Allied Energy

[hispy99]

Allied Energy plans NSE listing
By Ayo Olesin
Published: Friday, 15 Aug 2008

Allied Energy Plc, an arm of the United States-based CAMAC International Group, said it was in the final stages of plans to list the company’s equity on the floor of the Nigeria Stock Exchange.

The listing, which has already been endorsed by the Listings and Quotations Committee of the NSE and awaiting the approval of the Securities and Exchange Commission, will be the first by an indigenous oil and gas upstream company.

Chairman, CAMAC Group, Mr. Kase Lawal, said a news conference in Lagos on Thursday that the listing would offer an opportunity for Nigerian investors to partake in the risk and rewards available in the dominant sector of the economy.

It plans a subsequent initial public offering.

Lawal said that the company was one of the first indigenous operators to be awarded Nigerian deepwater oil prospecting licenses and had gained extensive experience in offshore operations where it had partnered with global players including Conoco of the US and Italy’s Agip.

Lawal, whose company is also actively engaged in Colombia, Venezuela, Angola, Congo and South Africa, said money raised in Nigeria would be deployed to increasing its production capacity and ultimately, shareholder value

According to him, the company would be in a position to pay dividends to shareholders with a year of listing, which he said was unusual in the oil upstream.

He said the company decided to go for an IPO rather than private placement to enable Nigerian know about its operations and enormous potential to deliver value as an indigenous player operating in an environment usually dominated by multinationals.

“It is pivotal to the way we do business and it underscores Allied Energy’s commitment to empower people with our success story, success which is also a success for Nigeria,” he said.

Founded as an agricultural business trading and tobacco, barley and chemicals, CAMAC moved into energy in the 1990’s and is today a global energy service company with interests in exploration and production of crude oil and natural gas and annual revenues of about $1bn.

It is also involved in the physical trading of crude oil, electric power and refined products as well as transportation services to markets in Africa, America and Europe.

Allied Energy signed a production sharing agreement with Agip in 2005 for the development of Oil Mining Leases 120 and 121, which is expected to produce first oil within the next nine months.

The company also won new oil prospecting licenses in the 2005 Nigeria Bid Round including rights to a 54 per cent OPL 278 in the Niger Delta Basin and six per cent in OPL 282 in shallow water on the Niger Delta continental shelf zone.

[muranay@yahoo.com]

How soon and at what price do they want to list?

Well let them go and test their might on NSE in the prevailing circumstance so that the price will be reduced before they come for IPO.

[solainvest]

The Sun News Online | Money

Mr. Kase Lawal, Chairman, Allied Energy Plc, is one Nigerian entrepreneur that is highly revered in the United States of America (USA) because of his exploits in that country’s oil and gas industry. Lawal, portrays the grace to grace story; that there is a huge reward for hard work, focus, commitment and dedication to duty.

In the early 70’s, the young Lawal, had left the shores of Nigeria for the U.S in pursuit of university education.
Lawal, started his working career as a chemist for Halliburton and later chemical engineer with Shell Oil Refining Company. But his romance with paid jobs did not last long as he soon opted out to be his own employer with the establishment of Camac Holdings in Houston, USA in 1986. At first, the company was into agricultural commodities business trading on barley, tobacco and other grains from the U.S to countries in West Africa.

But in 1989 when the Federal Government’s local content drive in the oil and gas industry started gaining momentum, Lawal shifted focus and made an inroad into the oil and gas industry, with the establishment of Allied Energy Plc.

Lawal, recently hosted journalists in Lagos where he spoke on the feats accomplished by the company in the Nigerian oil and gas industry. He also disclosed plans to get the company listed on the floor of the Nigerian Stock Exchange as the first indigenous crude oil exploration and exploitation company.
Excerpts:

Background
I am from Ibadan in Oyo state and born to a father who was a politician and a mother who was a textile store merchant. In the early 70’s, I left home for the U.S and it was the first time someone in my family would go overseas. I moved to Georgia in 1971 and attended Fort Valley State College, a historical black institution known for its biology and chemistry departments. I later moved to the Texas Southern University where I graduated with a Bachelor of Science degree in Chemical Engineering and later at the Prairie View University in Texas, where I bagged a Masters in Business Administration, specializing in Finance and Marketing.

