CAMAC Energy Inc. (Form: 10-Q, Received: 05/04/2011 06:05:34)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended March 31, 2011

o 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		(I.R.S. Employer
of incorporation or organization)		Identification No.)

1330 Post Oak Blvd., Suite 2525, Houston, Texas		77056
(Address of principal executive offices)		(Zip Code)

(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 þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, 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 ¨ 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	o	Accelerated filer	þ

Non-accelerated filer	o	Smaller reporting company	o
(Do not check if a 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 þ

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

At April 29, 2011 there were 154,059,878 shares of common stock, par value $0.001 per share, outstanding.

		Page
CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION		3

CERTAIN DEFINED TERMS		4

PART I — FINANCIAL INFORMATION

ITEM 1	Financial Statements

	Consolidated Balance Sheets as of March 31, 2011 (Unaudited) and December 31, 2010	5

	Consolidated Statements of Operations for the three months ended March 31, 2011 and 2010 (Unaudited)	6

	Consolidated Statements of Cash Flows for the three months ended March 31, 2011 and 2010 (Unaudited)	7

	Notes to Unaudited Consolidated Financial Statements	8

ITEM 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17

ITEM 3	Quantitative and Qualitative Disclosures About Market Risk	21

ITEM 4	Controls and Procedures	21

PART II — OTHER INFORMATION

ITEM 1.	Legal Proceedings	22

ITEM 1A.	Risk Factors	22

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	22

ITEM 3.	Defaults Upon Senior Securities	23

ITEM 4.	(Removed and Reserved)	23

ITEM 5.	Other Information	23

ITEM 6.	Exhibits	23

Signatures		24

CAUTIONARY STATEMENT RELEVANT TO FORWARD-LOOKING INFORMATION

All statements, other than statements of historical fact, included in this Form 10-Q, 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 CAMAC Energy Inc. (formerly Pacific Asia Petroleum, Inc. ) and its subsidiaries and joint-ventures, (i) Pacific Asia Petroleum, Limited, (ii) Inner Mongolia Production Company (HK) Limited, (iii) Pacific Asia Petroleum (HK) Limited, (iv) Inner Mongolia Sunrise Petroleum Co. Ltd., (v) Pacific Asia Petroleum Energy Limited, (vi) Beijing Dong Fang Ya Zhou Petroleum Technology Service Company Limited, and (vii) CAMAC Petroleum Limited (collectively, the “Company”), to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements contained in this Form 10-Q.

In our capacity as Company management, 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 Securities and Exchange Commission (the “SEC”), reports to stockholders and information provided in our web site.

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 operations 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.

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.

CERTAIN DEFINED TERMS

Throughout this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” ” Company,” and “our Company” refer to CAMAC Energy Inc. (“CAMAC”), formerly Pacific Asia Petroleum, Inc. (“PAP”), a Delaware corporation, and its present and former subsidiaries, including Pacific Asia Petroleum, Limited (“PAPL”), Pacific Asia Petroleum Energy Limited (“PAPE”), Inner Mongolia Production Company (HK) Limited (“IMPCO HK”), Pacific Asia Petroleum (HK) Limited (“PAP HK”), Inner Mongolia Sunrise Petroleum Co. Ltd. (“IMPCO Sunrise”), Beijing Dong Fang Ya Zhou Petroleum Technology Service Company Limited (“Dong Fang”), and CAMAC Petroleum Limited (“CPL”) and collectively, the “Company”. References to "CAMAC" as a corporate entity refer to CAMAC Energy Inc. (formerly Pacific Asia Petroleum, Inc.) prior to the mergers of Inner Mongolia Production Company LLC ("IMPCO") and Advanced Drilling Services, LLC ("ADS") into wholly-owned subsidiaries of CAMAC Energy Inc .

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CAMAC ENERGY INC.

CONSOLIDATED BALANCE SHEETS

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

	March 31,			December 31,
	2011			2010
	(unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	20,552		$	28,918
Short-term investments		-			256
Accounts receivable		10,381			10,411
Inventories		75			72
Other current assets		2,466			2,847
Total current assets		33,474			42,504
Property, plant and equipment, net
Oil and gas properties (successful efforts method of accounting)		209,951			204,523
Property, plant and equipment, other		442			456
Total property, plant and equipment, net		210,393			204,979
Long-term advances		34			34
Investment in nonsubsidiary - at fair value		276			272
Deferred charges		40			54
Total Assets	$	244,217		$	247,843
LIABILITIES AND EQUITY
Liabilities
Accounts payable	$	664		$	63
Income taxes payable		45			163
Accrued contracting and development fees		56,061			32,329
Accrued personnel expenses		363			606
Accrued liability for contingent acquisition cost		890			890
Accrued royalties		5,933			5,933
Accrued and other liabilities		314			870
Total current liabilities		64,270			40,854
Commitments and Contingencies
Equity
Stockholders' equity - CAMAC Energy Inc.
Preferred stock, Authorized - 50,000,000 shares at $0.001 par value
Issued - 23,708,952 shares as of March 31, 2011 and December 31, 2010
Outstanding - None as of March 31, 2011 and December 31, 2010		-			-
Common stock, Authorized - 300,000,000 shares at $0.001 par value
Issued and outstanding - 153,806,863 shares as of March 31, 2011 and
153,611,792 shares as of December 31, 2010		154			154
Paid-in capital		459,712			458,523
Accumulated deficit		(279,123	)		(250,925	)
Other comprehensive income (deficit)		(105	)		(120	)
Total stockholders' equity - CAMAC Energy Inc.		180,638			207,632
Noncontrolling interests deficit		(691	)		(643	)
Total equity		179,947			206,989
Total Liabilities and Equity	$	244,217		$	247,843

The accompanying notes are an integral part of these consolidated financial statements.

CAMAC ENERGY INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except for per share amounts)

(Unaudited)

	For Three Months Ended March 31,
	2011			2010
Revenues
Crude oil	$	-		$	-
Products and services		-			77
Total revenues		-			77
Costs and operating expenses
Lease operating expenses and production costs		25,073			631
Exploratory expenses		82			22
Selling, general and administrative expenses		2,990			2,693
Depreciation, depletion and amortization		66			49
Total costs and operating expenses		28,211			3,395
Operating loss		(28,211	)		(3,318	)
Other income (expense)
Interest income		8			4
Total other income		8			4
Net loss before income taxes and
noncontrolling interests		(28,203	)		(3,314	)
Income tax expense		(45	)		(8	)
Net loss		(28,248	)		(3,322	)
Less: Net loss attributable to noncontrolling interests		50			148
Net Loss attributable to CAMAC Energy Inc. stockholders	$	(28,198	)	$	(3,174	)
Net loss per common share attributable to CAMAC Energy Inc.
common stockholders - basic and diluted	$	(0.18	)	$	(0.07	)
Weighted average number of common
shares outstanding, basic and diluted		153,735			46,844

The accompanying notes are an integral part of these consolidated financial statements

CAMAC ENERGY INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	For Three Months Ended March 31,
	2011			2010
Cash flows from operating activities
Net loss	$	(28,248	)	$	(3,322	)
Adjustments to reconcile net loss to cash
used in operating activities:
Currency transaction gain		(4	)		(3	)
Stock and options compensation expense		1,159			1,499
Depreciation, depletion and amortization expense		66			49
Changes in operating assets and liabilities:
Decrease in accounts and other receivables		30			17
(Increase) decrease in inventories		(3	)		22
Decrease in other current assets		381			13
Increase in accounts payable		601			172
Increase (decrease) in accrued contracting and development fees		23,732			(366	)
Decrease in accrued personnel and other liabilities		(917	)		(408	)
Net cash used in operating activities		(3,203	)		(2,327	)
Cash flows from investing activities
Net sales of available for sale securities		256			1,508
(Increase) decrease in long-term advances and deferred charges		14			(82	)
Additions to property, plant and equipment		(5,480	)		(107	)
Net cash (used in) provided by investing activities		(5,210	)		1,319
Cash flows from financing activities
Proceeds from exercise of stock options and warrants		30			153
Issuance of common stock net of issuance costs		-			35,200
Net cash provided by financing activities		30			35,353
Effect of exchange rate changes on cash		17			(4	)
Net (decrease) increase in cash and cash equivalents		(8,366	)		34,341
Cash and cash equivalents at beginning of period		28,918			3,602
Cash and cash equivalents at end of period	$	20,552		$	37,943
Supplemental disclosures of cash flow information
Interest paid	$	-		$	-
Income taxes paid	$	-		$	2
Supplemental schedule of non-cash investing and financing activities
Common and preferred stock issued for services and fees	$	-		$	547
Issuance costs paid as warrants issued	$	-		$	457

The accompanying notes are an integral part of these consolidated financial statements

CAMAC Energy Inc.

Notes to Unaudited Consolidated Financial Statements

NOTE 1. COMPANY DESCRIPTION, SIGNIFICANT ACCOUNTING POLICIES AND LIQUIDITY

CAMAC Energy Inc. (the “Company”) is the successor company from a reverse merger involving the former Pacific East Advisors, Inc. and other entities on May 7, 2007. The Company’s activities commenced in 2005 through Inner Mongolia Production Company, LLC (“IMPCO”), a limited liability company formed under New York State law on August 25, 2005. In April 2010, due to a change in control of the Company resulting from an asset acquisition in Nigeria, the Company’s name was changed from Pacific Asia Petroleum, Inc. to CAMAC Energy Inc.

The Company operates in the upstream segment of the oil and gas industry in exploration and producing activities. The Company’s operational assets are located in Nigeria and China.

Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of CAMAC and its wholly owned subsidiaries. All significant intercompany transactions have been eliminated in consolidation. The consolidated financial statements for the previous periods include certain reclassifications that were made to conform to current presentation. Such reclassifications have no impact on previously reported net loss, equity or cash flows.

