial statements included in the Original Form 10-Q.  Further details of the errors and the impact on the unaudited financial statements set forth in the Original Form 10-Q are contained in “Note 3 – Restatement” in the Notes to the Unaudited Consolidated Financial Statements in this Form 10-Q/A.

Page 2 of 26

PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements:	4
	Consolidated Balance Sheets as of March 31, 2014 and December 31, 2013 (unaudited)	4
	Consolidated Statements of Operations for the three months ended March 31, 2014 and 2013 (unaudited)	5
	Consolidated Statements of Equity for the three months ended March 31, 2014 and 2013 (unaudited)	6
	Consolidated Statements of Cash Flows for the three months ended March 31, 2014 and 2013 (unaudited)	7
	Notes to Unaudited Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	21
Item 4.	Controls and Procedures	22
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	23
Item 1A.	Risk Factors	23
Item 5.	Other Information	23
Item 6.	Exhibits	24
Signatures		26
Exhibits

Page 3 of 26

PART I. – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CAMAC ENERGY INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except for share and per share amounts)

	March 31,			December 31,
	2014			2013
ASSETS	Restated			Restated
Current assets:
Cash and cash equivalents	$	36,235		$	163
Accounts receivable		4,154			1,112
Crude oil inventory		8,190			16,254
Prepaids and other current assets		7,031			856
Total current assets		55,610			18,385
Property, plant and equipment:
Oil and gas properties (successful efforts method of accounting), net		432,954			435,035
Other property, plant and equipment, net		955			752
Total property, plant and equipment, net		433,909			435,787
Other assets		52			52
Total Assets	$	489,571		$	454,224
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable	$	35,475		$	31,668
Accrued expenses		10,999			7,446
Asset retirement obligations		12,751			12,479
Note payable - related party		92,147			6,496
Total current liabilities		151,372			58,089
Asset retirement obligations		8,291			8,122
Long-term note payable - related party		50,000			-
Other long-term liabilities		68			67
Total liabilities		209,731			66,278
Equity:
Preferred stock $0.001 par value - 50,000,000 shares    authorized; zero issued and outstanding at March 31,    2014 and December 31, 2013		-			-
Common stock $0.001 par value - 2,500,000,000 shares    authorized; 1,070,430,276 and 382,362,236 shares issued and    outstanding as of March 31, 2014 and December 31, 2013		1,070			382
Paid-in capital		642,520			736,456
Accumulated deficit		(363,750	)		(348,892	)
Total equity		279,840			387,946
Total liabilities and equity	$	489,571		$	454,224

See accompanying notes to unaudited consolidated financial statements.

Page 4 of 26

CAMAC ENERGY INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share amounts)

	Three Months Ended March 31,
	2014				2013
	Restated			Restated
Revenues:
Oil and gas revenue	$	19,894		$	22,006
Operating costs and expenses:
Production costs		22,897			22,113
Exploratory expenses		2,276			1,198
Depreciation, depletion and amortization		4,971			5,467
General and administrative expenses		4,433			3,712
Total operating costs and expenses		34,577			32,490
Operating loss		(14,683	)		(10,484	)
Other income (expense):
Interest expense		(185	)		(4	)
Other, net		10			-
Total other income (expense)		(175	)		(4	)
Loss before income taxes		(14,858	)		(10,488	)
Income tax expense		-			-
Net loss	$	(14,858	)	$	(10,488	)
Net (loss) income per common share:
Basic	$	(0.02	)	$	(0.03	)
Diluted	$	(0.02	)	$	(0.03	)
Weighted average common shares outstanding:
Basic		676,927			379,880
Diluted		676,927			379,880

See accompanying notes to unaudited consolidated financial statements

Page 5 of 26

CAMAC ENERGY INC.

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(In thousands)

			Additional
			Paid-in			Accumulated			Total
	Common		Capital			Deficit			Equity
	Stock		(Restated)			(Restated)			(Restated)
At December 31, 2013	$	382	$	736,456		$	(348,892	)	$	387,946
Common stock issued		688		134,728			-			135,416
Stock-based employee compensation		-		507			-			507
Net loss		-		-			(14,858	)		(14,858	)
Allied transaction		-		(220,000	)		-			(220,000	)
Adjustments to net assets of Allied		-		(9,171	)		-			(9,171	)
At March 31, 2014	$	1,070	$	642,520		$	(363,750	)	$	279,840

See accompanying notes to unaudited consolidated financial statements.

Page 6 of 26

CAMAC ENERGY INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	Three Months Ended March 31,
	2014			2013
Cash flows from operating activities	Restated			Restated
Net loss	$	(14,858	)	$	(10,488	)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation, depletion and amortization		4,531			4,926
Asset retirement obligation accretion		440			541
Stock-based compensation		507			338
Other		-			1
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable		(3,042	)		(348	)
(Increase) decrease in inventories		7,437			1,033
(Increase) decrease in other current assets		(6,175	)		39
Increase (decrease) in accounts payable and accrued liabilities		7,388			1,245
Net cash used in operating activities		(3,772	)		(2,713	)
Cash flows from investing activities
Capital expenditures		(2,050	)		(352	)
Acquisition - related party		(85,000	)		-
Net cash used in investing activities		(87,050	)		(352	)
Cash flows from financing activities
Proceeds from issuance of common stock		135,000			-
Adjustments to the net assets of Allied		(9,171	)		1,591
Proceeds from  note payable - related party		650			-
Proceeds from exercise of stock options		415			-
Net cash provided by financing activities		126,894			1,591
Net increase (decrease) in cash and cash equivalents		36,072			(1,474	)
Cash and cash equivalents at beginning of period		163			3,806
Cash and cash equivalents at end of period	$	36,235		$	2,332
Supplemental disclosure of cash flow information
Cash paid for:
Interest, net	$	8		$	4

See accompanying notes to unaudited consolidated financial statements.

Page 7 of 26

CAMAC ENERGY INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Company Description

CAMAC Energy, Inc. (NYSE MKT: CAK, JSE: CME) is an independent exploration and production company engaged in the acquisition and development of energy resources in Africa. The Company’s asset portfolio consists of nine licenses in four countries covering an area of approximately 43,000 square kilometers (approximately 10 million acres). The Company has producing properties and conducts exploration activities in Nigeria, as well as exploration licenses with significant hydrocarbon potential onshore and offshore Kenya, offshore The Gambia and offshore Ghana.

The Company’s corporate headquarters is located in Houston, Texas.  In addition, the Company has offices in Nairobi, Kenya, Banjul, The Gambia and Lagos, Nigeria.

The Company’s operating subsidiaries are CAMAC Energy Limited, CAMAC Petroleum Limited (“CPL”), CAMAC Energy International Limited, CAMAC Energy Ghana Limited, CAMAC Energy Kenya Limited, CAMAC Energy Gambia A5 Limited and CAMAC Energy Gambia A2 Limited. The terms “we,” “us,” “our,” “Company,” and “our Company” refer to CAMAC and its subsidiaries and affiliates.

The Company’s related parties include CAMAC Energy Holdings Limited (“CEHL”), CAMAC International Nigeria Limited, CAMAC International Limited and Allied Energy Plc. (“Allied”).

2. Basis of Presentation and Recently Issued Accounting Standards

The accompanying unaudited consolidated financial statements and related disclosures in this Amendment No. 1 on Form 10-Q/A have been restated.  For further discussion, see “Note 3 – Restatement”.

The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly owned and majority-owned direct and indirect subsidiaries and have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). All significant intercompany transactions and balances have been eliminated in consolidation. The unaudited consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the consolidated financial position and results of operations for the indicated periods. All such adjustments are of a normal recurring nature.  This Form 10-Q should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2013.

In February 2014, the Company completed the acquisition of the remaining economic interests that it did not already own in the Production Sharing Contract (“PSC”) covering Oil Mining Leases 120 and 121 (“OMLs 120 and 121”) offshore Nigeria, which include the currently producing Oyo Field (the “Allied Assets”), from Allied (the “Allied Transaction”). Allied is a subsidiary of CEHL, the Company’s majority shareholder and deemed to be under common control (transactions between subsidiaries of the same parent). Accordingly, the net assets acquired from Allied were recorded at their respective carrying values as of the acquisition date. The financial statements presented for all periods included herein are presented as though the transfer of the Allied assets had occurred at the beginning of the first period presented.

Recently Issued Accounting Standards

In April 2014, the Financial Accounting Standards Board (“FASB”) issued updated guidance that changes the criteria for reporting discontinued operations including enhanced disclosure requirements. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the organization´s operations and financial results. The standards update is effective for fiscal years beginning after December 15, 2014. We will adopt this standards update, as required, beginning with the first quarter of 2015. The adoption of this standards update affects presentation only and, as such, is not expected to have a material impact on our consolidated financial statements.

3. Restatement

While preparing recast historical financial information of the Company to account for the Allied Transaction as a combination of businesses under common control and subsequent to the filing of the Original Form 10-Q, management discovered errors in the Company’s unaudited financial statements included in the Original Form 10-Q.  This recast historical financial information was being

Page 8 of 26

CAMAC ENERGY INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

prepared in connection with the anticipated filing of a registration statement as required by the registration rights agreement between the Company and Allied.

In preparing this recast historical financial information, the Company discovered that it had miscalculated the crude oil inventory of the Allied Assets, misclassified the adjustments to the net assets of Allied on the cash flow statement and under accrued for certain production costs in connection with preparing the Original Form 10-Q.  The miscalculation resulted in an understatement of crude oil inventory as of December 31, 2013 and errors in the First Quarter 10-Q that were substantial enough to require a restatement of our unaudited financial statements included in the Original Form 10-Q.  Further, Allied informed the Company that it had received additional production cost information from third party vendors that required Allied to correct certain financial information previously provided to the Company with respect to the Allied Assets.  

The effects of the restatement are as follows:

Consolidated Balance Sheets
(In thousands)
	As of March 31, 2014									As of December 31, 2013
	As Previously Reported			Adjustments			As Restated			As Previously Reported			Adjustments			As Restated
Crude oil inventory	$	8,927		$	(737	)	$	8,190		$	6,787		$	9,467		$	16,254
Total current assets	$	56,347		$	(737	)	$	55,610		$	8,918		$	9,467		$	18,385
Oil and gas properties (successful efforts method of accounting), net	$	433,721		$	(767	)	$	432,954		$	436,471		$	(1,436	)	$	435,035
Total property, plant and equipment, net	$	434,676		$	(767	)	$	433,909		$	437,223		$	(1,436	)	$	435,787
Total assets	$	491,075		$	(1,504	)	$	489,571		$	446,193		$	8,031		$	454,224
Paid-in capital	$	638,365		$	4,155		$	642,520		$	732,985		$	3,471		$	736,456
Accumulated deficit	$	(358,091	)	$	(5,659	)	$	(363,750	)	$	(353,452	)	$	4,560		$	(348,892	)
Total equity	$	281,344		$	(1,504	)	$	279,840		$	379,915		$	8,031		$	387,946
Total liabilities and equity	$	491,075		$	(1,504	)	$	489,571		$	446,193		$	8,031		$	454,224

Consolidated Statements of Operations
(In thousands, except per share amounts)
	Three Months Ended March 31, 2014									Three Months Ended March 31, 2013
	As Previously Reported			Adjustments			As Restated			As Previously Reported			Adjustments			As Restated
Production costs	$	12,678		$	10,219		$	22,897		$	19,658		$	2,455		$	22,113
Total operating costs and expenses	$	24,358		$	10,219		$	34,577		$	30,035		$	2,455		$	32,490
Operating loss	$	(4,464	)	$	(10,219	)	$	(14,683	)	$	(8,029	)	$	(2,455	)	$	(10,484	)
Loss before income taxes	$	(4,639	)	$	(10,219	)	$	(14,858	)	$	(8,033	)	$	(2,455	)	$	(10,488	)
Net loss	$	(4,639	)	$	(10,219	)	$	(14,858	)	$	(8,033	)	$	(2,455	)	$	(10,488	)
Net loss per common share:
Basic	$	(0.01	)	$	(0.01	)	$	(0.02	)	$	(0.02	)	$	(0.01	)	$	(0.03	)
Diluted	$	(0.01	)	$	(0.01	)	$	(0.02	)	$	(0.02	)	$	(0.01	)	$	(0.03	)

Page 9 of 26

CAMAC ENERGY INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Statements of Cash Flows
(In thousands)
	Three Months Ended March 31, 2014									Three Months Ended March 31, 2013
	As Previously Reported			Adjustments			As Restated			As Previously Reported			Adjustments			As Restated
Cash flows from operating activities:
Net loss	$	(4,639	)	$	(10,219	)	$	(14,858	)	$	(8,033	)	$	(2,455	)	$	(10,488	)
Adjustments to the net assets of Allied	$	(9,855	)	$	9,855		$	-		$	1,591		$	(1,591	)	$	-
(Increase) decrease in inventories	$	(2,098	)	$	9,535		$	7,437		$	(1,422	)	$	2,455		$	1,033
Net cash used in operating activities	$	(12,943	)	$	9,171		$	(3,772	)	$	(1,122	)	$	(1,591	)	$	(2,713	)
Cash flows from financing activities:
Adjustments to the net assets of Allied	$	-		$	(9,171	)	$	(9,171	)	$	-		$	1,591		$	1,591
Net cash provided by financing activities	$	136,065		$	(9,171	)	$	126,894		$	-		$	1,591		$	1,591

4. Acquisitions – Restated

In February 2014, the Company completed the Allied Transaction thereby acquiring the Allied Assets. Pursuant to the terms of the Transfer Agreement, the Company, as partial consideration for the Allied Assets, paid $85.0 million in cash to Allied, issued 497,454,857 shares of the Company’s common stock to Allied and delivered a $50.0 million Convertible Subordinated Note (the “Convertible Subordinated Note”) to Allied under which $25.0 million was deemed advanced, with interest accruing per the terms of the Convertible Subordinated Note.