Upon graduation, I worked for Shell Oil as a chemical engineer and as a research chemists at Halliburton. Over the next decade, besides founding Camcac and Allied Energy, I would also hold several positions within the oil and finance industries, including executive positions at Suncrest Investment Corporation and Baker Investments.

The turning point for the company came when in 1989, Dr. Rilwanu Lukman, then Foreign minister of Nigeria who later became secretary general of OPEC visited Houston. At a Rotary club meeting, Lukman told me the Nigerian government wanted to spur development of a local energy industry.
It was an opportunity that I grabbed and launched into the Nigerian oil and gas industry.

The Nigerian government asked me to try to organize Nigerians in the U.S who were working for oil companies and would be interested in being technical partners with indigenous companies. In that process, I realized that I could use my knowledge in America and that of Africa to gain much bigger foothold in the industry. In 1991, I signed several deals with major oil companies that would pave the way for the success that I enjoy today.

The best way for me to get into the industry was to know what the big boys wanted, the major oil companies. I started asking questions. Did they have an interest in West Africa? If they did, I would go to west Africa and look for what they wanted and made it available for them. I understood the political landscape and business environment in those countries in Africa. When you merge those two together, there was a good synergy that was very attractive to the major oil companies.
The oil and gas industry
The quest for oil and gas is one that requires men with the heart to take risks. Sometimes people think I am crazy because I can sink in $40million looking for oil or gas. But if you get it, if you are able to get the reserves and strike the oil, it pays for all the other times you were unsuccessful. It is an interesting business to be in.
The oil and gas business does not know colour. It is about your success in drilling and being able to find reserves.

The industry is a cyclical one. The cost of finding oil rises and falls in tandem with that cycle. While the price of crude oil has risen about 300 per cent over the last couple of months, the cost of exploiting crude oil has also escalated more than 100 per cent. For instance, there was a case where we signed a lease for a semisubmersible rig that can drill as deep as 12,000 feet to the seabed.

The cost was $320,000 per day. That rig came off of contract at $127,000 per day. Suppliers are in that cycle now where they can make all the money they can because they know if oil goes down to say $15, they are going to market those same rigs for $70,000. Oil drilling is a risky business; it cost a lot to drill an exploratory well. To defray those costs, we partner with some other firms. We can go into partnership where we own the actual field and we’ll share in the profit, but they put up the up-front capital to actually go in and drill the exploration well.

About Allied Energy
Allied Energy undertakes upstream oil and gas exploration and production activities in Nigeria. We were one of the first independent energy enterprises to realize the potential of west Africa’s offshore resource.
We were not only the first independent oil and gas producer to hold interest in a Nigerian deepwater licence in 1992, but also the first to make a deepwater discovery in offshore in 1995.
Currently, Allied Energy is engaged in production activities centred on oil block in which the first deepwater offshore discovery in west African was made.

Let me get deeper by listing some of our operating landmarks. Allied Energy and BP Stateoil became the first oil consortium to discover a deepwater well in West Africa and the first to discover oil in deepwater west Africa. In 2005, the company signed a joint production sharing agreement with Nigerian Agip Exploration. The agreement awarded Agip a 40 per cent participation in Oil Mining Leases (OML) 120 and 121. Allied Energy and Agip will collaborate on the technical assistance and operations management of the blocks.

Recently, Allied Energy bid and won two new prospecting licences in the 2005 bid round. The winning bids include the rights to a 54 per cent interest in Oil Prospecting Licence 278, which is located onshore in the Niger Delta basin on the Niger Delta continental shelf zone.