The accompanying unaudited consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been omitted. We believe that the presentations and disclosures herein are adequate to make the information not misleading. The unaudited consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the interim periods. These unaudited consolidated financial statements 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, 2010. The results of operations for the interim period are not necessarily indicative of the results of operations to be expected for any subsequent quarter or for the year ending December 31, 2011.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates based on assumptions. Estimates affect the reported amounts of assets and liabilities, disclosure of contingent liabilities, and the reported amounts of revenues and expenses during the reporting periods. Accordingly, our accounting estimates require the exercise of judgment. While management believes that the estimates and assumptions used in preparation of unaudited consolidated financial statements are appropriate, actual results could differ from those estimates. Estimates that may have a significant effect include oil and natural gas reserve quantities, depreciation depletion, and amortization relating to oil and natural gas properties, and income taxes. The accounting estimates used in the preparation of the unaudited consolidated financial statements may change as new events occur, more experience is acquired, additional information is obtained and our operating environment changes.

For the period from inception of the Company through March 31, 2010, the Company’s consolidated financial statements were prepared as a development stage company. In the three months ended June 30, 2010 the Company commenced the recognition of significant revenues from operating assets located in Nigeria and at that time ceased reporting as a development stage company. Prior period data has been revised to the current period reporting basis as an operating company, and accordingly, comparison with previous period reported amounts may not be meaningful.

Net loss attributable to CAMAC Energy Inc. stockholders was $28.2 million during the three months ended March 31, 2011 and at that date the accumulated deficit was $279.1 million. The Company completed the workover on well #5 in the Oyo Field in mid-January 2011 and incurred a total cost of approximately $55.1 million to reduce gas production and to improve the daily crude oil production rate from this well. Of this amount, $30.7 million was charged to expense as of December 31, 2010 for costs incurred as of that date and the remaining $24.4 million was charged to expense during the quarter ended March 31, 2011. The Company plans to pay for the workover using available cash, a debt facility to be entered into with Allied Energy Plc. (“Allied”) and through Oyo Field lifting proceeds.

The Company expects to utilize a term credit facility of $25 million from Allied, an affiliated company, which has agreed to provide this facility, in order to meet a substantial portion of the Company’s cash obligations with respect to the workover on well #5 in the Oyo Field. The Company expects to finalize the term credit facility in early May 2011. The costs of this work will be recovered as Cost Oil in revenues under the OML 120/121 PSC starting in second half of 2011, which the Company expects will enable it to repay the loans within the due date under the term facility. The portion of the workover funded from the Company’s own cash will also be recovered as Cost Oil in revenues and thus is expected to be available for future operations after such recovery occurs.

The Company’s unaudited consolidated financial statements have been prepared assuming it will continue as a going concern. Based upon current cash flow projections, management believes that the Company will have sufficient liquidity and capital resources to meet projected cash flow requirements through March 31, 2012.

Recently Issued Accounting Standards Not Yet Adopted

As of the balance sheet date, there were no new accounting pronouncements not yet adopted that are expected to materially affect the Company.

NOTE 2. OML 120/121 TRANSACTION

On December 10, 2010, the Company entered into a Purchase and Continuation Agreement (the “Purchase Agreement”) with CAMAC Energy Holdings Limited, Allied, an affiliate of CEHL, CAMAC International (Nigeria) Limited (“CINL”), an affiliate of CEHL, (collectively “CEHL”), superseding earlier related agreements. Pursuant to the Purchase Agreement, the Company agreed to acquire CEHL’s full remaining interest (the “OML 120/121 Transaction”) in the OML 120/121 PSC (the “Non-Oyo Contract Rights”). In April 2010 the Company had acquired from CEHL the Oyo Contract Rights in the OML 120/121 PSC. The OML 120/121 Transaction closed on February 15, 2011. Upon consummation of the acquisition of the Non-Oyo Contract Rights under the Purchase Agreement, the Company acquired CEHL’s full interest in the OML 120/121 PSC.

In exchange for the Non-Oyo Contract Rights, the Company agreed to an option-based consideration structure and paid $5.0 million in cash to Allied upon the closing of the OML 120/121 Transaction on February 15, 2011. The Company has the option to elect to retain the Non-Oyo Contract Rights upon payment of additional consideration to Allied as follows:

a.	First Milestone : Upon commencement of drilling of the first well outside of the Oyo Field under the PSC, the Company may elect to retain the Non-Oyo Contract Rights upon payment to CEHL of $5 million (either in cash, or at Allied’s option, in shares);

Second Milestone : Upon discovery of hydrocarbons outside of the Oyo Field under the PSC in sufficient quantities to warrant the commercial development thereof, the Company may elect to retain the Non-Oyo Contract Rights upon payment to CEHL of $5 million (either in cash, or at Allied’s option, in shares);

Third Milestone : Upon the approval by the Management Committee (as defined in the PSC) of a Field Development Plan with respect to the development of non-Oyo Field areas under the PSC, as approved by the Company, the Company may elect to retain the Non-Oyo Contract Rights upon payment to Allied of $20 million (either in cash, or at Allied’s option, in shares); and

Fourth Milestone : Upon commencement of commercial hydrocarbon production outside of the Oyo Field under the PSC, the Company may elect to retain the Non-Oyo Contract Rights (with no additional milestones or consideration required thereafter following payment in full of the following consideration) upon payment to Allied, at Allied’s option of (i) $25 million in shares, or (ii) $25 million in cash through payment of up to 50% of the Company’s net cash flows received from non-Oyo Field production under the PSC.

If any of the above milestones are reached and the Company elects not to retain the Non-Oyo Contract Rights at that time, then all the Non-Oyo Contract Rights will automatically revert back to CEHL without any compensation due to the Company and with CEHL retaining all consideration paid by the Company to date.

The Purchase Agreement contained the following conditions to the closing of the Transaction: (i) CPL, CAMAC International (Nigeria) Limited (“CINL”), Allied, and Nigerian Agip Exploration Limited (“NAE”) must enter into a Novation Agreement in a form satisfactory to the Company and CEHL and that contains a waiver by NAE of the enforcement of Section 8.1(e) of the OML 120/121 PSC (providing for the continued waiver by NAE of its entitlement to “profit oil” in favor of Allied), and that notwithstanding anything to the contrary contained in the OML 120/121 PSC, the profit sharing allocation set forth in the OML 120/121 PSC shall be maintained after the consummation of the OML 120/121 Transaction; (ii) the Company, and CEHL must enter into a registration rights agreement with respect to any shares issued by the Company to Allied at its election as consideration upon the occurrence of any of the above-described milestone events, in a form satisfactory to the Company and CEHL; and (iii) the Oyo Field Agreement, dated April 7, 2010, by and among the Company, CEHL and Allied, must be amended in order to remove certain indemnities with respect to Non-Oyo Operating Costs (as defined therein). In addition, CEHL must deliver the certain data and certain equipment to the Company in as-is condition. The Company agreed to limited waivers of certain of these closing conditions under the Limited Waiver Agreement.

The $5 million paid for acquiring the Non-Oyo Contract Rights is recorded as unproved oil and gas properties in the accompanying unaudited consolidated financial statements.

NOTE 3. PROPERTY PLANT AND EQUIPMENT

Property, plant and equipment consist of following (in thousands):

	March 31, 2011		December 31, 2010
Oil and gas Properties:
Proved oil and gas properties	$	206,212	$	206,212
Less: Accumulated depreciation, depletion and amortization		1,917		1,917
Proved oil and gas properties, net		204,295		204,295
Unproved oil and gas properties		5,656		228
Oil and gas Properties, net		209,951		204,523

Property, plant and equipment, other		897		845
Less: Accumulated depreciation		455		389
Property, plant and equipment, other, net		442		456
Total property, plant and equipment	$	210,393	$	204,979

NOTE 4. OPERATING SEGMENT DATA

Our segments derive revenues from the sale of oil and gas products. The revenues, net loss attributable to CAMAC Energy Inc., and assets of each of the reporting segments, plus the corporate function, are reported below (in thousands):

	Three Months Ended March 31,
	2011		2010
Revenues
Africa	$	-	$	-
Asia		-		77
Total revenues	$	-	$	77

	Three Months Ended March 31,
	2011			2010
Net Loss attributable to CAMAC Energy Inc. stockholders
Africa	$	(24,489	)	$	-
Asia		(691	)		(601	)
Corporate		(3,018	)		(2,573	)
Total net loss attributable to CAMAC Energy Inc. stockholders	$	(28,198	)	$	(3,174	)

	As of		As of
	March 31, 2011		December 31, 2010
Assets
Africa	$	221,395	$	216,721
Asia		911		408
Corporate		21,911		30,714
Total assets	$	244,217	$	247,843

NOTE 5. EQUITY

During the three months ended March 31, 2011, the Company issued 195,071 shares of Common Stock on exercises of options and warrants, and vesting of restricted stock awards.

Under the Company’s 2009 Equity Incentive Plan, the Company may issue stock, options or units and restricted stock awards to result in issuance of a maximum aggregate of 6,000,000 shares of Common Stock. Options awarded expire 10 years from date of grant or shorter term as fixed by the Board of Directors. During the three months ended March 31, 2011, the Company granted a total of 1,486,642 stock options and 144,688 restricted stock awards with vesting periods from 1 month to 36 months.

NOTE 6. EARNINGS PER COMMON SHARE

Basic earnings per common share (“EPS”) are computed by dividing income 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 EPS was 153,735,000 and 46,844,000 for the three months ended March 31, 2011 and 2010, respectively.

Warrants issued in stock offerings, options and restricted stock are potentially dilutive in future periods if the Company has net income. These potentially dilutive securities have been anti-dilutive for all periods to date because the Company has been in a loss position.