To fund the cash portion of the Allied Transaction and a portion of the anticipated capital expenditures for development of the Oyo Field, the Company also entered into a Share Purchase Agreement (the “Share Purchase Agreement”) with the Public Investment Corporation (SOC) Limited, a state-owned company registered and duly incorporated in the Republic of South Africa (“PIC”), for an aggregate cash investment of $270.0 million through a private placement of 376,884,422 shares of common stock (the “Private Placement”). The Share Purchase Agreement provides that the Private Placement will be completed in two installments. The first installment of $135.0 million (the “First Closing”) in exchange for 188,442,211 shares of the Company’s common stock was completed at the closing of the Allied Transaction. The second installment (the “Second Closing”) of $135.0 million in exchange for 188,442,211 shares of the Company’s common stock was completed in May 2014.

Following the Second Closing with the PIC, the Company was required to pay to Allied the additional $85.0 million in cash, and the additional $25.0 million Convertible Subordinated Note was deemed advanced with interest accruing per the terms of the Convertible Subordinated Note. As of the First Closing and pursuant to the terms of the Transfer Agreement, the Company was obligated for the full $50.0 million Convertible Subordinated Note and accordingly recorded this on the balance sheet at that time.

The contractual purchase consideration to be paid and the assets acquired and liabilities assumed are as follows (In thousands):

Cash consideration paid upon First Closing	$	85,000
Cash consideration to be paid upon Second Closing		85,000
CAMAC common stock		-
Long-term convertible subordinated note payable - related party		50,000
Total purchase price	$	220,000
Asset acquired and liabilities assumed:
Property, plant and equipment, net		248,736
Accounts payable		(25,429	)
Asset retirement obligations		(20,890	)
Net assets acquired		202,417
Consideration in excess of carrying value acquired	$	17,583

Page 10 of 26

CAMAC ENERGY INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The Allied Transaction is being accounted for as a transfer of entities under common control, whereby the net assets acquired are combined with the Company’s assets at their historical amounts.  Since the cash and debt consideration exceeds the carrying cost of the assets acquired, no value was assigned to the shares issued.

5. Property and Equipment – Restated

Property, plant and equipment is comprised of the following (In thousands):

	March 31,			December 31,
	2014			2013
Wells and production facilities	$	28,874		$	28,874
Proved properties		386,196			386,196
Warehouse inventory		25,429			25,429
Work in progress		62,955			61,205
Oilfield assets		503,454			501,704
Accumulated depletion		(78,740	)		(74,909	)
Oilfield assets, net		424,714			426,795
Unevaluated leaseholds		8,240			8,240
Oil and gas properties, net		432,954			435,035
Other property and equipment		1,866			1,590
Accumulated depreciation		(911	)		(838	)
Other property and equipment, net		955			752
Total property, plant and equipment, net	$	433,909		$	435,787

6. Suspended Exploratory Well Costs - Restated

In November 2013, the Company achieved both its primary and secondary drilling objectives for the Oyo-7 well. The primary drilling objective was to establish production from the existing Pliocene reservoir.  The secondary drilling objective confirmed the presence of hydrocarbons in the Miocene formation. Hydrocarbons were encountered in three intervals totaling approximately 65 feet, as interpreted by the logging while drilling (“LWD”) data. Management is making plans to further explore the Miocene formation.  As of March 31, 2014, the Company has capitalized $26.5 million for the costs related to the Miocene exploratory drilling activities.

7. Asset Retirement Obligations

The Company’s asset retirement obligations primarily represent the estimated fair value of the amounts that will be incurred to plug, abandon and remediate our producing properties at the end of their productive lives. Significant inputs used in determining such obligations include, but are not limited to, estimates of plugging and abandonment costs, estimated future inflation rates and changes in property lives. The inputs are calculated based on historical data as well as current estimated costs.

The following summarizes changes in the Company’s asset retirement obligations during the three months ended March 31, 2014:

	2014
	(In thousands)
Carrying amount at January 1	$	20,601
Accretion expense		440
Carrying amount at March 31	$	21,041

Accretion expense is recognized as a component of depreciation, depletion and amortization expense in the accompanying statements of operations.

Page 11 of 26

CAMAC ENERGY INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

8. Debt

Note Payable – Related Party

Promissory Note

In June 2011, CPL, a wholly owned subsidiary of the Company, executed a $25.0 million Promissory Note (the “Promissory Note”) in favor of Allied.  Interest accrues on the outstanding principal under the Promissory Note at a rate of the 30 day London Interbank Offered Rate (“LIBOR”) plus 2% per annum.  The Promissory Note is set to mature and become due July 2014.  In January 2014, Allied agreed to amend the Promissory Note and extend the maturity date to July 2015 in the event the Company is not successful in obtaining external financing by June 2014. The Company has guaranteed all of CPL’s obligations under the Promissory Note. As of March 31, 2014, $7.1 million was outstanding under the Promissory Note.

Allied Transaction

Included in the note payable – related party is $85.0 million due to Allied for the remaining cash consideration upon the Second Closing of the Private Placement with PIC.  See “Note 4 – Acquisitions - Restated”, for details relating to the Allied Transaction.

Long-Term Note Payable – Related Party

As partial consideration in connection with the February 2014 closing of the Allied Transaction, the Company issued the $50.0 million Convertible Subordinated Note in favor of Allied. The principal of the Convertible Subordinated Note was deemed advanced in two equal $25.0 million tranches at each of the First Closing and the Second Closing of the Private Placement. Interest on the Convertible Subordinated Note accrues at a rate per annum of one-month LIBOR plus 5%, payable quarterly in cash until the maturity of the Convertible Subordinated Note five years from the closing of the Allied Transaction. At the election of the holder, the Convertible Subordinated Note will be convertible into shares of the Company’s common stock at an initial conversion price of $0.7164 per share, subject to customary anti-dilution adjustments. The Convertible Subordinated Note is subordinated to the Company’s existing and future senior indebtedness and is subject to acceleration upon an Event of Default (as defined in the Convertible Subordinated Note). The Company may, at its option prepay the note, in whole or in part, at any time, without premium or penalty. The note is subject to mandatory prepayment upon (i) the Company’s issuance of capital stock or incurrence of indebtedness, the proceeds of which the Company does not apply to repayment of senior indebtedness or (ii) any capital markets debt issuance to the extent the net proceeds of such issuance exceed $250.0 million. Allied may assign all or any part of its rights and obligations under the Convertible Subordinated Note to any person upon written notice to the Company.

9. Share-Based Compensation

During the three months ended March 31, 2014, the Company issued 710,196 shares of common stock as a result of the vesting of restricted stock awards. During the three months ended March 31, 2014, the Company granted employees a total of  3,670,735 shares of restricted stock and options to purchase a total of 2,023,914 shares of common stock, with vesting periods from 24 months to 36 months.

Page 12 of 26

CAMAC ENERGY INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

10. Earnings (Loss) Per Common Share

Basic earnings (loss) per common share are computed by dividing net income (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. The weighted average number of common shares outstanding for computing basic and diluted earnings (loss) per common share for the three months ended March 31, 2014 and 2013 were as follows:

	Three Months Ended March 31,
	2014		2013
	(In thousands)
Basic		676,927		379,880
Diluted		676,927		379,880

The number of stock options and restricted stock awards that were excluded from dilutive shares outstanding as these potentially dilutive securities are anti-dilutive because the Company was in a loss position for the three months ended March 31, 2014 and 2013 were as follows:

	Three Months Ended March 31,
	2014		2013
	(In thousands)
Stock options		7,433		353
Nonvested restricted stock awards		7,500		1,561
		14,933		1,914

11. Financial Instruments and Fair Value Measurements

The carrying amounts of the Company’s financial instruments, which include cash and cash equivalents, trade receivables, inventory, accounts payable, accrued expenses, other long-term liabilities and debt at floating interest rates approximate their fair values at March 31, 2014, principally due to the short-term nature, maturities or nature of interest rates of the above listed items.

12. Commitments and Contingencies

Commitments

In January 2014, a long-term drilling contract was signed for the drillship Energy Searcher. The rig is expected to be delivered to the Oyo Field in OML 120 in May 2014 to commence the planned Oyo Field development campaign.  The agreement covers an initial term of one year, with an option to extend the contract for an additional one year. The minimum commitment pursuant to the initial term of the agreement is approximately $86.0 million.

In February 2014, a long-term contract was signed for the floating, production, storage, and offloading system (“FPSO”) Armada Perdana, the vessel that is currently connected to the Company’s producing wells Oyo-5 and Oyo-6 in OML 120. The contract provides for an initial term of seven years beginning January 1, 2014, with an automatic extension for an additional term of two years unless terminated by the Company with prior notice. The FPSO can process up to 40,000 barrels of liquid per day, with a storage capacity of approximately one million barrels.  The annual minimum commitment per the terms of the agreement is approximately $35.0 million in the first year and approximately $48.0 million thereafter.

The Company has substantial commitments related to four production sharing contracts with the Government of the Republic of Kenya (the “Kenya PSCs”) and two Petroleum Exploration, Development & Production Licenses with the Republic of The Gambia (the “Gambia Licenses”), in each case entered into by the Company through a wholly owned subsidiary. To maintain compliance and ownership, the Company is and will be required to fulfill minimum work obligations and to make certain payments as stated in each of the Kenya PSCs and The Gambia Licenses.

Legal Proceedings

From time to time we may be involved in various legal proceedings and claims in the ordinary course of our business. As of March 31, 2014, and through the filing date of this report, we do not believe the ultimate resolution of such actions or potential actions of which we are currently aware will have a material effect on our consolidated financial position or our results of operations.

Page 13 of 26

CAMAC ENERGY INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

13. Related Party Transactions

The Company has transactions in the normal course of business with its shareholders, CEHL and their affiliates. The following table summarizes related party transactions for the respective periods:

	March 31,		December 31,
	2014		2013
	(In thousands)
Accounts receivable	$	4,154	$	1,026
Other current assets	$	624	$	624
Accounts payable and accrued expenses	$	27,047	$	25,721
Note payable-related party	$	92,147	$	6,496
Long-term note payable-related party	$	50,000	$	-

The Company was owed $4.2 million and $1.0 million as of March 31, 2014 and December 31, 2013, respectively, for both crude oil lifting receivables and billings under the Technical Services Agreement (“TSA”) signed with Allied in January 2013. Under the TSA, the Company agreed to provide certain services related to the Oyo Field within OMLs 120 and 121, in exchange for payments from Allied of $150,000 per month with effect from September 2012.  The TSA was terminated as of the closing of the Allied Acquisition in February, 2014 pursuant to the Transfer Agreement.

The Company was owed $0.6 million as of March 31, 2014 and December 31, 2013, respectively, as a result of a prepayment made for royalty and petroleum profit taxes in Nigeria under the PSC.

As of March 31, 2014 and December 31, 2013, the Company owed $27.0 million and $25.7 million, respectively, to Allied as reimbursement for costs incurred for the benefit of the Company.

As of March 31, 2014 and December 31, 2013, the Company had outstanding notes payable balances of $92.1 million and $6.5 million, respectively, owed to Allied. Included in the note payable balance at March 31, 2014 is an amount of $85.0 million due to Allied for the remaining cash consideration upon the Second Closing of the Private Placement with PIC and the remaining principal balance of the Promissory Note with Allied.  See “Note 4 – Acquisitions - Restated”, for details relating to the Allied Transaction, and “Note 8 – Debt”, for details relating to the Promissory Note.

As partial consideration in connection with the February 2014 closing of the Allied Acquisition, the Company issued a $50.0 million Convertible Subordinated Note in favor of Allied.  See “Note 8 – Debt”,for details relating to the Convertible Subordinated Note.  

14. Segment Information - Restated

The Company’s operations are based in Nigeria, Kenya and The Gambia. Management reviews and evaluates the operations of each geographic segment separately. Segments include exploration for and production of hydrocarbons where commercial reserves have been found and developed. Revenues and expenditures are recognized at the relevant geographical location. The Company evaluates each segment based on operating income (loss).

The Company did not previously report separate segment information because management reviewed and evaluated the operations of the Company as a whole. However, beginning in the first quarter 2014, pursuant to the Allied Transaction and the significant exploration activities undertaken in several of our subsidiaries, management began to evaluate the operations of each geographic segment separately.

Page 14 of 26

CAMAC ENERGY INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Segment activity for the three months ended March 31, 2014 and 2013 are as follows (In thousands):

	Nigeria			Kenya			The Gambia			Corporate and Other			Total
Three months ended March 31,
2014
Revenues	$	19,894			-			-			-		$	19,894
Operating loss	$	(7,906	)		(1,992	)		(268	)		(4,517	)	$	(14,683	)
2013
Revenues	$	22,006			-			-			-		$	22,006
Operating loss	$	(5,543	)		(654	)		(236	)		(4,051	)	$	(10,484	)

Total assets by segment are as follows (In thousands):

	Nigeria		Kenya		The Gambia		Corporate and Other		Total
Total Assets
As of March 31, 2014	$	449,189		1,549		2,045		36,788	$	489,571
As of December 31, 2013	$	449,857		1,484		2,025		858	$	454,224

15.  Subsequent Events

In April 2014, the Company signed a Petroleum Agreement relating to the Expanded Shallow Water Tano block in Ghana.  The Company has been named technical operator and will hold a 30% interest in the block.  The block contains three discovered fields, and the work program requires the partners to determine, within nine months, the economic viability of developing the discovered fields.  

