CAMAC has entered into a binding Heads of Agreement with Allied Energy Resources Nigeria Limited and certain of its affiliates to acquire all of Allied's remaining interest in a Production Sharing Contract which relates to those certain Oil Mining Leases 120 and 121 granted to Allied by the Federal Republic of Nigeria with respect to oil and gas assets offshore of Nigeria . The Company previously acquired all of Allied's interest with respect to the Oyo Field, located in OML 120 (the “Oyo Contract Rights”) under the PSC in a transaction that closed in April 2010. Upon consummation of the transaction contemplated under the Agreement, the Company will have acquired Allied's full interest in the PSC and recombined the Oyo field within OML 120. The transaction is expected to close on or before November 30, 2010 and is subject to certain closing conditions.

The OML 120 block is located directly east of OML 133 (containing the giant Erha Field) and north of OML 121. It covers an area 916.6 sq. km in water depths ranging from 150m to 1000m. Covered by 3D seismic, this block has proven stacked oil and gas reserves in the shallow (Pliocene) part of the Oyo Field located within the OML 120 block, interests in which field the Company acquired from Allied in April 2010.

The OML 121 block is located directly south of the OML 120 block, and covers an area 887 sq. km in water depths ranging from 150m to 1000m. The OML 120 block has proven more than 90 feet of gas in the shallow (Pliocene) part of the Ebolibo-1 in the Ebolibo Field. The Ebolibo-1 well was drilled in late 2008. The deeper Miocene sequences in this block, where promising prospects have been identified nearby, are untested. Potential recoverable reserves in seismically defined prospects are estimated to be in excess of 100 million barrels. Identified crude oil reserves potentials for both OML 120 and the adjoining OML 121 are estimated at over 500 million bbls, with some exciting prospects having been identified in the deeper Miocene interval.

Tags: CAMAC Energy Inc.