NOTE 7. RELATED PARTY TRANSACTIONS

Retirement and Consulting Agreement with Richard Grigg

On February 7, 2011 the Company and Mr. Grigg entered into a voluntary retirement agreement for Mr. Grigg’s retirement effective on that date. In addition, Mr. Grigg and KKSH Holdings Ltd., a company registered in the British Virgin Islands (“KKSH”) entered into General Release of All Claims Agreements with the Company in return for a payment of $50,000, acceleration of vesting with respect to options to purchase an aggregate of 31,792 shares of Company Common Stock held by Mr. Grigg and KKSH, and release by the Company of repurchase rights with respect to an aggregate of 86,925 shares of unvested restricted Company Common Stock held by Mr. Grigg. On February 8, 2011 KKSH and the Company entered into a Consulting Agreement for temporary services of Mr. Grigg through March 31, 2011 to provide transition services for a total fee of approximately $54,000.

Amended and Restated Employment Agreement with Abiola L. Lawal

Effective March 8, 2011 the Company and Mr. Lawal entered into an Amended and Restated Employment Agreement (the “Amended Lawal Employment Agreement”) pursuant to which Mr. Lawal receives an annual base salary of $315,000. In addition, Mr. Lawal is eligible for a discretionary cash performance bonus each year targeted at between 0% and 100% of his then-current annual base salary, as well as additional equity grants, in the discretion of the Company’s Board of Directors. In addition, in the event the Company terminates Mr. Lawal’s employment without Cause (as defined in the Amended Lawal Employment Agreement) or Mr. Lawal resigns for Good Reason (as defined in the Amended Lawal Employment Agreement, (i) the Company must pay to Mr. Lawal an amount equal to 24 months of his base salary plus target bonus as in effect immediately before Mr. Lawal’s termination or resignation (30 months in connection with a Change in Control, as defined in the Lawal Amended Employment Agreement), (ii) the Company must pay to Mr. Lawal an amount equal to 24 months of the maximum contribution the Company may make for Mr. Lawal under the Company’s 401(k) plan (30 months in connection with a Change in Control, as defined in the Amended Lawal Employment Agreement), (iii) any outstanding stock options and restricted stock shall become fully vested, and options shall remain exercisable for 12 months, (iv) the Company shall reimburse Mr. Lawal for up to $20,000 of outplacement services, and (v) the Company shall continue to provide Mr. Lawal and his dependents with the same level of insurance benefits received immediately prior to termination or resignation for up to 2 years, or until Mr. Lawal obtains similar replacement benefits through a new employer. Mr Abiola Lawal and Dr. Kase Lawal have no familial relationship.

OML 120/121 Agreement with CAMAC Energy Holdings Limited and Affiliates

On December 10, 2010, the Company entered into a Purchase and Continuation Agreement (the “Purchase Agreement”) with CEHL, superseding earlier related agreements. Pursuant to the Purchase Agreement, the Company agreed to acquire CEHL’s full remaining interest (the “OML 120/121 Transaction”) in the OML 120/121 PSC (the “Non-Oyo Contract Rights”). In April 2010 the Company had acquired from CEHL the Oyo Contract Rights in the OML 120/121 PSC. The OML120/121 Transaction closed on February 15, 2011. Upon consummation of the acquisition of the Non-Oyo Contract Rights under the Purchase Agreement, the Company acquired CEHL’s full interest in the OML 120/121 PSC.

In exchange for the Non-Oyo Contract Rights, the Company agreed to an option-based consideration structure and paid $5.0 million in cash to Allied Energy Plc upon the closing of the OML 120/121 Transaction on February 15, 2011. The Company has the option to elect to retain the Non-Oyo Contract Rights upon payment of additional consideration to Allied as follows:

a.	First Milestone : Upon commencement of drilling of the first well outside of the Oyo Field under the PSC, the Company may elect to retain the Non-Oyo Contract Rights upon payment to CEHL of $5 million (either in cash, or at Allied’s option, in shares);

The Purchase Agreement contained the following conditions to the closing of the Transaction: (i) CAMAC Petroleum Limited (subsidiary of the Company), CAMAC International (Nigeria) Limited (“CINL”), Allied, and Nigerian Agip Exploration Limited (“NAE”) must enter into a Novation Agreement in a form satisfactory to the Company and CAMAC Energy Holdings Limited and that contains a waiver by NAE of the enforcement of Section 8.1(e) of the PSC (providing for the continued waiver by NAE of its entitlement to “profit oil” in favor of Allied), and that notwithstanding anything to the contrary contained in the PSC, the profit sharing allocation set forth in the PSC shall be maintained after the consummation of the Transaction; (ii) the Company, and CEHL must enter into a registration rights agreement with respect to any shares issued by the Company to Allied at its election as consideration upon the occurrence of any of the above-described milestone events, in a form satisfactory to the Company and CEHL; and (iii) the Oyo Field Agreement, dated April 7, 2010, by and among the Company, CEHL and Allied, must be amended in order to remove certain indemnities with respect to Non-Oyo Operating Costs (as defined therein). In addition, CEHL must deliver the Data and certain equipment to the Company in as-is condition. The Company agreed to limited waivers of certain of these closing conditions under the Limited Waiver Agreement.

Dr. Kase Lawal, the Company’s Chief Executive Officer, Chairman and member of the Board of Directors, is a director of each of CEHL, CINL, and Allied. Dr. Lawal also owns 27.7% of CAMAC International Limited, which indirectly owns 100% of CEHL. As a result, Dr. Lawal may be deemed to have an indirect material interest in the transaction contemplated by the OML 120/121 Agreement. Chairman Lawal recused himself from participating in the consideration and approval by the Company’s Board of Directors of the OML 120/121 Transaction.

Limited Waiver Agreement

On February 15, 2011, the Company, CPL, CAMAC Energy Holdings Limited, CAMAC International (Nigeria) Limited (“CINL”), and Allied entered into a Limited Waiver Agreement Relating to Purchase and Continuation Agreement (the “Limited Waiver Agreement”). Under the Limited Waiver Agreement, the Company and CPL agreed to waivers of certain conditions to closing under the Purchase and Continuation Agreement, dated December 10, 2010, among the Company, CPL, and CEHL (the “Purchase Agreement”), permitting CEHL to cure a certain lien (the “Lien”) and deliver certain data (the “Data”) within ten days of the closing of the Purchase Agreement. The Company also indefinitely waived the requirement that CEHL deliver certain equipment and related materials. The parties agreed that if CEHL fails to discharge the Lien and deliver the Data within ten business days of the closing of the Purchase Agreement, the Company may rescind and terminate the Purchase Agreement, subject to the approval of NAE, and in any event elect to receive a refund with interest of the initial $5 million cash payment made in connection with closing or seek indemnification and other claims without regard to certain limitations on indemnification in the Purchase Agreement.

Second Novation Agreement

On February 15, 2011, the Non-Oyo Contract Rights were assigned and assumed pursuant to a Second Agreement Novating Production Sharing Contract (the “Second Novation Agreement”) by and among Allied, CINL, Nigerian NAE, and CPL. The Second Novation Agreement provides for the novation of the Non-Oyo Contract Rights from CEHL to CPL, a wholly-owned subsidiary of the Company, and consent to the novation by NAE, the operator under the OML 120/121 PSC. The Second Novation Agreement further provides for the continued waiver by NAE of its entitlement to “profit oil” in favor of Allied pursuant to Section 8.1(e) of the OML 120/121 PSC, and that notwithstanding anything to the contrary contained in the OML 120/121 PSC, the profit sharing allocation set forth in the OML 120/121 PSC shall be maintained after the consummation of the Transaction.

Amended Oyo Field Supplemental Agreement with CEHL

On February 15, 2011, Allied, CEHL and CPL entered into the Amended and Restated Oyo Field Agreement Hereby Renamed OML 120/121 Management Agreement (the “Management Agreement”). Under the Management Agreement, the arrangements entered into pursuant to the Supplemental Agreement were extended to cover the entirety of OML 120/121 and that the indemnities described above with respect to non-Oyo Field operating costs provided for under the Oyo Field Agreement were removed.

Registration Rights Agreements with CEHL

On February 15, 2011, the Company and CEHL entered into a Registration Rights Agreement (the “Registration Rights Agreement”), pursuant to which the Company agreed to prepare and file with the SEC one or more registration statements covering the resale of any and all shares of the common stock of the Company issued to Allied under an option-based consideration structure pursuant to the Purchase Agreement defined below (related to the acquisition of the non-Oyo portion of OML 120/121), in addition to providing certain “piggyback” and other registration rights to CEHL with respect to the shares issued, in each case, subject to certain limitations and conditions. Each registration statement must be filed within 15 days of the Company’s receipt of Allied’s election to receive shares under the Purchase Agreement (subject to such notice being received within 15 days of the occurrence of a milestone under the Purchase Agreement). If any shares are not covered by a registration statement within 90 days following the required filing date of the registration statement, then the Company is required to pay liquidated damages to CEHL.

Term Credit Facility Commitment Letter with Allied

On March 21, 2011, the Company executed a commitment letter to utilize a term credit facility of $25 million from Allied to meet a substantial portion of its cash obligations for workover expenses on Oyo Field well #5. We expect the credit facility to be finalized in early May 2011 and to provide for an annual interest rate based on 30 day Libor plus two percentage points with all amounts due and payable within 24 months from the closing date.