Page 15 of 26

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Our Business

CAMAC Energy Inc. is an independent exploration and production company engaged in the acquisition and development of energy resources in Africa. The Company’s exploration, development and production activities are currently focused in Sub-Saharan Africa. Our strategy is to acquire and develop high-potential exploration and production assets in Africa and to explore and develop those assets through strategic partnerships with national oil companies, indigenous local partners and other independent oil companies. Our shares are traded on the NYSE MKT under the symbol “CAK” and, as of February 24, 2014, on the Johannesburg Stock Exchange (“JSE”) under the symbol “CME”.

The Company’s asset portfolio consists of nine licenses in four countries covering an area of approximately 43,000 square kilometers (approximately 10 million acres). The Company has producing properties and conducts exploration activities in Nigeria, as well as exploration licenses with significant hydrocarbon potential onshore and offshore Kenya, offshore The Gambia and offshore Ghana.

The Company’s operating subsidiaries are CAMAC Energy Limited,  CAMAC Petroleum Limited, CAMAC Energy International Limited, CAMAC Energy Ghana Limited, CAMAC Energy Kenya Limited, CAMAC Energy Gambia A5 Limited and CAMAC Energy Gambia A2 Limited and the Company’s related parties include CAMAC Energy Holdings Limited, CAMAC International Nigeria Limited, CAMAC International Limited and Allied Energy Plc. (“Allied”). The terms “we,” “us,” “our,” “Company,” and “our Company” refer to CAMAC and its subsidiaries and affiliates.

In February 2014, the Company completed the acquisition of the remaining economic interests that it did not already own in the Production Sharing Contract (“PSC”) covering Oil Mining Leases 120 and 121 (“OMLs 120 and 121”) offshore Nigeria, which include the currently producing Oyo Field (the “Allied Assets”), from Allied (the “Allied Transaction”). Pursuant to the terms of the Transfer Agreement, the Company, as partial consideration for the Allied Assets, paid $85.0 million in cash to Allied, issued 497,454,857 shares of the Company’s common stock to Allied and delivered a $50.0 million Convertible Subordinated Note (the “Convertible Subordinated Note”) to Allied under which $25.0 million was deemed to be advanced.

To fund the cash portion of the Allied Transaction and a portion of the anticipated capital expenditures for development of the Oyo Field, the Company also entered into a Share Purchase Agreement (the “Share Purchase Agreement”) with the Public Investment Corporation (SOC) Limited, a state-owned company registered and duly incorporated in the Republic of South Africa (“PIC”), for an aggregate cash investment of $270.0 million through a private placement of 376,884,422 shares of common stock (the “Private Placement”). The Share Purchase Agreement provides that the Private Placement will be completed in two installments. The first installment of $135.0 million (the “First Closing”) in exchange for 188,442,211 shares of the Company’s common stock was completed at the closing of the Allied Transaction. The second installment (the “Second Closing”) of $135.0 million in exchange for 188,442,211 shares of the Company’s common stock was completed in May 2014.

Following the Second Closing with the PIC, the Company was required to pay to Allied the additional $85.0 million in cash, and the additional $25.0 million was deemed to be advanced to Allied under the Convertible Subordinated Note.  

In connection with preparing recasted historical financial information for the Company to account for the Allied Transaction as a combination of businesses under common control and subsequent to filing its original Form 10-Q for the period ended March 31, 2014 (as filed on May 9, 2014, the “Original Form 10-Q”), the Company identified certain errors in the financial information contained in the Original Form 10-Q.  As a result, previously reported financial information has been restated to reflect the correction of these errors.  For a further discussion of the impact of this restatement, see “Note 3 – Restatement” in the Notes to the Unaudited Consolidated Financial Statements in this Form 10-Q/A.

Nigeria

The Company currently owns 100% of the economic interests under the PSC and related assets, contracts and rights pertaining to OMLs 120 and 121 including the producing Oyo Field, which is located in deep-water offshore Nigeria.

From September 2013 to November 2013, the first phase of drilling operations was conducted on the Oyo-7 well in OML 120. Based on logging while drilling (“LWD”) data, the well encountered gross oil pay of 133 feet (net oil pay of 115 feet) and gross gas pay of 103 feet (net gas pay of 93 feet) in the gas cap from the currently producing Pliocene reservoir, with excellent reservoir quality. As a secondary objective, the Oyo-7 well confirmed the presence of hydrocarbons in the deeper Miocene formation. This marked the first time a well had been successfully drilled into the Miocene formation of OML 120. Hydrocarbons were encountered in three intervals totaling approximately 65 feet, as interpreted from the LWD data. Currently, the Oyo-7 well has been temporarily plugged and suspended but is expected to be re-entered and completed in the Pliocene reservoir as an oil producer in late 2014.

Page 16 of 26

In January 2014, a long-term drilling contract was signed for the drillship Energy Searcher. The rig is expected to be delivered to the Oyo Field in OML 120 by May 2014 to commence the planned Oyo Field development campaign. The agreement covers an initial term of one year, with an option to extend the contract for an additional one year. The minimum commitment pursuant to the initial term of the agreement is approximately $86.0 million.

In order to optimize drilling, completion, and production activities, current plans are to spud the Oyo-8 well by mid-2014, with well-hookup and first production expected in late 2014.  The drilling rig will then move to complete and hook-up the Oyo-7 well, with first production expected in late 2014. 

In addition to the development wells offshore Nigeria, the Company has identified ten exploration prospects and twelve leads, and is in the process of maturing three prospects, each containing substantial prospective resources. The Company currently plans to drill at least one of these prospects in 2015.

In February 2014, a long-term contract was signed for the floating, production, storage, and offloading system (“FPSO”) Armada Perdana, the vessel that is currently connected to the Company’s producing wells Oyo-5 and Oyo-6 in OML 120. The contract provides for an initial term of seven years beginning January 1, 2014, with an automatic extension for an additional term of two years unless terminated by the Company with prior notice. The FPSO can process up to 40,000 barrels of liquid per day, with a storage capacity of approximately one million barrels. The annual minimum commitment per the terms of the agreement is approximately $35.0 million in the first year and approximately $48.0 million thereafter.

Kenya

In May 2012, the Company, through a wholly owned subsidiary, entered into four production sharing contracts with the Government of the Republic of Kenya (the “Kenya PSCs”), covering onshore exploration blocks L1B and L16, and new offshore exploration blocks L27 and L28. For all blocks, the Company is the operator, with the Government having the right to participate up to 20%, either directly or through an appointee, in any area subsequent to declaration of a commercial discovery. The Company is responsible for all exploration expenditures.

The Kenya PSCs for blocks L1B and L16 each provide for an initial exploration period of two years with specified minimum work obligations during that period. Prior to the end of the initial exploration period, the Company will conduct, for each block, a gravity and magnetic survey and acquire, process and interpret 2D seismic data. The gravity and magnetic survey on blocks L1B and L16 was completed in April 2013. The Company plans to apply for an additional two-year exploration period, so in December 2013, the Company initiated an Environmental and Social Impact Assessment (“ESIA”) study in blocks L1B and L16. The ESIA study was successfully completed in March 2014, and the reports were submitted for approval to the Kenya National Environment Management Authority in order to obtain the license to carry out an additional 2D seismic survey in the two blocks. The Company has the right to apply for up to two additional two-year exploration periods with specified additional minimum work obligations, including the acquisition of 3D seismic data and the drilling of one exploratory well on each block during each such additional period for both onshore blocks.

The Kenya PSCs for blocks L27 and L28 each provide for an initial exploration period of three years with specified minimum work obligations during that period. Prior to the end of the initial exploration period, the Company will conduct, for each block, a regional geological and geophysical study, acquire 2D seismic data and acquire, process and interpret 3D seismic data. The Company has the right to apply for up to two additional two-year exploration periods with specified additional minimum work obligations, including the drilling of one exploratory well on each block, during each such additional period. The Company participated in a multi-client combined gravity / magnetic and 2D seismic survey covering blocks L27 and L28.  The survey was successfully completed in March 2014, and data processing is underway.  Also, in March 2014 the Company started the regional geophysical study for these two blocks.

In addition to the minimum work obligations, each of the Kenya PSCs requires annual surface rental payments, training fund payments and contributions to local community development projects.

The Gambia

In May 2012, the Company, through a wholly owned subsidiary, signed two Petroleum Exploration, Development & Production Licenses with The Republic of The Gambia, for offshore exploration blocks A2 and A5. For both blocks, the Company is the operator, with the Gambian National Petroleum Company (“GNPCo”) having the right to elect to participate up to a 15% interest, following approval of a development and production plan. The Company is responsible for all expenditures prior to such approval even if the GNPCo elects to participate.

Page 17 of 26

The Gambia Licenses for both blocks provide for an initial exploration period of four years with specified minimum work obligations during that period. Prior to the end of the initial exploration period, the Company will conduct, for each block, a regional geological study, acquire, process and interpret seismic data, drill one exploration well and evaluate drilling results, with the first two work obligations (regional geological study and 3D seismic data acquisition and processing) due prior to the end of the second year. The Company has the right to apply for up to two additional two-year exploration periods with specified additional minimum work obligations, including the drilling of one exploration well during each additional period for each block.

In addition to the minimum work obligations, The Gambia Licenses require annual surface rental payments, training and community fees.

Recent Developments

In April 2014, the Company signed a Petroleum Agreement relating to the Expanded Shallow Water Tano block in Ghana.  The Company has been named technical operator and will hold a 30% interest in the block.  The block contains three discovered fields, and the work program requires the partners to determine, within nine months, the economic viability of developing the discovered fields.  

The Company continues to pursue new energy ventures outside the U.S., directly and through joint ventures and other partnerships in which it may participate.

Results of Operations

The following discussion pertains to the Company’s results of operations, financial condition, liquidity and capital resources and should be read together with our unaudited consolidated financial statements and the notes thereto contained in this report and our audited consolidated financial statements and notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2013.  

Three months ended March 31, 2014, compared to the three months ended March 31, 2013:

Revenues

Revenue is recognized when a lifting (sale) occurs. Crude oil revenues for the three months ended March 31, 2014 were $19.9 million, as compared to $22.0 million for the three months ended March 31, 2013.  For the three months ended March 31, 2014, the Company sold approximately 182,000 net barrels of oil at an average price of $109.11/Bbl. In the three months ended, March 31, 2013, the Company sold approximately 203,000 net barrels of oil at an average price of $108.35/Bbl.

During the three months ended March 31, 2014, the average net daily production from the Oyo Field was approximately 1,700 BOPD, as compared to approximately 2,000 BOPD for the three months ended March 31, 2013.

Operating Costs and Expenses

Production costs for the three months ended March 31, 2014 were $22.9 million, as compared to $22.1 million for the three months ended March 31, 2013.  

During the three months ended March 31, 2014, the Company incurred $2.3 million of exploration expenses, including $2.0 million spent in Kenya, and $0.3 million spent in The Gambia.  During the three months ended March 31, 2013, the Company incurred $1.2 million of exploration expenses, including $0.5 million spent at the corporate level for exploration activities, $0.5 million in Kenya, and $0.2 million in The Gambia.

Depreciation, depletion and amortization (“DD&A”) expenses for the three months ended March 31, 2014 were $5.0 million, as compared to $5.5 million for the three months ended March 31, 2013. In the three months ended March 31, 2014, DD&A expenses decreased as compared to the three months ended March 31, 2013 primarily due to both lower depletion rates and lower sales volumes.  The average depletion rate for the three months ended March 31, 2014 was $24.06/Bbl, as compared to $27.37/Bbl for the three months ended March 31, 2013.

General and administrative expenses for the three months ended March 31, 2014 were $4.4 million, as compared to $3.7 million for the three months ended March 31, 2013. The increase in general and administrative expenses for the three months ended March 31, 2014, as compared to the three months ended March 31, 2013, was primarily due to legal costs incurred in conjunction with the Allied Transaction and the Private Placement. In addition, the Company incurred non-cash stock-based compensation expenses of $0.5 million and $0.3 million for the three months ended March 31, 2014 and 2013, respectively.

Page 18 of 26

Other Income (Expense)

Other expense for the three months ended March 31, 2014 was $0.2 million, primarily for interest accrued on the related party note payable. Other expense was approximately $4,000 for the three months ended March 31, 2013.

Income Taxes

Income taxes were nil for the three months ended March 31, 2014 and 2013.

Headline Earnings 

In February 2014, the Company’s common stock became listed on the JSE.  The Company is required to publish all documents filed with the SEC with the JSE.  The JSE requires that we calculate Headline Earnings Per Share (“HEPS”) which, per the SEC, is considered a non-GAAP measurement. 

As defined in the Circular 3/2009 of The South African Institute of Chartered Accountants, headline earnings is an additional earnings number that excludes certain separately identifiable remeasurements, net of related tax, and related non-controlling interest.

The number of shares used to calculate basic and diluted HEPS is the same as basic and diluted EPS. In the three months ended March 31, 2014 and 2013, there were no separate identifiable remeasurements required and headline earnings was the same as net loss per share as disclosed on the unaudited consolidated statements of operations.  Therefore, HEPS for the three months ended March 31, 2014 and 2013, were $(0.02) and $(0.03), respectively.

Liquidity and Capital Resources  

As of March 31, 2014, the Company had current asset and current liability balances of $55.6 million and $151.4 million, respectively, resulting in a net working capital deficit of $95.8 million.  Included in the current liability balance of $151.4 million, was approximately $118.0 million owed to Allied, a related party.

During the three months ended March 31, 2014, net cash used in operating activities was $3.8 million as compared to $2.7 million for the three months ended March 31, 2013. The net increase in cash used in operating activities of $1.1 million was primarily due to $4.4 million higher net loss, partially offset by $3.6 million positive variance in changes in operating assets and liabilities.