Going to the Nigerian Stock Exchange
We will be going public soon as we plan to get enlisted on the floor of the Nigeria Stock Exchange (NSE) before the end of 2008.
That will make Allied Energy the first upstream company to seek a listing on the Nigerian stock exchange. We will use the proceeds of the offer to increase production and to improve shareholders yield. We intend to pay dividends after 12 months of operation and that is if listed and granted permission by SEC.

We intend to bring in more foreign direct investments into Nigeria to increase our capacity. We also want Nigeria to share in the successes that we have achieved outside. And this will create a lot of employment opportunities to Nigerians.

We want to utilize our local and international resources to efficiently explore our oil assets and this will not only benefit our shareholders but also our country as well.
This will be pivotal to the way we do business and it underscores Allied Energy’s commitment to empower our people with our success story, a success for Nigeria.
Our commitment over the years remains unchanged– to continue providing the very best in oil prospecting and development services in Nigeria.

I give credit of my business success to one of my mentors, Reginald Lewis who was the founder of TLC Beatrice Lewis. He took me under his wings and taught me the ins and outs of American business. In 1991, one year before he died, he gave me a lesson in business that I will always remember. He was full of encouragement and inspiration. He told me not to get deterred or inhibited by lack of financial resources. Just have the courage to go out there to meet with people, to tell people what you want to do, what you are trying to do and what you can do.

For us it was knowing the intricacies and what major companies look for. We thought if we had something that they wanted, then finding money would not be a problem anymore.
And using that knowledge and the connections that I had while advising the major companies, I got the financial backing that had eluded me, and successfully put in my own bid at a deep water auction and I won and instantly became a player in the oil and gas industry.

[panej]

How has the security problem in the Niger Delta affected Allied Energy's operations and revenue by way of lost productivity and cost of providing security for workforce? Just curious...

[hispy99]

Allied Energy buys into offshore fields, plans public offer
By Yakubu Lawal

WITH the acquisition of 15 per cent stake each in Oil Mining leases (OMLs) 125 and 134 deep offshore fields, formerly Shell Development Company of Nigeria holdings, Allied Energy Plc, an indigenous upstream player, is set to expand its growth path in the petroleum industry.

Other partners in the fields are Nigerian Agip Exploration (NAE) 70 per cent equity and another local firm, Oando Plc hold the balance of 15 per cent.

Allied Energy Plc, an arm of the United States based CAMAC International Group has also concluded plan to go public by being quoted on the floor of the Nigerian Stock Exchange (NSE).

Chairman and Chief Executive Officer of the company Dr. Kase Lukman Lawal said that the company had huge assets investment across the globe and that going into the stock market would give Nigerian the opportunity to buy into an upstream producing company.

Already the process of listing has commenced with the relevant authority endorsement by the listing and quotations committee of the NSE and currently awaiting the approval of the Securities and Exchange Commission.

The company, it was gathered planned an initial public offer rather than private placement to create awareness about its operations and enormous potential to deliver value as an indigenous player in the Nigerian oil and gas industry, a terrain that is usually dominated by foreign multi-nationals.

The listing would offer opportunity to all Nigerians to partake in the risk and rewards available in the dominant sector of the economy, a source close to the company said recently.

Already Abo field in OML 125 is currently producing about 18,000 barrels per day while effort are being doubled to bring on stream another offshore field OYO before the end of first quarter of 2009 with estimated production flow of 25,000 barrels per day while OML-134 although still in exploration phase, has already recorded significant discoveries ready for development.

The company's principal assets consist of interest in six oil blocks onshore and offshore the west coast of Nigeria, namely, OMLs 125,120,134,121 and Oil Prospecting Licenses (OPLs) 282 and 278.

CAMAC and its Nigerian affiliate, Allied Energy Plc in 2005 won OPLs 282 and 278 in a competitive biding exercise conducted by the former Minister of Petroleum Dr. Edmund Daukoru.

The wining bids include the right to a 54 per cent stake in OPL 278, which is located in the Niger Delta basin and a six per cent interest in OPL 282, located on the Niger Delta continental shelf geological zone.