Employment Agreement and Separation and Release Agreement with Byron A. Dunn

Effective October 1, 2010, the Company appointed Mr. Byron A. Dunn as the Company’s new President, Chief Executive Officer, and member of the Board of Directors. The Company and Mr. Dunn were parties to an employment agreement (“Dunn Employment Agreement”) pursuant to which Mr. Dunn received an annual base salary of $375,000, a one-time cash sign-on bonus of $150,000, and payment of certain club membership and transportation expenses, and Mr. Dunn was also eligible to receive a discretionary cash performance bonus each year targeted at 100% of his then-current annual base salary. Also, effective on his start date of October 1, 2010, the Company issued to Mr. Dunn 250,000 shares of Company restricted Common Stock subject to a one year vesting period, and an option to purchase 1.5 million shares of the Company’s Common Stock vesting 1/3 on December 1 of each of 2011, 2012 and 2013. In addition, in the event the Company terminated Mr. Dunn’s employment without Cause (as defined in the Dunn Employment Agreement) or Mr. Dunn resigned for Good Reason (as defined in the Employment Agreement, (i) the Company would have been required to pay to Mr. Dunn an amount equal to 24 months of his base salary plus target bonus as in effect immediately before Mr. Dunn’s termination or resignation (30 months in connection with a Change in Control, as defined in the Dunn Employment Agreement), (ii) the Company would have been required to pay to Mr. Dunn an amount equal to 24 months of the maximum contribution the Company may have made for Mr. Dunn under the Company’s 401(k) plan (30 months in connection with a Change in Control, as defined in the Employment Agreement), (iii) any outstanding stock options and restricted stock would have become fully vested, and options would have remained exercisable for 12 months, (iv) the Company would have been required to reimburse Mr. Dunn for up to $20,000 of outplacement services, and (v) the Company would have been required to continue to provide Mr. Dunn and his dependents with the same level of insurance benefits received immediately prior to termination or resignation for up to 2 years, or until Mr. Dunn obtained similar replacement benefits through a new employer. Effective April 11, 2011, Mr. Dunn resigned from all his positions with the Company and the Dunn Employment Agreement was terminated.

On April 11, 2011, in connection with Mr. Dunn’s resignation, the Company agreed to provide Mr. Dunn with the following severance and other benefits pursuant to a Separation Agreement and General Release of Claims entered into by and between Mr. Dunn and the Company: (i) the Company agreed to pay Mr. Dunn $400,000 in cash upon the expiration of seven days following the effective date (which amount was paid on April 19, 2011), and $200,000 in cash ninety days following the effective date of the severance agreement; (ii) monthly reimbursement of Mr. Dunn’s health benefits under the Company’s group health and dental plan for up to eighteen months following the effective date of the severance agreement; and (iii) upon the expiration of seven days following the effective date of the severance agreement, 250,000 shares of restricted stock issued to Mr. Dunn under the Company’s 2009 Equity Incentive Plan shall become fully vested (which became fully vested on April 19, 2011). In addition, the Company and Mr. Dunn agreed to certain other customary terms and conditions, including a release of potential claims, preservation of proprietary and confidential information, and indemnities.

The Separation and General Release of Claims Agreement extinguishes all rights, if any, which Mr. Dunn may have, contractual or otherwise, relating to his employment with Company, including any rights to severance benefits under the Dunn Employment Agreement.

NOTE 8. FINANCIAL INSTRUMENTS FAIR VALUES AND FAIR VALUE ADJUSTMENTS

The March 31, 2011, unaudited consolidated balance sheet includes an available-for-sale equity investment in a nonsubsidiary company carried at a fair value of $276,000. The fair value was determined using “Level 1” inputs as defined in ASC Topic 820 (Fair Value Measurements and Disclosures). Level 1 inputs represent inputs observable in an active market, which in this case is a public active stock market.

At March 31, 2011, the carrying amounts of the Company’s other financial instruments, which include cash equivalents, short- and long-term investments, trade receivables, deposits, long-term advances, accounts payable and accrued expenses approximate their fair values, due to the short-term nature and maturities of many of the above listed items.

NOTE 9. COMPREHENSIVE INCOME (LOSS)

Comprehensive income (loss) was calculated as follows (in thousands):

	For Three Months Ended March 31,
	2011			2010

Net Loss	$	(28,248	)	$	(3,322	)

Other comprehensive income (loss) - pre-tax and net of tax:
Currency translation adjustment		13			(7	)
Unrealized gain (loss) on investment in securities		4			(162	)
Total other comprehensive income (loss)		17			(169	)

Comprehensive income (loss)		(28,231	)		(3,491	)

Less: Comprehensive (income) loss - Noncontrolling interests share:
Net loss plus pre-tax and net of tax other
comprehensive income (loss)		48			151

Comprehensive income (loss) - Camac Energy Inc. stockholders	$	(28,183	)	$	(3,340	)

NOTE 10. LITIGATION AND CONTINGENCIES

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, 2011 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 net income or loss.

NOTE 11. SUBSEQUENT EVENTS

As discussed in Note 7, effective April 11, 2011, Mr. Byron A. Dunn resigned as Chief Executive Officer, President, and Director of the Company.

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

CAMAC Energy Inc. is a publicly traded Company which engages in the exploration, development, and production of oil and gas outside the U.S., directly and through joint ventures and other partnerships in which it may participate. The Company controls the rights to significant gas acreage under contract in China and has interests in OML 120/121 oil leases in deepwater offshore Nigeria. The Company is a strategic partner with several major energy companies in oil and gas fields in Nigeria and China. The Company’s current operations commenced in 2005 through IMPCO, formed as a limited liability company under New York State law on August 25, 2005. Members of the Company’s senior management team have experience in the fields of international business development, geology, petroleum engineering, strategy, government relations, and finance and will seek to utilize their experience, expertise and contacts to create value for shareholders. Oil and gas exploration and production operations are managed geographically. Our current operations are in Nigeria and China.

OML 120/121 Transaction

a.	First Milestone : Upon commencement of drilling of the first well outside of the Oyo Field under the PSC, the Company may elect to retain the Non-Oyo Contract Rights upon payment to CEHL of $5 million (either in cash, or at Allied’s option, in shares);

Well # 5 workover in the Oyo Field

The Company completed the workover on well #5 in the Oyo Field in mid-January 2011 and incurred a total cost of approximately $55.1 million to reduce gas production and to improve the daily crude oil production rate from this well. Of this amount, $30.7 million was charged to expense as of December 31, 2010 for costs incurred as of that date and the remaining $24.4 million was charged to expense during the quarter ended March 31, 2011. The Company plans to pay for the workover using available cash, a debt facility to be entered into with Allied and through Oyo Field lifting proceeds. The Company is testing the flow rates to evaluate the ultimate outcome of the workover on Oyo well #5.

The Company expects to utilize a term credit facility of $25 million from Allied, an affiliated company, which has agreed to provide this facility, in order to meet a substantial portion of the Company’s cash obligations with respect to the workover on well #5 in the Oyo Field. We expect the credit facility to provide for an annual interest rate based on 30 day Libor plus two percentage points with all amounts due and payable within 24 months from the closing date, expected in May 2011. The workover costs will be recovered as Cost Oil in revenues under the OML 120/121 PSC starting in second half of 2011. The portion of the workover funded from the Company’s own cash will also be recovered as Cost Oil in revenues and thus is expected to be available for future operations after such recovery occurs.

The Oyo Field in Nigeria contains the Company's entire total proved reserves as of March 31, 2011. The well #5 was shut in during the workover operation for part of December 2010 and January 2011. During the three months ended March 31, 2011, the average gross production from the Oyo Field was 4,017 barrels per day and the Company’s share of average daily net production was 217 barrels per day.

In January 2011, the Company and its Chinese partner, PetroChina, approved a work program to expedite exploration and delineation of the gas resources in the Zijinshan contract area. The work program consists of drilling three additional wells and conducting a seismic reinterpretation integrating the data obtained from recent drilling. The first of the three wells, ZJS-3, spudded mid-March 2011, and reached its target depth on May 1, 2011. T he Company anticipates setting casing and flow testing this well upon completion of the drilling operations on ZJS-4 and ZJS-5, which we plan to drill in 2011. As of March 31, 2011, the Company incurred and capitalized approximately $506,000 as exploratory drilling costs related to ZJS-3, pending determination of proved reserves.

Results of Operations

Consolidated Statements of Operations

Comparison of Three Months Ended March 31, 2011 and 2010

There were no revenues in the three months ended March 31, 2011; as compared to $77,000 for the three months ended March 31, 2010. There were no liftings in the three months ended March 31, 2011, accordingly, no revenue was recorded. The Company did not have significant oil and gas operations in the three months ended March 31, 2010.

Our lease operating expenses and production costs in the three months ended March 31, 2011 were $25,073,000 as compared to $631,000 for the three months ended March 31, 2010. The increase of $24,442,000 was primarily due to the remaining workover costs for well #5 in the Oyo Field in Africa of $24,477,000 in the current period.

Our exploratory expenses in the three months ended March 31, 2011 were $82,000 as compared to $22,000 for the three months ended March 31, 2010. The $60,000 increase was primarily due to additional costs related to the ZJS-2 well in China in the current period.

Our selling, general and administrative expenses in the three months ended March 31, 2011were $2,990,000 as compared to $2,693,000 for the three months ended March 31, 2010. The increase of $297,000 was primarily due to an increase in salaries, benefits and bonus expenses of $270,000.

Our depreciation, depletion and amortization expenses in the three months ended March 31, 2011 were $66,000 as compared to $49,000 for the three months ended March 31, 2010. The increase of $17,000 was primarily due to an increase in our depreciable asset base in the current period.

For the three months ended March 31, 2011, the net loss attributable to CAMAC Energy Inc. stockholders was $28,198,000 as compared to $3,174,000 for the three months ended March 31, 2010. The increase in net loss attributable to CAMAC Energy Inc. stockholders of $25,024,000 was primarily due to the remaining workover cost for well #5 in the Oyo Field in Africa of $24,477,000.