During the three months ended March 31, 2014, net cash used in investing activities was $87.1 million, including $85.0 million paid to Allied as partial consideration for the Allied Assets, and $2.1 million spent for additions to property, plant and equipment. During the three months ended March 31, 2013, net cash used in investing activities were $0.4 million primarily for additions to property, plant and equipment.

During the three months ended March 31, 2014, net cash provided by financing activities was $126.9 million as compared to $1.6 million for the three months ended March 31, 2013.  The net increase in cash provided by financing activities was primarily due to the $135.0 million investment from the PIC, $0.4 million for the issuance of stock pursuant to employee stock option exercises and $0.7 million additional borrowings under the Promissory Note, partially offset by a $9.2 million adjustment to the net assets of Allied in connection with the Allied Transaction.

The Company has a $25.0 million borrowing facility under a Promissory Note with Allied.   As of March 31, 2014, $7.1 million was outstanding under the Promissory Note.  The Promissory Note is set to mature and become due on July 15, 2014.  In January 2014, Allied agreed to amend the Promissory Note and extend the maturity date to July 15, 2015 in the event the Company is not successful in obtaining external financing arrangements by June 30, 2014.

In February 2014, the Company completed the Allied Transaction and the First Closing of the Private Placement in accordance with the terms of the Transfer Agreement and the Share Purchase Agreement, respectively. The Company received $135.0 million pursuant to the Second Closing of the Private Placement in May 2014.  Subsequently, the Company paid Allied the additional $85.0 million in cash, resulting in a net $50.0 million available to the Company.

Page 19 of 26

As partial consideration in connection with the February 2014 closing of the Allied Transaction, the Company issued the $50.0 million Convertible Subordinated Note in favor of Allied. The principal of the Convertible Subordinated Note was deemed advanced in two equal $25.0 million tranches at each of the First Closing and the Second Closing of the Private Placement. Interest on the Convertible Subordinated Note accrues at a rate per annum of one-month LIBOR plus 5%, payable quarterly in cash until the maturity of the Convertible Subordinated Note five years from the closing of the Allied Transaction. At the election of the holder, the Convertible Subordinated Note will be convertible into shares of the Company’s common stock at an initial conversion price of $0.7164 per share, subject to customary anti-dilution adjustments. The Convertible Subordinated Note is subordinated to the Company’s existing and future senior indebtedness and is subject to acceleration upon an Event of Default (as defined in the Convertible Subordinated Note). The Company may, at its option prepay the note, in whole or in part, at any time, without premium or penalty. The note is subject to mandatory prepayment upon (i) the Company’s issuance of capital stock or incurrence of indebtedness, the proceeds of which the Company does not apply to repayment of senior indebtedness or (ii) any capital markets debt issuance to the extent the net proceeds of such issuance exceed $250.0 million. Allied may assign all or any part of its rights and obligations under the Convertible Subordinated Note to any person upon written notice to the Company.

Although there are no assurances that the Company’s plans will be realized, management believes that the Company will have sufficient capital resources to meet projected cash flow requirements for the next twelve months from the date of filing this report.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements, other than normal operating leases and employee contracts, that have or are likely to have a current or future material effect on our financial condition, changes in financial condition, revenues, expenses, results of operations, liquidity, capital expenditures or capital resources.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

All statements, other than statements of historical fact, included in this report, including without limitation the statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are, or may be deemed to be, forward-looking statements. Such forward-looking statements involve assumptions, known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements contained in this report.

We may from time to time make written or oral forward-looking statements with respect to our long-term objectives or expectations which may be included in our filings with the SEC, reports to stockholders and information provided on our website.

The words or phrases “will likely,” “are expected to,” “is anticipated,” “is predicted,” “forecast,” “estimate,” “project,” “plans to continue,” “believes,” or similar expressions identify “forward-looking statements.” Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. We wish to caution you not to place undue reliance on any such forward-looking statements, which speak only as of the date made. We are calling to your attention important factors that could affect our financial performance and could cause actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements.

The following list of important factors may not be all-inclusive, and we specifically decline to undertake an obligation to publicly revise any forward-looking statements that have been made to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. Among the factors that could have an impact on our ability to achieve expected operating results and growth plan goals and/or affect the market price of our stock are:

· Limited operating history, operating revenue or earnings history.

· Ability to raise capital to fund our business plan, including developing the Oyo Field and other oil and gas licenses we may participate in, on terms and conditions acceptable to the Company.

· Ability to develop oil and gas reserves.

· Dependence on key personnel, technical services and contractor support.

· Fluctuation in quarterly operating results.

· Possible significant influence over corporate affairs by significant stockholders.

· Ability to enter into definitive agreements to formalize foreign energy ventures and secure necessary exploitation rights.

· Ability to successfully integrate and operate acquired or newly formed entities and multiple foreign energy ventures and subsidiaries.

· Competition from large petroleum and other energy interests.

· Changes in laws and regulations that affect our operations and the energy industry in general.

Page 20 of 26

· Risks and uncertainties associated with exploration, development and production of oil and gas, and drilling and production risks.

· Expropriation and other risks associated with foreign operations.

· Risks associated with anticipated and ongoing third party pipeline construction and transportation of oil and gas.

· The lack of availability of oil and gas field goods and services.

· Environmental risks and changing economic conditions.

For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see “Risk Factors” in Item 1A of Part II of this report and in our Annual Report on Form 10-K for the year ended December 31, 2013.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company may be exposed to certain market risks related to changes in foreign currency exchange, interest rates, and commodity prices.

Foreign Currency Exchange Risk

In addition to the U.S. dollar, the Company pays some of its expenses in Nigeria, The Gambia, and Kenya in Naira, Dalasi, and Shillings respectively. Therefore we are subject to foreign currency exchange risk on non-U.S. dollar denominated transactions on cash flows.

To date the Company has not engaged in hedging activities to hedge our foreign currency exposure in Nigeria. In the future, the Company may enter into hedging instruments to manage its foreign currency exchange risk or continue to be subject to exchange rate risk.

Commodity Price Risk

As an independent oil producer, our revenue, other income and profitability, reserve values, access to capital and future rate of growth are substantially dependent upon the prevailing prices of crude oil. Prevailing prices for such commodities are subject to wide fluctuations in response to relatively minor changes in supply and demand and a variety of additional factors beyond our control. Historically, prices received for oil production have been volatile and unpredictable, and such volatility is expected to continue.

Interest Rate Risk

We are exposed to changes in interest rates which affect the interest earned on our interest-bearing deposits and the interest paid on the Promissory Note and the Convertible Subordinated Note. Currently, we do not use interest rate derivative instruments to manage exposure to interest rate changes. At March 31, 2014, we had $7.1 million and $25.0 million principal and interest outstanding under the Promissory Note and the Convertible Subordinated Note, respectively.  Interest on the Promissory Note accrues at a rate per annum equal to 2% plus LIBOR and interest on the Convertible Subordinated Note accrues at a rate per annum equal to 5% plus the one-month LIBOR. The maturity date of the Promissory Note is July 15, 2014, subject to extension to July 15, 2015 in the event the Company is not successful in obtaining external financing arrangements by June 30, 2014, and the maturity date for the Convertible Subordinated Note is January 15, 2019.

Page 21 of 26

ITEM 4. CONTROLS AND PROCEDURES

Restatement

In connection with preparing recasted historical financial information for the Company to account for the Allied Transaction as a combination of businesses under common control and subsequent to filing the Original Form 10-Q, the Company discovered it had miscalculated the crude oil inventory of its Allied Assets, misclassified the adjustments to the net assets of Allied on the cash flow statement and under accrued for certain production costs in connection with preparing the Original Form 10-Q. As a result of these matters, the unaudited financial statements contained in the Original Form 10-Q contained errors that required a restatement.  For a further discussion of these errors and their impact on our Unaudited Consolidated Financial Statements contained in the Original Form 10-Q, see “Note 3 – Restatement” in the Notes to Unaudited Consolidated Financial Statements in this Form 10-Q/A.

Description of Material Weakness at March 31, 2014

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended) such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis.  As a result of the restatement described above, management, including our Chief Executive Officer and Chief Financial Officer, concluded that, as of March 31, 2014, there was a material weakness in our internal control over financial reporting with respect to complex, non-recurring transactions. Management is actively engaged in developing a remediation plan to address this material weakness and will provide an update as to the Company’s implementation of remediation measures on a subsequent Quarterly Report on Form 10-Q.

Evaluation of Disclosure Controls and Procedures

Management of the Company, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as of March 31, 2014 in connection with the Company’s filing of the Original Form 10-Q on May 9, 2014.  Based on their evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective.  

However, as described above, it has recently been determined that a material weakness existed in the Company’s internal control over financial reporting with respect to complex, non-recurring transactions.  Accordingly, the Company’s Chief Executive Officer and Chief Financial Officer have since concluded that the Company’s disclosure controls and procedures were not effective as of March 31, 2014.  

Changes in Internal Control Over Financial Reporting

Subject to the foregoing description of the material weakness in internal control over financial reporting and our efforts to remediate such material weakness, there have not been any changes in our internal control over financial reporting during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Page 22 of 26

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The disclosures required in this Item 1 are included in “Note 12 - Commitments and Contingencies”, in the unaudited consolidated financial statements included in Part I, Financial Information, Item 1, Financial Statements and incorporated herein by reference.

Item 1A.  Risk Factors

The risk factor below is an addition to the risk factors previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K filed with the SEC on March 14, 2014 for the fiscal year ended December 31, 2013.

A material weakness in our internal control over financial reporting with respect to complex, non-recurring transactions could, if not remediated, result in a misstatement of the annual or interim financial statements.

We are required to maintain effective internal controls over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our consolidated financial statements in accordance with generally accepted accounting principles.  It has been determined that we had a material weakness as of March 31, 2014 relating to our internal controls over complex, non-recurring transactions, and management is actively engaged in developing a remediation plan to address this material weakness.  If we are unsuccessful in remediating this material weakness, it could result in a misstatement of our future annual or interim financial statements in the event of future complex transactions.

Item 5. Other Information

The Second Closing of the Private Placement was completed on May 6, 2014.  Pursuant to the terms of the Share Purchase Agreement, PIC paid $135.0 million to the Company in exchange for 188,442,211 shares of the Company’s common stock.  On May 8, 2014, in accordance with the terms of the Transfer Agreement, the Company paid to Allied the additional $85.0 million in cash, and the additional $25.0 million was deemed advanced to Allied under the Convertible Subordinated Note.

The material terms of the Transfer Agreement and the Share Purchase Agreement were reported in Items 1.01, 2.03 and 3.02 of the Company’s Current Report on Form 8-K filed with the SEC on November 22, 2013, and are incorporated herein by reference.  The descriptions of the Transfer Agreement and Share Purchase Agreement above are summaries only and are respectively qualified in their entirety by reference to the Transfer Agreement and the Share Purchase Agreement, copies of which were attached as Exhibits 2.1 and 10.1, respectively, to the Company’s Current Report on Form 8-K filed with the SEC on November 22, 2013, and are hereby incorporated herein by reference.

The material terms of the Convertible Subordinated Note were reported in Items 1.01, 2.03 and 3.02 of the Company’s Current Report on Form 8-K filed with the SEC on February 27, 2014, and are incorporated herein by reference.  The description of the Convertible Subordinated Note above is a summary only and is qualified in its entirely by reference to the Convertible Subordinated Note, a copy of which was attached as Exhibit 4.2 to the Company’s Current Report on Form 8-K filed with the SEC on February 27, 2014, and is hereby incorporated herein by reference.

Page 23 of 26

Item 6. Exhibits

The following exhibits are filed with this report:

Exhibit Number	Description
3.1	Amended and Restated Certificate of Incorporation of the Company (incorporated herein by reference to Exhibit 3.1 to the Company’s Form 10-SB filed on August 16, 2007).
3.2	Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Company (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on April 13, 2010).
3.3	Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Company (incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on February 19, 2014).
3.4	Amended and Restated Bylaws of the Company as of April 11, 2011 (incorporated by reference to Exhibit 3.1 of our Quarterly Report on Form 10-Q filed on May 3, 2011).
4.1	Registration Rights Agreement, dated February 21, 2014, by and between the Company and Allied Energy Plc. (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on February 27, 2014).
4.2	Convertible Subordinated Promissory Note, dated February 21, 2014, by the Company in favor of Allied Energy Plc. (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on February 27, 2014).
4.3	Registration Rights Agreement, dated February 21, 2014, by and between the Company and the Public Investment Corporation (SOC) Limited (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K filed on February 27, 2014).
10.1	Assignment and Bill of Sale, dated February 21, 2014, by and among Allied Energy Plc, CAMAC International (Nigeria) Limited and CAMAC Petroleum Limited (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on February 27, 2014).
10.2	Right of First Refusal and Corporate Opportunities Agreement, dated February 21, 2014, by and among the Company, CAMAC Energy Holdings Limited, CAMAC International (Nigeria) Limited and Allied Energy Plc. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on February 27, 2014)
10.3	Contract for Bareboat Charterparty for FPSO Armada Perdana in the Oyo Field Development, dated February 17, 2014, by and between Armada Oyo Limited and CAMAC Petroleum Limited (as successor-in-interest to Oceanic Consultants Nigeria Limited) (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 10-Q filed on May 9, 2014).
10.4	Contract for Provision of Operational and Maintenance Services for FPSO Armada Perdana in the Oyo Field Development, dated February 17, 2014, by and between Bumi Armada (Singapore) Pte. Ltd. and CAMAC Petroleum Limited (as successor in interest to Oceanic) (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 10-Q filed on May 9, 2014).
10.5	Head International Daywork Drilling Contract – Offshore, dated as of February 20, 2014, by and between Oceanic Consultants Nigeria Limited and CAMAC Petroleum Limited (as successor-in-interest to Allied Energy Plc.) (incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 10-Q filed on May 9, 2014).
10.6	Deed of Novation, dated March 25 2014, by and among Armada Oyo Limited, Oceanic Consultants Nigeria Limited and CAMAC Petroleum Limited (incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 10-Q filed on May 9, 2014).
10.7	Deed of Novation, dated March 25, 2014, by and among Bumi Armada (Singapore) Pte. Ltd., Oceanic Consultants Nigeria Limited and CAMAC Petroleum Limited (incorporated by reference to Exhibit 10.7 to the Company’s Current Report on Form 10-Q filed on May 9, 2014).
10.8	Deed of Novation, dated March 28, 2014, by and among Allied Energy Plc, Oceanic Consultants Nigeria Limited and CAMAC Petroleum Limited (incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 10-Q filed on May 9, 2014).
31.1	Certification of Chief Executive Officer Pursuant to 15 U.S.C. § 7241, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Principal Financial Officer Pursuant to 15 U.S.C. § 7241, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. § 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Principal Financial Officer Pursuant to 18 U.S.C. § 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101. INS	XBRL Instance Document.
101. SCH	XBRL Schema Document.
101. CAL	XBRL Calculation Linkbase Document.
101. DEF	XBRL Taxonomy Extension Definition Linkbase Document

Page 24 of 26

Exhibit Number	Description
101. LAB	XBRL Label Linkbase Document.
101. PRE	XBRL Presentation Linkbase Document.