SNEPCO had divested from OMLs 125 and 134 with Allied Energy and Oando Plc buying 15 per cent participating interest each while Agip, the operator of the field hold 70 per cent.

At the disclosure of Shell interest to divest from the field, Oando Plc indicated interest to buy the entire 49 per cent Shell's holding for $625.7 million.

Cross negotiation and the need to share risk as often the practice in the upstream business eventually saw Agip, Allied Energy and Oando partnering in the block.

NAE who originally has 51 per cent of the blocks also has the right of first refusal to be exercised within 30 days that Shell made it intention to divest known, Oil industry source said

Allied Energy, was given the opportunities to march the price offered by Oando for the two fields by Agip and Allied desirous to increase its growth potential through increased portfolio promptly accepted the offer made by Agip and paid for the 15 per cent it eventually got.

The scramble for Shell's stake also saw the Chinese oil firm, CNOOC and African Petroleum plc (AP) positioning themselves for the fields.

[jacobtt]

Originally Posted by panej

How has the security problem in the Niger Delta affected Allied Energy's operations and revenue by way of lost productivity and cost of providing security for workforce? Just curious...

Allied Energy in Nigeria is tied to Nigerian Agip Exploration. Kase Lawal's Man Friday is one Femi Akinmade who was the former General Manager of Nigerian Agip exploration (NAE) as it is popularly called. NAE is the offshore arm of Eni in Nigeria, they are running a PSC with several other multinationals while NAOC is the mother company. Several other multinationals are partners but the big question is why is SNEPCO (shell) pulling out, though its a tough call for Shell and the italians to do bussiness or maybe shell is being frustrated out for Kase and Femi to get hands into upstream operations by using
Allied Energy. By and large it will be good to invest into Allied Energy if they will ensure good ethics and open accounting, Kase's son is the chief accounting officer in CAMAC.......its a long story . But know that the oil industry is run by cartels and mafias.

[citizen]

Hello guys. This is the public offer you guys cannot miss. Sell all the junk shares you all have now in all those overvalued( JP Morgan Report ) Banks and by this upstream oil company insured by kase lawal (the 2nd richest black man in america).

[hispy99]

Consolidation of banks, big boost to oil exploration – Kase Lawal
By Clara Nwachukwu
Published: Saturday, 27 Sep 2008

Exploration for oil and gas has, before now been largely regarded as something reserved for foreign companies. The Chairman of Allied Energy Plc, Dr. Kase Lawal, tells Clara Nwachukwu, how the indigenous company has been able to hold its own in the challenging business.

Would you say the oil and gas environment has been conducive for indigenous operators like your company?

Allied Energy happens to have been part of the pioneer indigenous companies that was given the opportunity in the late 80s and early 90s to participate in the oil and gas industry. We took a specific view at that particular time that the industry itself was capital intensive. Hence, we chose the path of partnership.

By and large, we are pretty much fulfilled in the first stage of the campaign. We have invested, we have learnt and we are poised to grow and to add value to the oil and gas sector, especially from an indigenous company’s point of view. So, we believe we have been successful, because we have pretty much exceeded our goals in terms of what we set out to do.

And what were these goals?

The goals were to be able to build an independent oil and gas company that was borne out of the yearnings of the people, to get Nigerians involved in the industry. And the government at that time answered the call by getting Nigerians involved in that sector.

That participation has actually grown into the oilfield services companies, which are even bigger than the operating companies in Nigeria. Therefore, we have been lucky enough to participate in that process. But we also knew that there was going to be a challenge. The challenge is that the financial institutions do not offer loans for explorations; they all want to participate in development and production. All we have done is to invest and now we are introducing our company to the Nigerian public and to let them know that we are part of them. We would like to see how we can together continue to grow this company called Allied Energy.

Has the consolidation of the banks changed anything in terms of access to loans?