The following table compares revenues and net loss attributable to CAMAC Energy Inc. stockholders for each of our business segments for the three months ended March 31, 2011 and 2010. Net loss attributable to CAMAC Energy Inc. stockholders consists of our revenues less costs and operating expenses, other income (expense), income tax expense and noncontrolling interests (in thousands):

	Revenues							Net Loss attributable to Camac Energy Inc. stockholders
	Three Months Ended March 31,							Three Months ended March 31,
	2011		2010		Change			2011			2010			Change

Africa	$	-	$	-	$	-		$	(24,489	)	$	-		$	(24,489	)
Asia		-		77		(77	)		(691	)		(601	)		(90	)
Corporate		-		-		-			(3,018	)		(2,573	)		(445	)
Total	$	-	$	77	$	(77	)	$	(28,198	)	$	(3,174	)	$	(25,024	)

Africa

There were no liftings in the three months ended March 31, 2011; accordingly no revenue was recorded. Net loss attributable to CAMAC Energy Inc. stockholders increased by $24,489,000 in Africa, primarily due to recording the remaining workover costs for well #5 in the Oyo Field of $24,477,000 in the current period. The Company did not have oil and gas operations in the three months ended March 31, 2010.

Net loss attributable to CAMAC Energy Inc. stockholders in Asia for the three months ended March 31, 2011 was $691,000 as compared to $601,000 for the three months ended March 31, 2010. The increase of $90,000 was primarily due to additional costs related to the drilling of well ZJS-2 in the current period.

Net loss attributable to CAMAC Energy Inc. stockholders in Corporate for the three months ended March 31, 2011was $3,018,000 as compared to $2,573,000 for the three months ended March 31, 2010. The increase of $445,000 was primarily due to an increase in salaries, benefits and bonus expenses of $270,000.

Liquidity and Capital Resources

The net cash provided by (used in) each of the operating, investing and financing activities are summarized in the following table and discussed in further detail below (in thousands):

	Three Months Ended March 31,
	2011			2010			Change

Net cash used in operating activities	$	(3,203	)	$	(2,327	)	$	(876	)
Net cash (used in) provided by investing activities		(5,210	)		1,319			(6,529	)
Net cash provided by financing activities		30			35,353			(35,323	)
Effect of exchange rate changes on cash		17			(4	)		21
Net (decrease) increase in cash and cash equivalents	$	(8,366	)	$	34,341		$	(42,707	)

During the three months ended March 31, 2011, net cash used in operating activities was approximately $3,203,000 as compared to $2,327,000 for the three months ended March 31, 2010. The increase of $876,000 was primarily due to an increase in operating costs in the current period.

During the three months ended March 31, 2011, net cash used in investing activities was $5,210,000 as compared to $1,319,000 of cash provided by investing activities in the three months ended March 31, 2010. The change of $6,529,000 was primarily due to the $5,000,000 payment related to the OML 120/121 Transaction in the current period.

There were minimal cash flows from financing activities during the three months ended March 31, 2011 as compared to $35,353,000 for the three months ended March 31, 2010. The prior year period activity was primarily due to two registered direct offerings of equity securities.

The Company expects to utilize a term credit facility of $25 million from Allied, an affiliated company, to meet a substantial portion of its cash obligations for workover expenses on well #5 in Oyo Field. We expect the credit facility to be finalized in early May 2011 and to provide for an annual interest rate based on 30 day Libor plus two percentage points with all amounts due and payable within 24 months from the closing date.

The Company’s unaudited consolidated financial statements have been prepared assuming it will continue as a going concern. Based upon current cash flow projections, management believes that the Company will have sufficient capital resources to meet projected cash flow requirements through March 2012.

Our continued operations will depend on whether we are able to raise additional funds through equity, debt financing or strategic alliances. Previously, all of our financing had been raised through private placements and registered direct offerings of equity instruments. Such additional funds may not become available on acceptable terms, if at all, and any additional funding obtained may not be sufficient to meet our needs in the long-term.

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.

Tabular Disclosure of Contractual Obligations

Please see our Annual Report on Form 10-K for the year ended December 31, 2010, Part II, Item 7 for a table summarizing the Company’s significant contractual obligations as of December 31, 2010. No material changes to such information have occurred during the three months ended March 31, 2011 other than those disclosed in Note 7 related to Separation Agreement and General Release of Claims with Byron A. Dunn.

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. Please see our Annual Report on Form 10-K for the year ended December 31, 2010 under Part II, Item 7A. No material changes to such information have occurred during the three months ended March 31, 2011.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures .

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosures.

As of the end of the period covered by this quarterly report, we have evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, or the Exchange Act. This evaluation was carried out under the supervision and with the participation of our management, including our principal executive officer and principal financial and accounting officer. Based on this evaluation, these officers have concluded that, as of March 31, 2011, our disclosure controls and procedures are effective at a reasonable assurance level in ensuring that the information required to be disclosed by us in reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

(b) Changes in Internal Control Over Financial Reporting.

There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

ITEM 1A. RISK FACTORS

Please see our Annual Report on Form 10-K for the year ended December 31, 2010, Part I, Item 1A, for discussion on the risk factors. No material changes to such information have occurred during the three months ended March 31, 2011.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On January 5, 2011, the Company issued an aggregate of 6,804 shares of Common Stock to one person upon the cashless "net" exercise by such person on such date of a placement agent warrant exercisable at $1.50 per share for an aggregate of 30,000 shares of the Company's Common Stock. The aggregate number of shares of Common Stock issued upon cashless “net” exercise was reduced from 30,000 shares of Common Stock to 6,804 shares of Common Stock to effect the cashless "net" exercise of the warrant in accordance with its terms, assuming a deemed fair market value of $1.94 per share, as calculated under the warrant as the closing price quoted for one share of the Company's Common Stock on the last trading day prior to the exercise date.

On February 2, 2011, the Company issued an aggregate of 21,551 shares of Common Stock to one person upon the cashless "net" exercise by such person on such date of a placement agent warrant exercisable at $1.25 per share for an aggregate of 65,000 shares of the Company's Common Stock. The aggregate number of shares of Common Stock issued upon cashless “net” exercise was reduced from 65,000 shares of Common Stock to 21,551 shares of Common Stock to effect the cashless "net" exercise of the warrant in accordance with its terms, assuming a deemed fair market value of $1.87 per share, as calculated under the warrant as the closing price quoted for one share of the Company's Common Stock on the last trading day prior to the exercise date.

Each of the warrants described above were originally issued to Garden State Securities, Inc. (the “Original Holder”) in its role as a placement agent for the Company on May 7, 2007, and subsequently assigned to the individual warrant holders in August 2007.

No underwriters were involved in the transactions described above. All of the securities issued in the foregoing transactions were issued by the Company in reliance upon the exemption from registration available under Section 4(2) of the Securities Act, including Regulation D promulgated thereunder, in that the transactions involved the issuance and sale of the Company’s securities to financially sophisticated individuals or entities that were aware of the Company’s activities and business and financial condition and took the securities for investment purposes and understood the ramifications of their actions. The Company did not engage in any form of general solicitation or general advertising in connection with the transaction. The Original Holder of the warrants represented that it was an “accredited investor” as defined in Regulation D at the time of issuance of the original warrants, and that it was acquiring such securities for its own account and not for distribution. All certificates representing the securities issued have a legend imprinted on them stating that the shares have not been registered under the Securities Act and cannot be transferred until properly registered under the Securities Act or an exemption applies.

The Company did not repurchase any shares of its Common Stock during the quarter ended March 31, 2011.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

ITEM 4. (REMOVED AND RESERVED)

ITEM 5. OTHER INFORMATION

Exhibit Number		Description
3.1		Amended and Restated Bylaws of the Company as of April 11, 2011.
4.1		Registration Rights Agreement, dated as of February 15, 2011, by and among CAMAC Energy Inc., CAMAC Energy Holdings Limited, Allied Energy Plc, and CAMAC International (Nigeria) Limited (incorporated by reference to Exhibit 4.1 of our Current Report on Form 8-K filed on February 16, 2011).
10.1		Limited Waiver Agreement Related to Purchase and Continuation Agreement, dated as of February 15, 2011, by and among CAMAC Energy Inc., CAMAC Petroleum Inc., CAMAC Energy Holdings Limited, Allied Energy Plc, and CAMAC International (Nigeria) Limited (incorporated by reference to Exhibit 10.1 of our Current Report on Form 8-K filed on February 16, 2011).
10.2		Second Agreement Novating Production Sharing Contract, dated as of February 15, 2011, by and among Allied Energy Plc, CAMAC International (Nigeria) Limited, Nigerian AGIP Exploration Limited, and CAMAC Petroleum Limited (incorporated by reference to Exhibit 10.2 of our Current Report on Form 8-K filed on February 16, 2011).
10.3		Amended and Restated Oyo Field Agreement Hereby Renamed OML 120/121 Management Agreement, dated as of February 15, 2011, by and among CAMAC Petroleum Limited, CAMAC Energy Holdings Limited, and Allied Energy Plc (incorporated by reference to Exhibit 10.4 of our Current Report on Form 8-K filed on February 16, 2011).
10.4		Amended and Restated Employment Agreement effective March 8, 2011, by and between Abiola L. Lawal and the Company (incorporated by reference to Exhibit 10.37 of our Annual Report on Form 10-K filed on March 11, 2011).
10.5		Separation Agreement and General Release of Claims effective April 11, 2011 by and between Mr. Byron Dunn and the Company.
31.1		Certification of the Registrant’s Principal Executive Officer under Exchange Act Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of the Registrant’s Principal Financial Officer under Exchange Act Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of the Registrant’s Principal Executive Officer under 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of the Registrant’s Principal Financial Officer under 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Pursuant to the requirements of Section 13 or 15(d) 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.