Page 25 of 26

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

CAMAC Energy Inc.

Date: July 18, 2014

/s/ Earl W. McNiel

Earl W. McNiel

Senior Vice President and Chief Financial Officer
(Principal Financial Officer)

Page 26 of 26

EX-31

Exhibit 31.1

CERTIFICATION PURSUANT TO

15 U.S.C. § 7241

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Dr. Kase Lukman Lawal, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q/A of CAMAC Energy Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 18, 2014	/s/ Dr. Kase Lukman Lawal
	Dr. Kase Lukman Lawal
	Chief Executive Officer
	(Principal Executive Officer)

EX-31

Exhibit 31.2

CERTIFICATION PURSUANT TO

15 U.S.C. § 7241

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Earl W. McNiel, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q/A of CAMAC Energy Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements and other financial information included in this report, fairly present, in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 18, 2014	/s/ Earl W. McNiel
	Earl W. McNiel Senior Vice President and Chief Financial Officer (Principal Financial Officer)

EX-32

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. § 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned hereby certifies, in his capacity as the Principal Executive Officer of CAMAC Energy Inc. (the “Company”), that the Quarterly Report of the Company on Form 10-Q/A for the quarter ended March 31, 2014 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in such report fairly presents, in all material respects, the financial condition and the results of operations of the Company.

Date: July 18, 2014	/s/ Dr. Kase Lukman Lawal
	Dr. Kase Lukman Lawal
	Chief Executive Officer
	(Principal Executive Officer)

EX-32

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. § 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned hereby certifies, in his capacity as the Principal Financial Officer of CAMAC Energy Inc. (the “Company”), that the Quarterly Report of the Company on Form 10-Q/A for the quarter ended March 31, 2014 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, and that the information contained in such report fairly presents, in all material respects, the financial condition and the results of operations of the Company. 

Date: July 18, 2014	/s/ Earl W. McNiel
	Earl W. McNiel
	Senior Vice President and Chief Financial Officer
	(Principal Financial Officer)

XML

Asset Retirement Obligations - Summary of Change in Asset Retirement Obligations (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Long Lived Assets To Be Abandoned [Line Items]
Carrying amount	$ 20,601
Accretion expense	440	541
Carrying amount	$ 21,041

XML

Subsequent Events (Details) (Subsequent Event)	Apr. 01, 2014 block
Subsequent Event
Subsequent Event [Line Items]
Percentage of interest in Expanded Shallow Water Tano block	30.00%
Number of discovered fields	3

XML

Related Party Transactions - Additional Information (Details) (USD $)				3 Months Ended
	Mar. 31, 2014	Dec. 31, 2013	Feb. 28, 2014 Convertible Subordinated Note to Allied	Mar. 31, 2014 Monthly Revenue From Allied
Related Party Transaction [Line Items]
Crude oil lifting receivables and billings	$ 4,154,000	$ 1,026,000
Revenue from Related Parties				150,000
Other current assets	624,000	624,000
Accounts payable and accrued expenses	27,047,000	25,721,000
Executed subsidiary Promissory Note	92,100,000	6,500,000
Due to Related Parties	85,000,000
Convertible subordinate note issued			$ 50,000,000

XML

Effects of the Restatement of Consolidated Statements of Operations (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Production costs	$ 22,897	$ 22,113
Total operating costs and expenses	34,577	32,490
Operating loss	(14,683)	(10,484)
Loss before income taxes	(14,858)	(10,488)
Net loss	(14,858)	(10,488)
Net loss per common share:
Basic	$ (0.02)	$ (0.03)
Diluted	$ (0.02)	$ (0.03)
As Previously Reported
Production costs	12,678	19,658
Total operating costs and expenses	24,358	30,035
Operating loss	(4,464)	(8,029)
Loss before income taxes	(4,639)	(8,033)
Net loss	(4,639)	(8,033)
Net loss per common share:
Basic	$ (0.01)	$ (0.02)
Diluted	$ (0.01)	$ (0.02)
Adjustments
Production costs	10,219	2,455
Total operating costs and expenses	10,219	2,455
Operating loss	(10,219)	(2,455)
Loss before income taxes	(10,219)	(2,455)
Net loss	$ (10,219)	$ (2,455)
Net loss per common share:
Basic	$ (0.01)	$ (0.01)
Diluted	$ (0.01)	$ (0.01)

XML

Property and Equipment - Restated (Tables)

3 Months Ended

Mar. 31, 2014

Property, Plant and Equipment

Property, plant and equipment is comprised of the following (In thousands):

	March 31,			December 31,
	2014			2013
Wells and production facilities	$	28,874		$	28,874
Proved properties		386,196			386,196
Warehouse inventory		25,429			25,429
Work in progress		62,955			61,205
Oilfield assets		503,454			501,704
Accumulated depletion		(78,740	)		(74,909	)
Oilfield assets, net		424,714			426,795
Unevaluated leaseholds		8,240			8,240
Oil and gas properties, net		432,954			435,035
Other property and equipment		1,866			1,590
Accumulated depreciation		(911	)		(838	)
Other property and equipment, net		955			752
Total property, plant and equipment, net	$	433,909		$	435,787

XML

Weighted Average Number of Common Shares Outstanding for Computing Basic and Diluted Earnings (Loss) Per Common Share (Details) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Weighted Average Number of Common Shares Outstanding [Abstract]
Basic	676,927	379,880
Diluted	676,927	379,880

XML

Property, Plant and Equipment (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Property Plant And Equipment [Line Items]
Wells and production facilities	$ 28,874	$ 28,874
Proved properties	386,196	386,196
Warehouse inventory	25,429	25,429
Work in progress	62,955	61,205
Oilfield assets	503,454	501,704
Accumulated depletion	(78,740)	(74,909)
Oilfield assets, net	424,714	426,795
Unevaluated leaseholds	8,240	8,240
Oil and gas properties, net	432,954	435,035
Other property and equipment	1,866	1,590
Accumulated depreciation	(911)	(838)
Other property and equipment, net	955	752
Total property, plant and equipment, net	$ 433,909	$ 435,787

XML

Segment Activity (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Segment Reporting Information [Line Items]
Revenues	$ 19,894	$ 22,006
Operating loss	(14,683)	(10,484)
Total assets	489,571		454,224
Corporate and Other
Segment Reporting Information [Line Items]
Operating loss	(4,517)	(4,051)
Total assets	36,788		858
Nigeria
Segment Reporting Information [Line Items]
Revenues	19,894	22,006
Operating loss	(7,906)	(5,543)
Total assets	449,189		449,857
Kenya
Segment Reporting Information [Line Items]
Operating loss	(1,992)	(654)
Total assets	1,549		1,484
Gambia
Segment Reporting Information [Line Items]
Operating loss	(268)	(236)
Total assets	$ 2,045		$ 2,025

XML

Restatement

3 Months Ended

Mar. 31, 2014

Restatement

3. Restatement

While preparing recast historical financial information of the Company to account for the Allied Transaction as a combination of businesses under common control and subsequent to the filing of the Original Form 10-Q, management discovered errors in the Company’s unaudited financial statements included in the Original Form 10-Q.  This recast historical financial information was being prepared in connection with the anticipated filing of a registration statement as required by the registration rights agreement between the Company and Allied.

In preparing this recast historical financial information, the Company discovered that it had miscalculated the crude oil inventory of the Allied Assets, misclassified the adjustments to the net assets of Allied on the cash flow statement and under accrued for certain production costs in connection with preparing the Original Form 10-Q. The miscalculation resulted in an understatement of crude oil inventory as of December 31, 2013 and errors in the First Quarter 10-Q that were substantial enough to require a restatement of our unaudited financial statements included in the Original Form 10-Q.  Further, Allied informed the Company that it had received additional production cost information from third party vendors that required Allied to correct certain financial information previously provided to the Company with respect to the Allied Assets.  

The effects of the restatement are as follows:

Consolidated Balance Sheets
(In thousands)
	As of March 31, 2014									As of December 31, 2013
	As Previously Reported			Adjustments			As Restated			As Previously Reported			Adjustments			As Restated
Crude oil inventory	$	8,927		$	(737	)	$	8,190		$	6,787		$	9,467		$	16,254
Total current assets	$	56,347		$	(737	)	$	55,610		$	8,918		$	9,467		$	18,385
Oil and gas properties (successful efforts method of accounting), net	$	433,721		$	(767	)	$	432,954		$	436,471		$	(1,436	)	$	435,035
Total property, plant and equipment, net	$	434,676		$	(767	)	$	433,909		$	437,223		$	(1,436	)	$	435,787
Total assets	$	491,075		$	(1,504	)	$	489,571		$	446,193		$	8,031		$	454,224
Paid-in capital	$	638,365		$	4,155		$	642,520		$	732,985		$	3,471		$	736,456
Accumulated deficit	$	(358,091	)	$	(5,659	)	$	(363,750	)	$	(353,452	)	$	4,560		$	(348,892	)
Total equity	$	281,344		$	(1,504	)	$	279,840		$	379,915		$	8,031		$	387,946
Total liabilities and equity	$	491,075		$	(1,504	)	$	489,571		$	446,193		$	8,031		$	454,224

Consolidated Statements of Operations
(In thousands, except per share amounts)
	Three Months Ended March 31, 2014									Three Months Ended March 31, 2013
	As Previously Reported			Adjustments			As Restated			As Previously Reported			Adjustments			As Restated
Production costs	$	12,678		$	10,219		$	22,897		$	19,658		$	2,455		$	22,113
Total operating costs and expenses	$	24,358		$	10,219		$	34,577		$	30,035		$	2,455		$	32,490
Operating loss	$	(4,464	)	$	(10,219	)	$	(14,683	)	$	(8,029	)	$	(2,455	)	$	(10,484	)
Loss before income taxes	$	(4,639	)	$	(10,219	)	$	(14,858	)	$	(8,033	)	$	(2,455	)	$	(10,488	)
Net loss	$	(4,639	)	$	(10,219	)	$	(14,858	)	$	(8,033	)	$	(2,455	)	$	(10,488	)
Net loss per common share:
Basic	$	(0.01	)	$	(0.01	)	$	(0.02	)	$	(0.02	)	$	(0.01	)	$	(0.03	)
Diluted	$	(0.01	)	$	(0.01	)	$	(0.02	)	$	(0.02	)	$	(0.01	)	$	(0.03	)

Consolidated Statements of Cash Flows
(In thousands)
	Three Months Ended March 31, 2014									Three Months Ended March 31, 2013
	As Previously Reported			Adjustments			As Restated			As Previously Reported			Adjustments			As Restated
Cash flows from operating activities:
Net loss	$	(4,639	)	$	(10,219	)	$	(14,858	)	$	(8,033	)	$	(2,455	)	$	(10,488	)
Adjustments to the net assets of Allied	$	(9,855	)	$	9,855		$	-		$	1,591		$	(1,591	)	$	-
(Increase) decrease in inventories	$	(2,098	)	$	9,535		$	7,437		$	(1,422	)	$	2,455		$	1,033
Net cash used in operating activities	$	(12,943	)	$	9,171		$	(3,772	)	$	(1,122	)	$	(1,591	)	$	(2,713	)
Cash flows from financing activities:
Adjustments to the net assets of Allied	$	-		$	(9,171	)	$	(9,171	)	$	-		$	1,591		$	1,591
Net cash provided by financing activities	$	136,065		$	(9,171	)	$	126,894		$	-		$	1,591		$	1,591

XML

Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities	14,933	1,914
Stock options
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities	7,433	353
Nonvested restricted stock awards
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities	7,500	1,561

XML

Segment Information - Restated (Tables)

3 Months Ended

Mar. 31, 2014

Schedule of Segment Activity

Segment activity for the three months ended March 31, 2014 and 2013 are as follows (In thousands):

	Nigeria			Kenya			The Gambia			Corporate and Other			Total
Three months ended March 31,
2014
Revenues	$	19,894			-			-			-		$	19,894
Operating loss	$	(7,906	)		(1,992	)		(268	)		(4,517	)	$	(14,683	)
2013
Revenues	$	22,006			-			-			-		$	22,006
Operating loss	$	(5,543	)		(654	)		(236	)		(4,051	)	$	(10,484	)