Absolutely. I believe that one of the best things to have happened to this economy is the consolidation of the banks, because it eliminated the weak banks and gave the big banks a strong balance sheet to be able to leverage on them and get involved in the most critical part of the economy, which is exploration and production, especially in the energy sector. Banks are now getting involved in these areas. They even have technical departments and hire engineers to evaluate, review, analyse and make intelligent decisions in the area of energy financing.

But interest rate still remains an issue. How does this affect the sector?

The regime of high interest rate is no longer going to be peculiar to the emerging markets, as this is a function of the market place. For us, we look at how we can borrow money at the lowest rate. And in the global market, if you borrow in foreign currency, you can get a much lower interest rate than the naira. We are not economists to be able to tell what the rates should be, but the rate at which we are borrowing is one that is sustainable and justifiable for our business.

How has Allied Energy fared with its foreign partners in view of indigenous operators’ fear of foreign domination of the upstream sector?

I must tell you that from the beginning, we decided to go with the multinationals. If that would take us five years to accomplish, we were very determined to do it. But luckily, it took us less than two years to win the confidence of a major oil conglomerate, Conoco, in 1991. Since then, we have also partnered with BP, Statoil of Norway and lately Eni.

These partnerships have added value and distinct opportunities to our organisation from well respected and experienced organisations who actually were mitigating the risks of looking for exploration dollars at the outset. It would have been a daunting task if we had chosen the path of looking for money. So it has really worked out. And I believe it has worked out for our partners also. They were able to get the reserves they were looking for and we have been able to produce. A classic example is the one we started since 1995 and we are still producing from the field.

So how have your assets fared so far?

The function of production is to develop, produce and decline. I would say at this stage, some of our productions that were active are now in the declining mode. But we are also engaged very actively in the development mode. We are quietly spending, together with Eni, over $1bn to develop a field in the deepwater – the Oyo Field. And by the time that comes on stream, we will be developing two other fields that will add to our production. The Oyo was the first deepwater field that was discovered in West Africa.

How far are you planning to go in terms of assets acquisition?

If you look at the uses of our proceeds, once we get the approvals for spending, we will seek to expand through acquisition of reserves. We are actually at advanced stages of the opportunities that will add reserves to our production in a very short while. We hope that within the next 12 months, you will see multiples of the reserves that we have produced. Internally, our target is to continue to add value and acquire assets at the most efficient price applicable in the West African region.

You are proposing to go public, what do you hope to achieve?

That is our plan, subject to approval by the Securities and Exchange Commission. We are going through that process. We don’t know when and if they will approve it. But if they do, the board and shareholders have approved for us to look at various options.

Why now, when there is a global financial crisis?

Experts will tell you that you should buy shares when they are low. We believe this is actually going to be an opportuned time to go to the market place, create substantial value for the Nigerian public in a product that has never been listed on the Nigerian Stock Exchange before, so that they will be able to make good returns on their investments. I believe we could easily be listed on the London Stock Exchange, the New York or Toronto Stock Exchange. We have been on those markets before, we have controlled companies on the London Stock Exchange in exploration and production in the early 90s. But we chose this period to be in Nigeria, to be a pioneer, hopefully, if we are listed on the NSE. I believe the time is better because the bearish time is an opportunity for the investing public.

You know Nigerians are very sceptical about new things, what are you doing to boost investors’ confidence?

We have been very lucky as an organisation, because no matter what we try to do, it has been done before. And the environment is such that the timing couldn’t have been better for us. For 17 years, we have been investing in this economy and we have been bringing major partners, spending hundreds of millions of dollars in this economy without educating the public about who we are.

We believe very strongly that we have gone through the gestation period and we have gone through the tough part of exploration and production. We have invested in exploration development and we are going to reap the benefits from production so that the investing public can also enjoy and get returns on their investments.

You speak as if it had all been a smooth ride for Allied Energy, what were your challenges growing up?

