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WIKI ANALYSIS
CAMAC Energy Inc (CAK) is a development stage company formed to develop new energy ventures, directly and through joint ventures and other partnerships in which it may participate. The company’s operations consist of drilling of oil wells in Inner Mongolia, China, and exploration and development operations.[1]
Business Growth
Due to the inherent nature of the company's industry, Camac's growth is highly erratic. In 2010 revenues increased from $67,000 to $31,612,000 due to output from a successful oil field search and the commencement of extraction.[2] Net income is equally as susceptible to crude oil prices. In addition, Camac's search, venture, and investment in future oil fields are expensed as part of operating expense. This also severely impacts the company's net income.[2]
Key Trends & Forces
Tightened regulation stemming from the BP's Deepwater Horizon Spill
Following BP's oil spill, the US government put a hold on deepwater drilling and instituted new regulations. Although the ban was lifted, the US and other countries have instituted new, tighter rules and stronger regulatory oversight. Increased regulation will increase costs for producers that operate in deepwater drilling.[3]
Volatility of commodity prices affects producer's bottom lines
The price of oil and gas directly affects the revenue of oil drilling and exploration companies. If the price of oil remains high, producers will be incentivized to produce more and tap into once unprofitable reserves. On the other hand, if the price of oil remains low, exploration and production companies will put projects on hold and see a decrease in their revenue streams.
Competition
- Transatlantic Petroleum (TAT) is an international Oil & Gas Drilling & Exploration company that focuses on Turkey, Morocco, Romania, and California.
- Zion Oil & Gas (ZN) is a initial stage oil and gas exploration company with oil and gas exploration in Israel
- HyperDynamics (HDY) is an Oil & Gas Drilling & Exploration company that focuses on the coast of the Republic of Guinea in West Africa.
- VAALCO ENERGY (EGY) a producer of oil and natural gas, focusing primarily in West Africa.
The competition in this industry is fierce. However, the competition is exclusively on the exploration side. There is no competition based on crude oil price since the price is controlled by the Crude Oil Futures market.
References
- ↑ Reuters: Company Profile - CAK
- ↑ 2.0 2.1 Wikinvest SEC Files: CAK 2010 10-K, Item 7
- ↑ NYTimes, "In Gulf, It Was Unclear Who Was in Charge of Rig"
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