Total assets by segment are as follows (In thousands):

	Nigeria		Kenya		The Gambia		Corporate and Other		Total
Total Assets
As of March 31, 2014	$	449,189		1,549		2,045		36,788	$	489,571
As of December 31, 2013	$	449,857		1,484		2,025		858	$	454,224

XML

Related Party Transactions (Tables)

3 Months Ended

Mar. 31, 2014

Summary of Related Party Transactions and Balances

The Company has transactions in the normal course of business with its shareholders, CEHL and their affiliates. The following table summarizes related party transactions for the respective periods:

	March 31,		December 31,
	2014		2013
	(In thousands)
Accounts receivable	$	4,154	$	1,026
Other current assets	$	624	$	624
Accounts payable and accrued expenses	$	27,047	$	25,721
Note payable-related party	$	92,147	$	6,496
Long-term note payable-related party	$	50,000	$	-

XML

Commitments and Contingencies - Additional Information (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2014 bbl
Other Commitments [Line Items]
Minimum commitment	$ 86.0
Barrels processing capacity	40,000
Maximum storage capacity for the FPSO	1,000,000
Minimum commitment, due in first year	35.0
Minimum commitment, due thereafter	$ 48.0
the “Kenya PSCs”
Other Commitments [Line Items]
Production sharing contracts with the Government of the Republic of Kenya	4
the “Gambia Licenses”
Other Commitments [Line Items]
Petroleum Exploration, Development & Production Licenses with the Republic of the Gambia	2

XML

Company Description - Additional Information (Details)	Mar. 31, 2014 License Country acre
Company description [Abstract]
Area of land held for exploration activities	10,000,000
Number of countries company operates in Africa	4
Number of exploration and production licenses	9

XML

Restatement - Additional Information (Details) (Restatement Adjustment)	3 Months Ended
	Mar. 31, 2014
Restatement Adjustment
Restatement, description	The miscalculation resulted in an understatement of crude oil inventory as of December 31, 2013 and errors in the First Quarter 10-Q that were substantial enough to require a restatement of our unaudited financial statements included in the Original Form 10-Q. Further, Allied informed the Company that it had received additional production cost information from third party vendors that required Allied to correct certain financial information previously provided to the Company with respect to the Allied Assets.

XML

Basis of Presentation and Recently Issued Accounting Standards

3 Months Ended

Mar. 31, 2014

Basis of Presentation and Recently Issued Accounting Standards

2. Basis of Presentation and Recently Issued Accounting Standards

The accompanying unaudited consolidated financial statements and related disclosures in this Amendment No. 1 on Form 10-Q/A have been restated.  For further discussion, see “Note 3 – Restatement”.

The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly owned and majority-owned direct and indirect subsidiaries and have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). All significant intercompany transactions and balances have been eliminated in consolidation. The unaudited consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the consolidated financial position and results of operations for the indicated periods. All such adjustments are of a normal recurring nature.  This Form 10-Q should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2013.

In February 2014, the Company completed the acquisition of the remaining economic interests that it did not already own in the Production Sharing Contract (“PSC”) covering Oil Mining Leases 120 and 121 (“OMLs 120 and 121”) offshore Nigeria, which include the currently producing Oyo Field (the “Allied Assets”), from Allied (the “Allied Transaction”). Allied is a subsidiary of CEHL, the Company’s majority shareholder and deemed to be under common control (transactions between subsidiaries of the same parent). Accordingly, the net assets acquired from Allied were recorded at their respective carrying values as of the acquisition date. The financial statements presented for all periods included herein are presented as though the transfer of the Allied assets had occurred at the beginning of the first period presented.

Recently Issued Accounting Standards

In April 2014, the Financial Accounting Standards Board (“FASB”) issued updated guidance that changes the criteria for reporting discontinued operations including enhanced disclosure requirements. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the organization´s operations and financial results. The standards update is effective for fiscal years beginning after December 15, 2014. We will adopt this standards update, as required, beginning with the first quarter of 2015. The adoption of this standards update affects presentation only and, as such, is not expected to have a material impact on our consolidated financial statements.

XML

Effects of the Restatement of Consolidated Balance Sheets (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Crude oil inventory	$ 8,190	$ 16,254
Total current assets	55,610	18,385
Oil and gas properties (successful efforts method of accounting), net	432,954	435,035
Total property, plant and equipment, net	433,909	435,787
Total assets	489,571	454,224
Paid-in capital	642,520	736,456
Accumulated deficit	(363,750)	(348,892)
Total equity	279,840	387,946
Total liabilities and equity	489,571	454,224
As Previously Reported
Crude oil inventory	8,927	6,787
Total current assets	56,347	8,918
Oil and gas properties (successful efforts method of accounting), net	433,721	436,471
Total property, plant and equipment, net	434,676	437,223
Total assets	491,075	446,193
Paid-in capital	638,365	732,985
Accumulated deficit	(358,091)	(353,452)
Total equity	281,344	379,915
Total liabilities and equity	491,075	446,193
Adjustments
Crude oil inventory	(737)	9,467
Total current assets	(737)	9,467
Oil and gas properties (successful efforts method of accounting), net	(767)	(1,436)
Total property, plant and equipment, net	(767)	(1,436)
Total assets	(1,504)	8,031
Paid-in capital	4,155	3,471
Accumulated deficit	(5,659)	4,560
Total equity	(1,504)	8,031
Total liabilities and equity	$ (1,504)	$ 8,031

XML

Debt - Additional Information (Details) (USD $)					1 Months Ended
	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2014 Promissory Note To Allied	Jun. 30, 2011 Promissory Note To Allied	Feb. 28, 2014 Convertible Subordinated Note to Allied Tranches	Jun. 30, 2011 London Interbank Offered Rate (LIBOR) Promissory Note To Allied	Feb. 28, 2014 London Interbank Offered Rate (LIBOR) Convertible Subordinated Note to Allied
Disclosure Debt Additional Information Details [Line Items]
Executed subsidiary Promissory Note	$ 92,100,000	$ 6,500,000		$ 25,000,000
Debt Instrument, Basis Spread on Variable Rate						2.00%	5.00%
Note payable - related party	92,147,000	6,496,000	7,100,000
Due to Related Parties	85,000,000
Convertible subordinate note issued					50,000,000
Number of tranches					2
Convertible Subordinated Note Deemed Advanced					25,000,000
Debt instrument, convertible, conversion price					$ 0.7164
Long-term Debt, Description					The note is subject to mandatory prepayment upon (i) the Company’s issuance of capital stock or incurrence of indebtedness, the proceeds of which the Company does not apply to repayment of senior indebtedness or (ii) any capital markets debt issuance to the extent the net proceeds of such issuance exceed $250.0 million.
Minimum threshold proceeds from capital market debt issuance for mandatory prepayment option					$ 250,000,000

XML

CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 36,235	$ 163
Accounts receivable	4,154	1,112
Crude oil inventory	8,190	16,254
Prepaids and other current assets	7,031	856
Total current assets	55,610	18,385
Property, plant and equipment:
Oil and gas properties (successful efforts method of accounting), net	432,954	435,035
Other property, plant and equipment, net	955	752
Total property, plant and equipment, net	433,909	435,787
Other assets	52	52
Total Assets	489,571	454,224
Current liabilities:
Accounts payable	35,475	31,668
Accrued expenses	10,999	7,446
Asset retirement obligations	12,751	12,479
Note payable - related party	92,147	6,496
Total current liabilities	151,372	58,089
Asset retirement obligations	8,291	8,122
Long-term note payable - related party	50,000
Other long-term liabilities	68	67
Total liabilities	209,731	66,278
Equity:
Preferred stock $0.001 par value - 50,000,000 shares authorized; zero issued and outstanding at March 31, 2014 and December 31, 2013
Common stock $0.001 par value - 2,500,000,000 shares authorized; 1,070,430,276 and 382,362,236 shares issued and outstanding as of March 31, 2014 and December 31, 2013	1,070	382
Paid-in capital	642,520	736,456
Accumulated deficit	(363,750)	(348,892)
Total equity	279,840	387,946
Total liabilities and equity	$ 489,571	$ 454,224

XML

Summary of Related Party Transactions and Balances (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Related Party Transaction [Line Items]
Accounts receivable	$ 4,154	$ 1,026
Other current assets	624	624
Accounts payable and accrued expenses	27,047	25,721
Note payable - related party	92,147	6,496
Long-term note payable - related party	$ 50,000

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Cash flows from operating activities
Net loss	$ (14,858)	$ (10,488)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation, depletion and amortization	4,531	4,926
Asset retirement obligation accretion	440	541
Stock-based compensation	507	338
Other		1
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable	(3,042)	(348)
(Increase) decrease in inventories	7,437	1,033
(Increase) decrease in other current assets	(6,175)	39
Increase (decrease) in accounts payable and accrued liabilities	7,388	1,245
Net cash used in operating activities	(3,772)	(2,713)
Cash flows from investing activities
Capital expenditures	(2,050)	(352)
Acquisition - related party	(85,000)
Net cash used in investing activities	(87,050)	(352)
Cash flows from financing activities
Proceeds from issuance of common stock	135,000
Adjustments to the net assets of Allied	(9,171)	1,591
Proceeds from note payable - related party	650
Proceeds from exercise of stock options	415
Net cash provided by financing activities	126,894	1,591
Net increase (decrease) in cash and cash equivalents	36,072	(1,474)
Cash and cash equivalents at beginning of period	163	3,806
Cash and cash equivalents at end of period	36,235	2,332
Cash paid for:
Interest, net	$ 8	$ 4

XML

Acquisitions - Restated - Additional information (Details) (USD $)		1 Months Ended
	Mar. 31, 2014	Feb. 28, 2014 Share Purchase Agreement Private Placement Installment	Feb. 28, 2014 Share Purchase Agreement Installment One Private Placement	May 31, 2014 Subsequent Event Share Purchase Agreement Installment Two Private Placement	Feb. 28, 2014 Allied Transaction Convertible Subordinated Note	May 31, 2014 Allied Transaction Subsequent Event Convertible Subordinated Note
Business Acquisition [Line Items]
Convertible subordinate note issued					$ 50,000,000
Convertible Subordinated Note Deemed Advanced					25,000,000	25,000,000
Business acquisition, number of shares issued		376,884,422	188,442,211	188,442,211	497,454,857
Cash consideration					85,000,000	85,000,000
Business Acquisition, value of shares issued		270,000,000	135,000,000	135,000,000
Number of installments		2
Long-term note payable - related party	$ 50,000,000

XML

Basis of Presentation and Recently Issued Accounting Standards (Policies)

3 Months Ended

Mar. 31, 2014

Basis of Presentation

The accompanying unaudited consolidated financial statements and related disclosures in this Amendment No. 1 on Form 10-Q/A have been restated.  For further discussion, see “Note 3 – Restatement”.

The accompanying unaudited consolidated financial statements include the accounts of the Company and its wholly owned and majority-owned direct and indirect subsidiaries and have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). All significant intercompany transactions and balances have been eliminated in consolidation. The unaudited consolidated financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the consolidated financial position and results of operations for the indicated periods. All such adjustments are of a normal recurring nature.  This Form 10-Q should be read in conjunction with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2013.

In February 2014, the Company completed the acquisition of the remaining economic interests that it did not already own in the Production Sharing Contract (“PSC”) covering Oil Mining Leases 120 and 121 (“OMLs 120 and 121”) offshore Nigeria, which include the currently producing Oyo Field (the “Allied Assets”), from Allied (the “Allied Transaction”). Allied is a subsidiary of CEHL, the Company’s majority shareholder and deemed to be under common control (transactions between subsidiaries of the same parent). Accordingly, the net assets acquired from Allied were recorded at their respective carrying values as of the acquisition date. The financial statements presented for all periods included herein are presented as though the transfer of the Allied assets had occurred at the beginning of the first period presented.

Recently Issued Accounting Standards

Recently Issued Accounting Standards

In April 2014, the Financial Accounting Standards Board (“FASB”) issued updated guidance that changes the criteria for reporting discontinued operations including enhanced disclosure requirements. Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the organization´s operations and financial results. The standards update is effective for fiscal years beginning after December 15, 2014. We will adopt this standards update, as required, beginning with the first quarter of 2015. The adoption of this standards update affects presentation only and, as such, is not expected to have a material impact on our consolidated financial statements.

XML

Purchase Consideration Paid and Assets Acquired and Liabilities Assumed (Details) (USD $) In Thousands, unless otherwise specified	1 Months Ended
	Feb. 28, 2014	Feb. 28, 2014 Cash consideration paid upon First Closing	May 31, 2014 Subsequent Event Cash consideration to be paid upon Second Closing
Business Acquisition [Line Items]
Cash consideration		$ 85,000	$ 85,000
CAMAC common stock
Long-term convertible subordinated note payable - related party	50,000
Total purchase price	220,000
Property, plant and equipment, net	248,736
Accounts payable	(25,429)
Asset retirement obligations	(20,890)
Net assets acquired	202,417
Consideration in excess of carrying value acquired	$ 17,583

XML

Acquisitions - Restated (Tables)

3 Months Ended

Mar. 31, 2014

Schedule of Purchase Consideration Assets Acquired and Liabilities Assumed

The contractual purchase consideration to be paid and the assets acquired and liabilities assumed are as follows (In thousands):

Cash consideration paid upon First Closing	$	85,000
Cash consideration to be paid upon Second Closing		85,000
CAMAC common stock		-
Long-term convertible subordinated note payable - related party		50,000
Total purchase price	$	220,000
Asset acquired and liabilities assumed:
Property, plant and equipment, net		248,736
Accounts payable		(25,429	)
Asset retirement obligations		(20,890	)
Net assets acquired		202,417
Consideration in excess of carrying value acquired	$	17,583

XML

Company Description

3 Months Ended

Mar. 31, 2014

Company Description

1. Company Description

CAMAC Energy, Inc. (NYSE MKT: CAK, JSE: CME) is an independent exploration and production company engaged in the acquisition and development of energy resources in Africa. The Company’s asset portfolio consists of nine licenses in four countries covering an area of approximately 43,000 square kilometers (approximately 10 million acres). The Company has producing properties and conducts exploration activities in Nigeria, as well as exploration licenses with significant hydrocarbon potential onshore and offshore Kenya, offshore The Gambia and offshore Ghana.