The challenges are numerous. This interview will not give us enough room to chronicle all. But it suffices to say there were times we actually thought about quitting. And those were the periods when we were trying to convince the international oil companies to be our technical partners, in the early 90s. We went through almost 21 IOCs and every single time, you can imagine, all they say is, ‘no’. And they don’t even want to see you. You can imagine how daunting and how frustrating those periods could have been.

But we were resilient. We were determined and we were focused. We did not let the rejection get in the way of the goals we set for ourselves. We believed that by teaming up with the majors, we will be able to build an enduring indigenous company that would be proud of the technical expertise, capacity building and the financial resources that would take us to the next level. We knew it was a task that must be done, and we were very lucky that we had a team that continued to believe in the vision of building a company that would be better for all Nigerians tomorrow.

[bivins1]

Originally Posted by jacobtt

Allied Energy in Nigeria is tied to Nigerian Agip Exploration. Kase Lawal's Man Friday is one Femi Akinmade who was the former General Manager of Nigerian Agip exploration (NAE) as it is popularly called. NAE is the offshore arm of Eni in Nigeria, they are running a PSC with several other multinationals while NAOC is the mother company. Several other multinationals are partners but the big question is why is SNEPCO (shell) pulling out, though its a tough call for Shell and the italians to do bussiness or maybe shell is being frustrated out for Kase and Femi to get hands into upstream operations by using
Allied Energy. By and large it will be good to invest into Allied Energy if they will ensure good ethics and open accounting, Kase's son is the chief accounting officer in CAMAC.......its a long story . But know that the oil industry is run by cartels and mafias.

Good insight jacob but whats your take on this. i see oando is going to be their main competitor in this offshore drilling. I worked with AGIP before and I know Akinmade. do you think this guys are up to it?

[knightofdelta]

I am usually skeptical when I see all these media attention to a particular company. They may have something in store but I will like to see their prospectus, go through their financials, have a feel about their business philosophy and if possible have a little chat with their management before giving a full veto to a media hyped company. Allied Energy may be a good company but let us see their financials first.

[bivins1]

Originally Posted by knightofdelta

I am usually skeptical when I see all these media attention to a particular company. They may have something in store but I will like to see their prospectus, go through their financials, have a feel about their business philosophy and if possible have a little chat with their management before giving a full veto to a media hyped company. Allied Energy may be a good company but let us see their financials first.

KOD
Here comes the prospectus. Please do some digging for us . I know you work in that sector and there might be certain things you know that we dont. thanks for your anticipated cooperation

[knightofdelta]

Originally Posted by bivins1

KOD
Here comes the prospectus. Please do some digging for us . I know you work in that sector and there might be certain things you know that we dont. thanks for your anticipated cooperation

Thanks. I will go through the prospectus as I am at work overnight. Should be through with it before daybreak.

[jacobtt]

Originally Posted by bivins1

Good insight jacob but whats your take on this. i see oando is going to be their main competitor in this offshore drilling. I worked with AGIP before and I know Akinmade. do you think this guys are up to it?

I have gone through the assets (reserves) of the company and they are pretty fair though not the type that multinationals will run into. It gives me much insight why Shell pulled out. Ranking these reserves and their global resources will not give a nice VIR (Value to Investment Ratio) for such super giants like Shell. Me think that as time goes on Eni will make a pull out as the BS&W in these fields increase. By then they must have recouped their investments and make enough profit and people like Anadarko might come in for clean ups.

Technically Allied energy is not the operator, they are tied to ENI-NAE/NAOC and will bring in money(cash calls) for investments and receive their equity production in cash. They are junior shareholders and NAE/NAOC might not revert to them to make certain decisions, they are more or less dormant shareholders so your money is safe. The Big Eni is making the calls for them.

There are other indigenous oil companies that are making waves which you might not know. Check out Afren (Rilwanu Lukman, Egbert Imomoh and co) so Oando is not anywhere in the upstream operations.

I have done some works on some of these assets and i can stick out my neck and tell you to invest- For your information am a Geoscientist working in an international exploration for one of the multinational consultancy firms in the Far East-Go ahead and INVEST