Dated: May 3, 2011	By:	/s/ Dr. Kase Lukman Lawal
		Dr. Kase Lukman Lawal
		Chief Executive Officer (Principal Executive Officer)

	By:	/s/ Abiola l. lawal
		Abiola L. Lawal
		Chief Financial Officer (Principal Financial and Accounting Officer)

AMENDED AND RESTATED BYLAWS

CAMAC ENERGY INC.

ARTICLE I

CORPORATE OFFICES

1.1 Registered Office . The registered office of CAMAC Energy Inc. (the “Corporation”) shall be located in the City of Dover, County of Kent, and State of Delaware.

1.2 Other Offices . The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or the business of the Corporation may require.

ARTICLE II

MEETINGS OF STOCKHOLDERS

2.1 Place of Meetings . All meetings of the stockholders for the election of Directors or for any other purpose shall be held at such place, within or without the State of Delaware, as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting, or if authorized by the Board of Directors may be held by means of remote communication in accordance with applicable law.

2.2 Annual Meeting . The annual meeting of stockholders for the election of Directors and for such other business as may properly be conducted at such meeting shall be held at such time and date as shall be designated from time to time by the Board of Directors and stated in the notice of the meeting. The Board of Directors shall have the authority to postpone to a later date and/or time the annual meeting of stockholders.

2.3 Special Meetings . Special meetings of stockholders of the Corporation may be called by the Chairman of the Board, the Board of Directors acting pursuant to a resolution adopted by a majority of the Whole Board of Directors or upon written notice to the Board of Directors by holders of 25% or more of the outstanding shares of voting capital stock of the Corporation, held individually or in the aggregate. For purposes of these Bylaws, the term “Whole Board of Directors” shall mean the total number of authorized Directors whether or not there exist any vacancies in previously authorized directorships. Business transacted at special meetings shall be confined to the purpose or purposes stated in the notice of meeting. Nothing in this Section 2.3 shall be deemed to affect any rights of the holders of any series of Preferred Stock to call special meeting pursuant to any applicable provisions of the Amended and Restated Certificate of Incorporation of the Corporation as the same may be amended from time to time (the “Certificate of Incorporation”).

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2.4 Notice of Meetings . Unless otherwise required by law or the Certificate of Incorporation, written notice of the date, time and place, if any, of the annual and of any special meeting of the stockholders shall be given to each stockholder entitled to vote at such meeting not less than ten (10) nor more than sixty (60) days before the date of the meeting. Such written notice of any meeting of stockholders shall state the place, if any, date and hour of the meeting, the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such meeting, and, in the case of a special meeting, the purposes of the meeting.

2.5 Manner of Giving Notice . Except as otherwise required by the Certificate of Incorporation or as otherwise provided herein, notices to Directors and stockholders shall be in writing and delivered personally or mailed to the Directors or stockholders at their address appearing on the books of the Corporation. Notice to Directors may be given by telegram, telecopier, telephone, facsimile or any other means of electronic transmission.

2.6 Waiver of Notice . A written waiver of any notice, signed by a stockholder, Director, officer, employee or agent, whether before or after the time of the event for which notice is to be given, shall be deemed equivalent to the notice required to be given to such stockholder, Director, officer, employee or agent. Neither the business nor the purpose of any meeting need be specified in such a waiver. Attendance at any meeting shall constitute waiver of notice except attendance for the sole purpose of objecting to the timeliness of notice at the beginning of the meeting.

2.7 Chairman and Secretary . The Chairman of the Board, or in the Chairman’s absence the Chief Executive Officer, or in the Chief Executive Officer’s absence the President, or in the President’s absence the Chief Operating Officer, or in the Chief Operating Officer’s absence a Vice President, or in the absence of a Vice President a chairman designated by the Board of Directors, shall preside over and act as chairman of the meeting of the stockholders. The Corporate Secretary, or an Assistant Corporate Secretary, of the Corporation shall act as secretary at all meetings of the stockholders, but in their absence, a secretary designated by the chairman of the meeting shall act as secretary of the meeting of the stockholders.

2.8 Record Date . In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date, unless otherwise required by law, shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided , however , that the Board of Directors may fix a new record date for the adjourned meeting.

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2.9 Persons Entitled to Vote . A complete list of stockholders entitled to vote at any meeting of stockholders, arranged in alphabetical order and showing the address of each such stockholder and the number of shares of capital stock registered in his or her name, shall be prepared and made by the officer who has charge of the stock ledger of the Corporation, at least ten (10) days before every meeting of stockholders, and shall be open to the examination of any such stockholder in the manner provided by law. The stockholder list shall also be kept at the place of the meeting during the whole time thereof and shall be open to the examination of any such stockholder who is present. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the list required by this Section 2.9 or to vote in person or by proxy at any meeting of stockholders.

2.10 Quorum . Unless otherwise required by law or the Certificate of Incorporation, the holders of a majority in voting power of all of the then outstanding shares of the capital stock of the Corporation entitled to be voted at a meeting of the stockholders represented in person or by proxy, shall constitute a quorum for the transaction of business at such meeting. In the absence of a quorum, the stockholders so present may, by a majority in voting power thereof, adjourn the meeting from time to time in the manner provided by Section 2.11 of these Bylaws until a quorum shall attend. The stockholders present at a duly called or held meeting of the stockholders at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum; provided that any action taken (other than adjournment) is approved by the vote required by Section 2.12 of these Bylaws. In the absence of a quorum, no business other than adjournment may be transacted, except as described in this Section 2.10.

2.11 Adjournment . Any meeting of the stockholders may be adjourned from time to time either by the Chairman of the meeting or by a majority in voting power represented by the stockholders entitled to vote at the meeting, present in person or represented by proxy. At any such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted by a quorum of the stockholders at the meeting as originally convened. Notice need not be given of any adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment action is taken, unless the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, in which case a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

2.12 Voting and Proxies . Unless otherwise required by law or the Certificate of Incorporation, each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder. Each stockholder of record entitled to vote at a meeting of stockholders may vote or express such consent or dissent in person or may authorize another person or persons to vote or act for him or her by proxy. No such proxy shall be voted or acted upon after three (3) years from its date, unless the proxy provides for a longer period. A proxy shall be irrevocable if it states that it is irrevocable and if, and only so long as, it is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or by delivering a proxy in accordance with applicable law bearing a later date to the Corporate Secretary of the Corporation. Voting at meetings of stockholders need not be by written ballot. At all meetings of stockholders for the election of Directors, a plurality of the votes cast by the shares of capital stock present in person and represented by proxy at the meeting at which the election of Directors is considered and entitled to vote in the election of Directors shall be sufficient to elect. All other elections and questions shall, unless otherwise required by law, the Certificate of Incorporation, or the rules or regulations of any stock exchange applicable to the Corporation, be decided by the affirmative vote of the holders of a majority in voting power of the shares of stock of the Corporation which are present in person or by proxy and entitled to vote thereon.

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2.13 Action at Meetings . The Corporation may, and to the extent required by law, shall, in advance of any meeting of stockholders, appoint one or more inspectors to act at the meeting and make a written report thereof. The Corporation may designate one or more alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the person presiding at the meeting may, and to the extent required by law, shall, appoint one or more inspectors to act at the meeting. Each inspector, before entering upon the discharge of his or her duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of his or her ability. Every vote taken by ballots shall be counted by a duly appointed inspector or inspectors.

2.14 Action in Lieu of Meetings . Subject to rights, if any, of any series of Preferred Stock then outstanding, except as otherwise provided in the Certificate of Incorporation, whenever the vote of stockholders at a meeting thereof is required or permitted to be taken for or in connection with any corporate action, the meeting and vote of stockholders may be dispensed with and such action may be taken with the written consent of stockholders having not less than the minimum percentage of the vote required by law for the proposed corporate action, provided that prompt notice shall be given to all stockholders of the taking of corporate action without a meeting and by less than unanimous consent.

2.15 Remote Communications . If authorized by the Board of Directors, and subject to such guidelines and procedures as the Board of Directors may adopt, stockholders and proxyholders not physically present at a meeting of stockholders, by means of remote communications:

(a) may participate in a meeting of stockholders; and

(b) shall be deemed present in person and may vote at a meeting of stockholders; provided that (i) reasonable procedures have been implemented to verify that each person deemed present and permitted to vote at the meeting by means of remote communications is a stockholder or proxyholder, (ii) reasonable procedures are implemented to provide stockholders and proxyholders participating in the meeting by means of remote communications with a reasonable opportunity to participate in the meeting and to vote on matters submitted to stockholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with the proceedings, and (iii) if any stockholder or proxyholder votes or takes other action at the meeting by means of remote communications, a record of such vote or other action shall be maintained by the Corporation.

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2.16 Nominations and Proposals .

(a) Nominations and Proposals at Annual Meetings . Nominations of persons for election to the Board of Directors and the proposal of business to be considered by the stockholders may be made at any annual meeting of stockholders only (i) pursuant to the Corporation’s notice of meeting (or any supplement thereto), (ii) by or at the direction of the Board of Directors, or (iii) by any stockholder of the Corporation (A) who is a stockholder of record on the date the stockholder’s notice provided for in this Section 2.16 is delivered to the Corporate Secretary and on the record date for the determination of stockholders entitled to vote at such annual meeting, and (B) who complies with the applicable notice procedures set forth in this Section 2.16.