The Company’s corporate headquarters is located in Houston, Texas.  In addition, the Company has offices in Nairobi, Kenya, Banjul, The Gambia and Lagos, Nigeria.

The Company’s operating subsidiaries are CAMAC Energy Limited, CAMAC Petroleum Limited (“CPL”), CAMAC Energy International Limited, CAMAC Energy Ghana Limited, CAMAC Energy Kenya Limited, CAMAC Energy Gambia A5 Limited and CAMAC Energy Gambia A2 Limited. The terms “we,” “us,” “our,” “Company,” and “our Company” refer to CAMAC and its subsidiaries and affiliates.

The Company’s related parties include CAMAC Energy Holdings Limited (“CEHL”), CAMAC International Nigeria Limited, CAMAC International Limited and Allied Energy Plc. (“Allied”).

XML

CONSOLIDATED BALANCE SHEETS (Parentheticals) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Preferred stock par value (in Dollars per share)	$ 0.001	$ 0.001
Preferred stock, authorized shares	50,000,000	50,000,000
Preferred stock, issued shares	0	0
Preferred stock, outstanding shares	0	0
Common stock, par value (in Dollars per share)	$ 0.001	$ 0.001
Common stock, authorized shares	2,500,000,000	2,500,000,000
Common stock, issued shares	1,070,430,276	382,362,236
Common stock, outstanding shares	1,070,430,276	382,362,236

XML

Financial Instruments and Fair Value Measurements

3 Months Ended

Mar. 31, 2014

Financial Instruments and Fair Value Measurements

11. Financial Instruments and Fair Value Measurements

The carrying amounts of the Company’s financial instruments, which include cash and cash equivalents, trade receivables, inventory, accounts payable, accrued expenses, other long-term liabilities and debt at floating interest rates approximate their fair values at March 31, 2014, principally due to the short-term nature, maturities or nature of interest rates of the above listed items.

XML

Document And Entity Information	3 Months Ended
	Mar. 31, 2014	May 06, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	CAMAC Energy Inc.
Document Type	10-Q/A
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		1,259,844,291
Amendment Flag	true
Amendment Description	This Amendment No. 1 to the Quarterly Report on Form 10-Q/A of CAMAC Energy Inc. (the “Company”) for the three months ended March 31, 2014 is being filed to amend and restate in their entirety the following items of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 that was filed on May 9, 2014 (the “Original Form 10-Q”): (i) Item 1 of Part I, “Financial Information”; (ii) Item 2 of Part I, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”; (iii) Item 4 of Part I, “Controls and Procedures”; and (iv) Item 6 of Part II, “Exhibits.” We have also updated the signature page, the certifications of our Chief Executive Officer and Chief Financial Officer in Exhibits 31.1, 31.2, 32.1 and 32.2, respectively, and our unaudited consolidated financial statements formatted in Extensible Business Reporting Language (XBRL) in Exhibit 101. No other sections were affected or have been changed. However, for the convenience of the reader, this Form 10-Q/A restates in its entirety the Original Form 10-Q. This Form 10-Q/A is presented as of the filing date of the Original Form 10-Q and does not reflect events occurring after that date, or modify or update disclosures in any way, other than as required to reflect the restatement. Accordingly, this Form 10-Q/A should be read in conjunction with the Company’s other filings made with the Securities and Exchange Commission subsequent to the filing of the Original Form 10-Q, including any amendments to those filings. This Form 10-Q/A, and the restated financial statements contained herein, is being filed because of errors discovered by management in the unaudited consolidated financial statements included in the Original Form 10-Q. Further details of the errors and the impact on the unaudited financial statements set forth in the Original Form 10-Q are contained in “Note 3 – Restatement” in the Notes to the Unaudited Consolidated Financial Statements in this Form 10-Q/A.
Entity Central Index Key	0001402281
Entity Filer Category	Accelerated Filer
Document Period End Date	Mar. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1

XML

Commitments and Contingencies

3 Months Ended

Mar. 31, 2014

Commitments and Contingencies

12. Commitments and Contingencies

Commitments

In January 2014, a long-term drilling contract was signed for the drillship Energy Searcher. The rig is expected to be delivered to the Oyo Field in OML 120 in May 2014 to commence the planned Oyo Field development campaign.  The agreement covers an initial term of one year, with an option to extend the contract for an additional one year. The minimum commitment pursuant to the initial term of the agreement is approximately $86.0 million.

In February 2014, a long-term contract was signed for the floating, production, storage, and offloading system (“FPSO”) Armada Perdana, the vessel that is currently connected to the Company’s producing wells Oyo-5 and Oyo-6 in OML 120. The contract provides for an initial term of seven years beginning January 1, 2014, with an automatic extension for an additional term of two years unless terminated by the Company with prior notice. The FPSO can process up to 40,000 barrels of liquid per day, with a storage capacity of approximately one million barrels.  The annual minimum commitment per the terms of the agreement is approximately $35.0 million in the first year and approximately $48.0 million thereafter.

The Company has substantial commitments related to four production sharing contracts with the Government of the Republic of Kenya (the “Kenya PSCs”) and two Petroleum Exploration, Development & Production Licenses with the Republic of The Gambia (the “Gambia Licenses”), in each case entered into by the Company through a wholly owned subsidiary. To maintain compliance and ownership, the Company is and will be required to fulfill minimum work obligations and to make certain payments as stated in each of the Kenya PSCs and The Gambia Licenses.

Legal Proceedings

From time to time we may be involved in various legal proceedings and claims in the ordinary course of our business. As of March 31, 2014, and through the filing date of this report, we do not believe the ultimate resolution of such actions or potential actions of which we are currently aware will have a material effect on our consolidated financial position or our results of operations.

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Revenues:
Oil and gas revenue	$ 19,894	$ 22,006
Operating costs and expenses:
Production costs	22,897	22,113
Exploratory expenses	2,276	1,198
Depreciation, depletion and amortization	4,971	5,467
General and administrative expenses	4,433	3,712
Total operating costs and expenses	34,577	32,490
Operating loss	(14,683)	(10,484)
Other income (expense):
Interest expense	(185)	(4)
Other, net	10
Total other income (expense)	(175)	(4)
Loss before income taxes	(14,858)	(10,488)
Income tax expense
Net loss	$ (14,858)	$ (10,488)
Net (loss) income per common share:
Basic	$ (0.02)	$ (0.03)
Diluted	$ (0.02)	$ (0.03)
Weighted average common shares outstanding:
Basic	676,927	379,880
Diluted	676,927	379,880

XML

Suspended Exploratory Well Costs - Restated

3 Months Ended

Mar. 31, 2014

Suspended Exploratory Well Costs - Restated

6. Suspended Exploratory Well Costs - Restated

In November 2013, the Company achieved both its primary and secondary drilling objectives for the Oyo-7 well. The primary drilling objective was to establish production from the existing Pliocene reservoir.  The secondary drilling objective confirmed the presence of hydrocarbons in the Miocene formation. Hydrocarbons were encountered in three intervals totaling approximately 65 feet, as interpreted by the logging while drilling (“LWD”) data. Management is making plans to further explore the Miocene formation.  As of March 31, 2014, the Company has capitalized $26.5 million for the costs related to the Miocene exploratory drilling activities.

XML

Property and Equipment - Restated

3 Months Ended

Mar. 31, 2014

Property and Equipment - Restated

5. Property and Equipment – Restated

Property, plant and equipment is comprised of the following (In thousands):

	March 31,			December 31,
	2014			2013
Wells and production facilities	$	28,874		$	28,874
Proved properties		386,196			386,196
Warehouse inventory		25,429			25,429
Work in progress		62,955			61,205
Oilfield assets		503,454			501,704
Accumulated depletion		(78,740	)		(74,909	)
Oilfield assets, net		424,714			426,795
Unevaluated leaseholds		8,240			8,240
Oil and gas properties, net		432,954			435,035
Other property and equipment		1,866			1,590
Accumulated depreciation		(911	)		(838	)
Other property and equipment, net		955			752
Total property, plant and equipment, net	$	433,909		$	435,787

XML

Restatement (Tables) (Restatement Adjustment)

3 Months Ended

Mar. 31, 2014

Restatement Adjustment

Effects of the Restatement of Consolidated Balance Sheets

The effects of the restatement are as follows:

Consolidated Balance Sheets
(In thousands)
	As of March 31, 2014									As of December 31, 2013
	As Previously Reported			Adjustments			As Restated			As Previously Reported			Adjustments			As Restated
Crude oil inventory	$	8,927		$	(737	)	$	8,190		$	6,787		$	9,467		$	16,254
Total current assets	$	56,347		$	(737	)	$	55,610		$	8,918		$	9,467		$	18,385
Oil and gas properties (successful efforts method of accounting), net	$	433,721		$	(767	)	$	432,954		$	436,471		$	(1,436	)	$	435,035
Total property, plant and equipment, net	$	434,676		$	(767	)	$	433,909		$	437,223		$	(1,436	)	$	435,787
Total assets	$	491,075		$	(1,504	)	$	489,571		$	446,193		$	8,031		$	454,224
Paid-in capital	$	638,365		$	4,155		$	642,520		$	732,985		$	3,471		$	736,456
Accumulated deficit	$	(358,091	)	$	(5,659	)	$	(363,750	)	$	(353,452	)	$	4,560		$	(348,892	)
Total equity	$	281,344		$	(1,504	)	$	279,840		$	379,915		$	8,031		$	387,946
Total liabilities and equity	$	491,075		$	(1,504	)	$	489,571		$	446,193		$	8,031		$	454,224

Effects of the Restatement of Consolidated Statements of Operations

The effects of the restatement are as follows:

Consolidated Statements of Operations
(In thousands, except per share amounts)
	Three Months Ended March 31, 2014									Three Months Ended March 31, 2013
	As Previously Reported			Adjustments			As Restated			As Previously Reported			Adjustments			As Restated
Production costs	$	12,678		$	10,219		$	22,897		$	19,658		$	2,455		$	22,113
Total operating costs and expenses	$	24,358		$	10,219		$	34,577		$	30,035		$	2,455		$	32,490
Operating loss	$	(4,464	)	$	(10,219	)	$	(14,683	)	$	(8,029	)	$	(2,455	)	$	(10,484	)
Loss before income taxes	$	(4,639	)	$	(10,219	)	$	(14,858	)	$	(8,033	)	$	(2,455	)	$	(10,488	)
Net loss	$	(4,639	)	$	(10,219	)	$	(14,858	)	$	(8,033	)	$	(2,455	)	$	(10,488	)
Net loss per common share:
Basic	$	(0.01	)	$	(0.01	)	$	(0.02	)	$	(0.02	)	$	(0.01	)	$	(0.03	)
Diluted	$	(0.01	)	$	(0.01	)	$	(0.02	)	$	(0.02	)	$	(0.01	)	$	(0.03	)

Effects of the Restatement of Consolidated Statements of Cash Flows

The effects of the restatement are as follows:

Consolidated Statements of Cash Flows
(In thousands)
	Three Months Ended March 31, 2014									Three Months Ended March 31, 2013
	As Previously Reported			Adjustments			As Restated			As Previously Reported			Adjustments			As Restated
Cash flows from operating activities:
Net loss	$	(4,639	)	$	(10,219	)	$	(14,858	)	$	(8,033	)	$	(2,455	)	$	(10,488	)
Adjustments to the net assets of Allied	$	(9,855	)	$	9,855		$	-		$	1,591		$	(1,591	)	$	-
(Increase) decrease in inventories	$	(2,098	)	$	9,535		$	7,437		$	(1,422	)	$	2,455		$	1,033
Net cash used in operating activities	$	(12,943	)	$	9,171		$	(3,772	)	$	(1,122	)	$	(1,591	)	$	(2,713	)
Cash flows from financing activities:
Adjustments to the net assets of Allied	$	-		$	(9,171	)	$	(9,171	)	$	-		$	1,591		$	1,591
Net cash provided by financing activities	$	136,065		$	(9,171	)	$	126,894		$	-		$	1,591		$	1,591

XML

Related Party Transactions

3 Months Ended

Mar. 31, 2014

Related Party Transactions

13. Related Party Transactions

The Company has transactions in the normal course of business with its shareholders, CEHL and their affiliates. The following table summarizes related party transactions for the respective periods:

	March 31,		December 31,
	2014		2013
	(In thousands)
Accounts receivable	$	4,154	$	1,026
Other current assets	$	624	$	624
Accounts payable and accrued expenses	$	27,047	$	25,721
Note payable-related party	$	92,147	$	6,496
Long-term note payable-related party	$	50,000	$	-

The Company was owed $4.2 million and $1.0 million as of March 31, 2014 and December 31, 2013, respectively, for both crude oil lifting receivables and billings under the Technical Services Agreement (“TSA”) signed with Allied in January 2013. Under the TSA, the Company agreed to provide certain services related to the Oyo Field within OMLs 120 and 121, in exchange for payments from Allied of $150,000 per month with effect from September 2012.  The TSA was terminated as of the closing of the Allied Acquisition in February, 2014 pursuant to the Transfer Agreement.