(b) Stockholder Notice for Annual Meetings . For nominations or other business to be properly made by a stockholder at an annual meeting in accordance with this Section 2.16, such stockholder must have given timely notice thereof in proper written form to the Corporate Secretary and any such proposed business other than the nomination of persons for election to the Board of Directors must constitute a proper matter for stockholder action. To be timely, a stockholder’s notice must be delivered to the Corporate Secretary at the principal executive offices of the Corporation not later than ninety (90) days nor earlier than one hundred twenty (120) days prior to the first anniversary date of the preceding year’s annual meeting; provided , however , that in the event that the date of the annual meeting is more than thirty (30) days before or more than seventy (70) days after such anniversary date, a stockholder’s notice shall also be considered timely if it is so delivered not earlier than one hundred twenty (120) days prior to such annual meeting, nor later than the later of ninety (90) days prior to such annual meeting or ten (10) days after the day on which public announcement of the date of such meeting was first made; provided, further, that in the event that the number of Directors to be elected to the Board of Directors of the Corporation at an annual meeting is increased and there is no public announcement by the Corporation naming the nominees for the additional directorships at least one hundred (100) days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice shall also be considered timely, but only with respect to nominees for the additional directorships, if it is so delivered not later than ten (10) days after the day on which such public announcement is first made by the Corporation. All notices shall be received by the Corporate Secretary by the close of business on the specified date to be deemed to have been delivered on that date. In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period or extend the foregoing time period.

(c) Nominations and Proposals at Special Meetings . Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation’s notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which Directors are to be elected pursuant to the Corporation’s notice of meeting (i) by or at the direction of the Board of Directors, or (ii) provided that the Board of Directors has determined that Directors shall be elected at such meeting, by any stockholder of the Corporation (A) who is a stockholder of record on the date the stockholders notice provided for in this Section 2.16 is delivered to the Corporate Secretary and on the record date for the determination of stockholders entitled to vote at such special meeting, and (B) who complies with the applicable notice procedures set forth in this Section 2.16.

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(d) Stockholder Notice for Special Meetings . For nominations to be properly made by a stockholder at a special meeting of stockholders called by the Corporation for the purpose of electing one or more Directors to the Board of Directors, such stockholder must have given timely notice thereof in proper written form to the Corporate Secretary. To be timely, a stockholder’s notice must be delivered to the Corporate Secretary at the principal executive offices of the Corporation not earlier than one hundred twenty (120) days prior to such special meeting, nor later than the later of ninety (90) days prior to such special meeting or ten (10) days after the day on which public announcement of the date of such meeting and the proposed nominees to be elected at such meeting was first made. All notices shall be received by the Corporate Secretary by the close of business on the specified date to be deemed to have been delivered on that date. In no event shall the public announcement of an adjournment or postponement of a special meeting commence a new time period or extend the foregoing time period.

(e) Form of Stockholders Notice . To be in proper written form, a stockholder’s notice for both annual and special meetings must set forth:

(i) as to each person whom the stockholder proposes to nominate for election as a Director, (A) the name, age, business address and residence address of the person, (B) the principal occupation or employment of the person, (C) the class or series and number of shares of capital stock of the Corporation that are owned beneficially or of record by the person, (D) any other information relating to the person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of Directors pursuant to Section 14 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations promulgated thereunder, and (E) such notice must be accompanied by a written consent of each proposed nominee to being named as a nominee and to serve as a Director if elected;

(ii) as to any other business that the stockholder proposes to bring before the meeting, (A) a brief description of the business desired to be brought before the meeting, (B) the text of the proposal or business (including the text of any resolutions proposed for consideration, and, in the event that such business includes a proposal to amend the Bylaws of the Corporation, the language of the proposed amendment), (C) the reasons for conducting such business at the meeting, and (D) any material interest of such stockholder in the business being proposed and the beneficial owner, if any, on whose behalf the proposal is being made; and

(iii) as to the stockholder giving this notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made, (A) the name and record address of such stockholder and any such beneficial owner, (B) the class or series and number of shares of capital stock of the Corporation that are owned beneficially or of record by such stockholder and beneficial owner, (C) a description of all arrangements or understandings between such stockholder and any such beneficial owner and each proposed nominee and any other persons (including their names) pursuant to which the nomination(s) are to be made by such stockholder, (D) a representation that such stockholder is a stockholder of record entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to nominate the persons and/or conduct the business being proposed as described in the notice, and (E) a representation of whether such stockholder or any such beneficial owner intends or is part of a group which intends (1) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the Corporation’s outstanding capital stock required to approve or adopt the proposal or elect the nominee, and/or (2) otherwise to solicit proxies from stockholders in support of such proposal or nomination. The foregoing notice requirements shall be deemed satisfied by a stockholder with respect to an annual meeting if the stockholder has notified the Corporation of his or her intention to present a proposal at such annual meeting in compliance with Regulation 14A (or any successor thereof) promulgated under the Exchange Act and such stockholder’s proposal has been included in a proxy statement that has been prepared by the Corporation to solicit proxies for such annual meeting. The Corporation may require any proposed nominee to furnish such other information as it may reasonably require to determine the eligibility of such proposed nominee to serve as a Director of the Corporation.

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(f) General . Only such persons who are nominated in accordance with the procedures set forth in this Section 2.16 shall be eligible to be elected at an annual or special meeting of stockholders of the Corporation to serve as Directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 2.16. Except as otherwise provided by law, the chairman of the meeting shall have the power and duty (i) to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Section 2.16 (including whether the stockholder or beneficial owner, if any, on whose behalf the nomination or proposal is made solicited (or is part of a group which solicited) or did not so solicit, as the case may be, proxies in support of such stockholder’s nominee or proposal in compliance with such stockholder’s representation as required by Section 2.16(e)), and (b) if a proposed nomination or business was not made or proposed in compliance with this Section 2.16, to declare that such nomination shall be disregarded or that such proposed business shall not be transacted. Notwithstanding the foregoing provisions of this Section 2.16, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the Corporation to present a nomination or business, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. Notwithstanding the foregoing provisions of this Section 2.16, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 2.16. Nothing in this Section 2.16 shall be deemed to affect any rights (i) of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Regulation 14A under the Exchange Act, or (ii) of the holders of any series of Preferred Stock to elect Directors pursuant to any applicable provisions of the Certificate of Incorporation.

ARTICLE III

BOARD OF DIRECTORS

3.1 General Powers . The business of the Corporation shall be managed by or under the direction of its Board of Directors which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by law or by the Certificate of Incorporation or by these Bylaws directed or required to be exercised or done by the stockholders.

3.2 Number of Directors . Subject to the rights, if any, of any series of Preferred Stock then outstanding, the Board of Directors shall consist of not less than three (3) nor more than nine (9) Directors, with such number to be established, from time to time, by resolution of the Board. The initial number of Directors shall be three (3).

3.3 Term of Office . The Board of Directors elected at or as of the Effective Date shall hold office until the first annual meeting of stockholders held after the Effective Date and until their successors have been duly elected and qualified or until there is a decrease in the number of Directors. Thereinafter, Directors will be elected at the annual meeting of stockholders and shall hold office until the annual meeting of the stockholders next succeeding his election, or until his or her successor shall have been duly elected and qualified or until such Director’s death, resignation or removal. Any Director who is also an executive officer of the Corporation shall, immediately upon ceasing to be an executive officer of the Corporation for any reason whatsoever, be disqualified from continuing to serve as a Director and such Director's term of office as a Director shall thereupon automatically expire.

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3.4 Election . Within the limits specified herein and in the Corporation’s Certificate of Incorporation, the election of Directors shall be determined by the stockholders of the Corporation by a plurality of the votes cast by the shares of capital stock present in person or represented by proxy at the meeting in which the election of Directors is considered and entitled to vote in the election of Directors. The Directors need not be stockholders of the Corporation.

3.5 Resignation . Any Director may resign by delivering a written resignation to the Corporation at its principal office or to the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Corporate Secretary or the Board of Directors. Such resignation shall be effective upon receipt unless it is specified to be effective at some other time or upon the happening of some other event. If the resignation specifies effectiveness at a future time, a successor may be elected pursuant to Section 3.7 of these Bylaws to take office on the date that the resignation becomes effective.

3.6 Removal . Except for such additional directors, if any, elected by a series of Preferred Stock then outstanding, any Director or the entire Board of Directors may be removed, but only for cause, and only by the affirmative vote of the holders of at least a majority in interest of the voting power of all of the then outstanding shares of the capital stock of the Corporation then entitled to vote at an election of Directors, voting together as a single class. Nothing in this Section 3.6 shall be deemed to affect any rights of the holders of any series of Preferred Stock to remove Directors pursuant to any applicable provisions of the Certificate of Incorporation.

3.7 Vacancies . Subject to the rights, if any, of any series of Preferred Stock then outstanding, and except as otherwise provided in the Certificate of Incorporation, any vacancy, whether arising through death, resignation, retirement, removal or disqualification of a Director, and any newly created directorship resulting from an increase in the number of Directors, shall be filled solely by a majority vote of the remaining Directors even though less than a quorum of the Board of Directors. A Director so elected to fill a vacancy or newly created directorship shall serve until the next annual meeting of the stockholders, or until his or her successor shall have been duly elected and qualified or until such Director’s death, resignation or removal. No decrease in the number of Directors shall shorten the term of any incumbent director.

3.8 Place of Meetings . Any meetings of the Board of Directors may be held either within or without the State of Delaware.

3.9 Regular Meetings . Regular meetings of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by the Board of Directors, provided that any Director who is absent when such determination is made shall be given notice of the determination.

3.10 Special Meetings and Notice . Special meetings of the Board of Directors may be called by the Chairman of the Board, the Chief Executive Officer, or any two Directors, and shall be held at such time and place as may be specified by the officer or Directors calling the meeting. Unless otherwise required by law or the Certificate of Incorporation, notice stating the date, time and place of the meeting shall be given to each Director either by prepaid mail to such Director’s address appearing on the books of the Corporation not less than forty-eight (48) hours before the date of the meeting, or personally or by telegram, facsimile, electronic transmission or similar means of communication not less than twenty-four (24) hours before the date of the special meeting.