The Company was owed $0.6 million as of March 31, 2014 and December 31, 2013, respectively, as a result of a prepayment made for royalty and petroleum profit taxes in Nigeria under the PSC.

As of March 31, 2014 and December 31, 2013, the Company owed $27.0 million and $25.7 million, respectively, to Allied as reimbursement for costs incurred for the benefit of the Company.

As of March 31, 2014 and December 31, 2013, the Company had outstanding notes payable balances of $92.1 million and $6.5 million, respectively, owed to Allied. Included in the note payable balance at March 31, 2014 is an amount of $85.0 million due to Allied for the remaining cash consideration upon the Second Closing of the Private Placement with PIC and the remaining principal balance of the Promissory Note with Allied.  See “Note 4 – Acquisitions - Restated”, for details relating to the Allied Transaction, and “Note 8 – Debt”, for details relating to the Promissory Note.

As partial consideration in connection with the February 2014 closing of the Allied Acquisition, the Company issued a $50.0 million Convertible Subordinated Note in favor of Allied.  See “Note 8 – Debt”,for details relating to the Convertible Subordinated Note.  

XML

Share-Based Compensation

3 Months Ended

Mar. 31, 2014

Share-Based Compensation

9. Share-Based Compensation

During the three months ended March 31, 2014, the Company issued 710,196 shares of common stock as a result of the vesting of restricted stock awards. During the three months ended March 31, 2014, the Company granted employees a total of  3,670,735 shares of restricted stock and options to purchase a total of 2,023,914 shares of common stock, with vesting periods from 24 months to 36 months.

XML

Asset Retirement Obligations

3 Months Ended

Mar. 31, 2014

Asset Retirement Obligations

7. Asset Retirement Obligations

The Company’s asset retirement obligations primarily represent the estimated fair value of the amounts that will be incurred to plug, abandon and remediate our producing properties at the end of their productive lives. Significant inputs used in determining such obligations include, but are not limited to, estimates of plugging and abandonment costs, estimated future inflation rates and changes in property lives. The inputs are calculated based on historical data as well as current estimated costs.

The following summarizes changes in the Company’s asset retirement obligations during the three months ended March 31, 2014:

	2014
	(In thousands)
Carrying amount at January 1	$	20,601
Accretion expense		440
Carrying amount at March 31	$	21,041

Accretion expense is recognized as a component of depreciation, depletion and amortization expense in the accompanying statements of operations.

XML

Debt

3 Months Ended

Mar. 31, 2014

Debt

8. Debt

Note Payable – Related Party

Promissory Note

In June 2011, CPL, a wholly owned subsidiary of the Company, executed a $25.0 million Promissory Note (the “Promissory Note”) in favor of Allied.  Interest accrues on the outstanding principal under the Promissory Note at a rate of the 30 day London Interbank Offered Rate (“LIBOR”) plus 2% per annum.  The Promissory Note is set to mature and become due July 2014.  In January 2014, Allied agreed to amend the Promissory Note and extend the maturity date to July 2015 in the event the Company is not successful in obtaining external financing by June 2014. The Company has guaranteed all of CPL’s obligations under the Promissory Note. As of March 31, 2014, $7.1 million was outstanding under the Promissory Note.

Allied Transaction

Included in the note payable – related party is $85.0 million due to Allied for the remaining cash consideration upon the Second Closing of the Private Placement with PIC.  See “Note 4 – Acquisitions - Restated”, for details relating to the Allied Transaction.

Long-Term Note Payable – Related Party

As partial consideration in connection with the February 2014 closing of the Allied Transaction, the Company issued the $50.0 million Convertible Subordinated Note in favor of Allied. The principal of the Convertible Subordinated Note was deemed advanced in two equal $25.0 million tranches at each of the First Closing and the Second Closing of the Private Placement. Interest on the Convertible Subordinated Note accrues at a rate per annum of one-month LIBOR plus 5%, payable quarterly in cash until the maturity of the Convertible Subordinated Note five years from the closing of the Allied Transaction. At the election of the holder, the Convertible Subordinated Note will be convertible into shares of the Company’s common stock at an initial conversion price of $0.7164 per share, subject to customary anti-dilution adjustments. The Convertible Subordinated Note is subordinated to the Company’s existing and future senior indebtedness and is subject to acceleration upon an Event of Default (as defined in the Convertible Subordinated Note). The Company may, at its option prepay the note, in whole or in part, at any time, without premium or penalty. The note is subject to mandatory prepayment upon (i) the Company’s issuance of capital stock or incurrence of indebtedness, the proceeds of which the Company does not apply to repayment of senior indebtedness or (ii) any capital markets debt issuance to the extent the net proceeds of such issuance exceed $250.0 million. Allied may assign all or any part of its rights and obligations under the Convertible Subordinated Note to any person upon written notice to the Company.

XML

Earnings (Loss) Per Common Share

3 Months Ended

Mar. 31, 2014

Earnings (Loss) Per Common Share

10. Earnings (Loss) Per Common Share

Basic earnings (loss) per common share are computed by dividing net income (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. The weighted average number of common shares outstanding for computing basic and diluted earnings (loss) per common share for the three months ended March 31, 2014 and 2013 were as follows:

	Three Months Ended March 31,
	2014		2013
	(In thousands)
Basic		676,927		379,880
Diluted		676,927		379,880

The number of stock options and restricted stock awards that were excluded from dilutive shares outstanding as these potentially dilutive securities are anti-dilutive because the Company was in a loss position for the three months ended March 31, 2014 and 2013 were as follows:

	Three Months Ended March 31,
	2014		2013
	(In thousands)
Stock options		7,433		353
Nonvested restricted stock awards		7,500		1,561
		14,933		1,914

XML

Effects of the Restatement of Consolidated Statements of Cash Flows (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Cash flows from operating activities
Net loss	$ (14,858)	$ (10,488)
(Increase) decrease in inventories	7,437	1,033
Net cash used in operating activities	(3,772)	(2,713)
Cash flows from financing activities
Adjustments to the net assets of Allied	(9,171)	1,591
Net cash provided by financing activities	126,894	1,591
As Previously Reported
Cash flows from operating activities
Net loss	(4,639)	(8,033)
Adjustments to the net assets of Allied	(9,855)	1,591
(Increase) decrease in inventories	(2,098)	(1,422)
Net cash used in operating activities	(12,943)	(1,122)
Cash flows from financing activities
Net cash provided by financing activities	136,065
Adjustments
Cash flows from operating activities
Net loss	(10,219)	(2,455)
Adjustments to the net assets of Allied	9,855	(1,591)
(Increase) decrease in inventories	9,535	2,455
Net cash used in operating activities	9,171	(1,591)
Cash flows from financing activities
Adjustments to the net assets of Allied	(9,171)	1,591
Net cash provided by financing activities	$ (9,171)	$ 1,591

XML

Subsequent Events

3 Months Ended

Mar. 31, 2014

Subsequent Events

15.  Subsequent Events

In April 2014, the Company signed a Petroleum Agreement relating to the Expanded Shallow Water Tano block in Ghana.  The Company has been named technical operator and will hold a 30% interest in the block.  The block contains three discovered fields, and the work program requires the partners to determine, within nine months, the economic viability of developing the discovered fields.  

XML

Asset Retirement Obligations (Tables)

3 Months Ended

Mar. 31, 2014

Summary of Changes in Asset Retirement Obligations

The following summarizes changes in the Company’s asset retirement obligations during the three months ended March 31, 2014:

	2014
	(In thousands)
Carrying amount at January 1	$	20,601
Accretion expense		440
Carrying amount at March 31	$	21,041

XML

Share-Based Compensation - Additional Information (Details)	3 Months Ended
	Mar. 31, 2014
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock Issued During Period, Shares, Restricted Stock Award, Gross	710,196
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross	2,023,914
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	3,670,735
Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	24 months
Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	36 months

XML

CONSOLIDATED STATEMENTS OF EQUITY (USD $) In Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit
Balance at Dec. 31, 2013	$ 387,946	$ 382	$ 736,456	$ (348,892)
Common stock issued	135,416	688	134,728
Stock-based employee compensation	507		507
Net loss	(14,858)			(14,858)
Allied transaction	(220,000)		(220,000)
Adjustments to net assets of Allied	(9,171)		(9,171)
Balance at Mar. 31, 2014	$ 279,840	$ 1,070	$ 642,520	$ (363,750)

XML

Acquisitions - Restated

3 Months Ended

Mar. 31, 2014

Acquisitions - Restated

4. Acquisitions – Restated

In February 2014, the Company completed the Allied Transaction thereby acquiring the Allied Assets. Pursuant to the terms of the Transfer Agreement, the Company, as partial consideration for the Allied Assets, paid $85.0 million in cash to Allied, issued 497,454,857 shares of the Company’s common stock to Allied and delivered a $50.0 million Convertible Subordinated Note (the “Convertible Subordinated Note”) to Allied under which $25.0 million was deemed advanced, with interest accruing per the terms of the Convertible Subordinated Note.

To fund the cash portion of the Allied Transaction and a portion of the anticipated capital expenditures for development of the Oyo Field, the Company also entered into a Share Purchase Agreement (the “Share Purchase Agreement”) with the Public Investment Corporation (SOC) Limited, a state-owned company registered and duly incorporated in the Republic of South Africa (“PIC”), for an aggregate cash investment of $270.0 million through a private placement of 376,884,422 shares of common stock (the “Private Placement”). The Share Purchase Agreement provides that the Private Placement will be completed in two installments. The first installment of $135.0 million (the “First Closing”) in exchange for 188,442,211 shares of the Company’s common stock was completed at the closing of the Allied Transaction. The second installment (the “Second Closing”) of $135.0 million in exchange for 188,442,211 shares of the Company’s common stock was completed in May 2014.

Following the Second Closing with the PIC, the Company was required to pay to Allied the additional $85.0 million in cash, and the additional $25.0 million Convertible Subordinated Note was deemed advanced with interest accruing per the terms of the Convertible Subordinated Note. As of the First Closing and pursuant to the terms of the Transfer Agreement, the Company was obligated for the full $50.0 million Convertible Subordinated Note and accordingly recorded this on the balance sheet at that time.

The contractual purchase consideration to be paid and the assets acquired and liabilities assumed are as follows (In thousands):

Cash consideration paid upon First Closing	$	85,000
Cash consideration to be paid upon Second Closing		85,000
CAMAC common stock		-
Long-term convertible subordinated note payable - related party		50,000
Total purchase price	$	220,000
Asset acquired and liabilities assumed:
Property, plant and equipment, net		248,736
Accounts payable		(25,429	)
Asset retirement obligations		(20,890	)
Net assets acquired		202,417
Consideration in excess of carrying value acquired	$	17,583

The Allied Transaction is being accounted for as a transfer of entities under common control, whereby the net assets acquired are combined with the Company’s assets at their historical amounts.  Since the cash and debt consideration exceeds the carrying cost of the assets acquired, no value was assigned to the shares issued.

XML

Earnings (Loss) Per Common Share (Tables)

3 Months Ended

Mar. 31, 2014

Weighted Average Number of Common Shares Outstanding for Computing Basic and Diluted Earnings (Loss) Per Common Share

Basic earnings (loss) per common share are computed by dividing net income (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. The weighted average number of common shares outstanding for computing basic and diluted earnings (loss) per common share for the three months ended March 31, 2014 and 2013 were as follows:

	Three Months Ended March 31,
	2014		2013
	(In thousands)
Basic		676,927		379,880
Diluted		676,927		379,880

Antidilutive Securities Excluded from Computation of Earnings Per Share

The number of stock options and restricted stock awards that were excluded from dilutive shares outstanding as these potentially dilutive securities are anti-dilutive because the Company was in a loss position for the three months ended March 31, 2014 and 2013 were as follows:

	Three Months Ended March 31,
	2014		2013
	(In thousands)
Stock options		7,433		353
Nonvested restricted stock awards		7,500		1,561
		14,933		1,914

XML

Suspended Exploratory Well Costs - Restated - Additional Information (Details) (USD $) In Millions, unless otherwise specified	Mar. 31, 2014
Costs Incurred Oil And Gas Property Acquisition Exploration And Development Activities [Line Items]
Capitalized exploratory drilling cost	$ 26.5

XML

Segment Information - Restated

3 Months Ended

Mar. 31, 2014

Segment Information - Restated

14. Segment Information - Restated

The Company’s operations are based in Nigeria, Kenya and The Gambia. Management reviews and evaluates the operations of each geographic segment separately. Segments include exploration for and production of hydrocarbons where commercial reserves have been found and developed. Revenues and expenditures are recognized at the relevant geographical location. The Company evaluates each segment based on operating income (loss).

The Company did not previously report separate segment information because management reviewed and evaluated the operations of the Company as a whole. However, beginning in the first quarter 2014, pursuant to the Allied Transaction and the significant exploration activities undertaken in several of our subsidiaries, management began to evaluate the operations of each geographic segment separately.

Segment activity for the three months ended March 31, 2014 and 2013 are as follows (In thousands):

	Nigeria			Kenya			The Gambia			Corporate and Other			Total
Three months ended March 31,
2014
Revenues	$	19,894			-			-			-		$	19,894
Operating loss	$	(7,906	)		(1,992	)		(268	)		(4,517	)	$	(14,683	)
2013
Revenues	$	22,006			-			-			-		$	22,006
Operating loss	$	(5,543	)		(654	)		(236	)		(4,051	)	$	(10,484	)

Total assets by segment are as follows (In thousands):

	Nigeria		Kenya		The Gambia		Corporate and Other		Total
Total Assets
As of March 31, 2014	$	449,189		1,549		2,045		36,788	$	489,571
As of December 31, 2013	$	449,857		1,484		2,025		858	$	454,224