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3.11 Meetings by Telephone Conference Call . Unless otherwise required by law or the Certificate of Incorporation, members of the Board of Directors may participate in a meeting of the Board of Directors by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

3.12 Quorum and Adjournment . Unless otherwise required by law or the Certificate of Incorporation, at all meetings of the Board of Directors, the presence of majority of the Whole Board of Directors shall constitute a quorum for the transaction of business (except for the filling of vacancies, which shall be governed by the provisions of Section 3.7). Any meeting of the Board of Directors, or a committee thereof, whether or not a quorum is present, may be adjourned to another time and place by the affirmative vote of a majority of the Directors present. If the meeting is adjourned for more than 24 hours, notice of such adjournment to another time or place shall be given prior to the time of the adjourned meeting to the Directors who were not present at the time of the adjournment.

3.13 Action at Meetings . Unless otherwise required by law or the Certificate of Incorporation, if a quorum is present at any meeting of the Board of Directors, the vote of a majority of the Directors present shall be sufficient to take any action. A meeting at which a quorum is initially present may continue, and Directors may transact business, notwithstanding withdrawal of Directors, if any action taken is approved by at least a majority of the number of Directors constituting a quorum for such meeting.

3.14 Action in Lieu of Meetings . Unless otherwise required by law or the Certificate of Incorporation, any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, if all Directors consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board of Directors. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

3.15 Committees . The Board of Directors may, by resolution passed by a majority of the Whole Board of Directors, designate one or more committees, each committee to consist of one or more of the Directors of the Corporation. The Board of Directors may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of any such committee. In the absence or disqualification of a member of a committee, and in the absence of a designation by the Board of Directors of an alternate member to replace the absent or disqualified member, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may (subject to the committee charter, if any) unanimously appoint another member of the Board of Directors to act at the meeting in the place of any absent or disqualified member. Any committee, to the extent permitted by law and to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it. Each committee shall keep regular minutes and report to the Board of Directors when required.

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3.16 Meetings and Action of Committees . Meetings and action of committees shall be governed by and held and taken in accordance with the provisions of Sections 3.8 to 3.14, with such changes in the context thereof as are necessary to substitute the committee and its members for the Board of Directors and its members.

3.17 Compensation . Unless otherwise required by law or the Certificate of Incorporation, Directors shall be entitled to receive such fees and expenses, if any, for attendance at meetings of the Board of Directors, and/or such fixed salaries for services as Directors, as may be fixed from time to time by resolution of the Board of Directors. Nothing herein contained shall be construed to preclude any Director from serving the Corporation in any other capacity as an officer, committee member, agent or otherwise, and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.

3.18 Chairman of the Board and Vice Chairman of the Board; Secretary . The Board of Directors shall appoint a Chairman of the Board and may appoint a Vice Chairman of the Board, in its discretion, from among its members. The Chairman of the Board shall preside at all meetings of stockholders and of the Board of Directors. If the Board of Directors appoints a Vice Chairman of the Board, in the absence or disability of the Chairman of the Board, the Vice Chairman of the Board shall preside at all meetings of stockholders and of the Board of Directors. The Corporate Secretary or an Assistant Corporate Secretary of the Corporation shall act as secretary at all meetings of the Board of Directors, but in their absence, a secretary designated by the Chairman of the meeting shall act as secretary of the meeting of the Board.

ARTICLE IV

OFFICERS

4.1 Designation , Term and Vacancies. The officers of the Corporation shall be a Chief Executive Officer, a President, a Chief Operating Officer, one or more Vice Presidents, a Corporate Secretary and a Chief Financial Officer and/or Treasurer, all of whom shall be elected by the Board of Directors. The Board of Directors may elect one or more Executive Vice Presidents, Senior Vice Presidents, or Assistant Vice Presidents, who shall have such authority and shall perform such duties as may from time to time be prescribed by the Board of Directors. The Board of Directors may appoint one or more Assistant Corporate Secretaries and one or more Assistant Treasurers, and such other officers as may be deemed necessary, who shall have such authority and shall perform such duties as may from time to time be prescribed by the Board of Directors. Vacancies occurring among the officers of the Corporation shall be filled by the Board of Directors. Subject to Section 4.2 of this Article 4, officers elected by the Board of Directors shall hold office until the next annual election of such officers by the Directors and until their successors are elected and qualified or until such officer’s death, resignation or removal. All other officers, agents and employees shall hold office during the pleasure of the Board of Directors or the officer appointing them. Any two or more offices may be held by the same person, with the exception that the Chief Executive Officer and President shall not also hold the office of Corporate Secretary or the office of Chief Financial Officer and/or Treasurer.

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4.2 Resignation and Removal of Officers . Any officer may resign at any time upon written notice to the Corporation, without prejudice to the rights, if any, of the Corporation under any contract to which such officer is a party. Such resignation shall be effective upon its receipt by the Chairman of the Board, the Chief Executive Officer, the President, the Corporate Secretary or the Board of Directors, unless a different time is specified in the notice for effectiveness of such resignation. The acceptance of any such resignation shall not be necessary to make it effective unless otherwise specified in such notice. Any officer may be removed from office at any time, with or without cause, but subject to the rights, if any, of such officer under any contract of employment, by the Board of Directors or by any committee to whom such power of removal has been duly delegated, or, with regard to any officer who has been appointed by the Chief Executive Officer pursuant to Section 4.3 below, by the Chief Executive Officer or any other officer upon whom such power of removal may be conferred by the Board of Directors. A vacancy occurring in any office for any cause may be filled by the Board of Directors, in the manner prescribed by this Article 4 of the Bylaws for initial appointment to such office.

4.3 Chief Executive Officer . The Chief Executive Officer shall be chosen from among the members of the Board of Directors and, subject to the control and direction of the Board of Directors, shall have general charge of the affairs and business of the Corporation and general charge and supervision of all the officers, agents, and employees of the Corporation. He or she shall exercise all powers and perform all duties incident to the principal executive office of the Corporation, subject to the control and direction of the Board of Directors, and such other powers and duties as may from time to time be assigned to him by the Board of Directors or be prescribed by these Bylaws. Also in the absence or inability of the Chairman to act, he or she shall preside at all meetings of stockholders. He or she may sign and execute in the name of the Corporation all deeds, mortgages, bonds, contracts, powers of attorney, or other instruments authorized by the Board of Directors, except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation, and he or she may, without previous authority of the Board of Directors, make, in the name of the Corporation, such contracts, leases, and other agreements as the ordinary conduct of the Corporation’s business requires. He or she may sign and endorse notes, drafts, and checks. He or she shall have power to select and appoint all necessary officers and servants, except those elected or appointed or required to be elected or appointed by the Board of Directors, and he or she shall also have power to remove all such officers and servants and to make appointments to fill the vacancies. He or she may delegate any of his powers to the President or the Chief Operating Officer of the Corporation.

4.4 President . The President shall perform all acts incident to the office of President, subject to the control and direction of the Board of Directors, and such other powers and duties as may from time to time be assigned to him by the Board of Directors or be prescribed by these Bylaws. In the absence or inability of the Chief Executive Officer to act, he or she shall be the Chief Executive Officer of the Corporation.

4.5 Chief Operating Officer . The Chief Operating Officer of the Corporation shall have general and active management of and exercise general supervision over the business and property of the Corporation, subject to the control and direction of the Board of Directors, and such other powers and duties as may from time to time be assigned to him by the Board of Directors or be prescribed by these Bylaws. He or she may delegate any of his powers to any Vice President of the Corporation. In the absence or disability of the President, the Chief Operating Officer shall exercise the powers and perform the duties of the President.

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4.6 Vice Presidents . Each Vice President shall exercise such powers and perform such duties as may from time to time be assigned to him by the Board of Directors, the Chief Executive Officer, the President or the Chief Operating Officer.

4.7 Chief Financial Officer or Treasurer . The Chief Financial Officer or Treasurer shall perform all acts incident to the office of Chief Financial Officer or Treasurer, subject to the control and direction of the Board of Directors, and such other powers and duties as may from time to time be assigned to him by the Board of Directors or be prescribed by these Bylaws. He or she shall have custody of such funds and securities of the Corporation as may come to his hands or be committed to his care by the Board of Directors. When necessary or proper, he or she shall endorse on behalf of the Corporation, for collection, checks, notes, or other obligations, and shall deposit the same to the credit of the Corporation, in such bank or banks or depositories as the Board of Directors, the Chief Executive Officer, the President, or the Chief Operating Officer may designate. He or she may sign receipts or vouchers for payments made to the Corporation, and the Board of Directors may require that such receipts or vouchers shall also be signed by some other officer to be designated by them. Whenever required by the Board of Directors, he or she shall render a statement of his cash accounts and such other statements respecting the affairs of the Corporation as may be requested. He or she shall keep proper and accurate accounts of receipts and disbursements and other matters pertaining to his office. In the discretion of the Board of Directors, he or she may be required to give a bond in such amount and containing such conditions as the Board of Directors may approve, and such bond may be the undertaking of a surety company, and the premium therefor may be paid by the Corporation.

4.8 Corporate Secretary . The Corporate Secretary shall perform all acts incident to the office of Secretary, subject to the control and direction of the Board of Directors, and such other powers and duties as may from time to time be assigned to him by the Board of Directors or be prescribed by these Bylaws. He or she shall record the votes and proceedings of the stockholders and of the Board of Directors in a book or books kept for that purpose, and shall attend all meetings of the Directors and stockholders. He or she shall keep in safe custody the seal of the Corporation, and, when required by the Board of Directors, or when any instrument shall have been signed by the Chief Executive Officer, the President, the Chief Operating Officer, or any other officer duly authorized to sign the same, or when necessary to attest any proceedings of the stockholders or Directors, shall affix it to any instrument requiring the same, and shall attest the same with his signature. Except as otherwise required by the Certificate of Incorporation or these Bylaws, he or she shall attend to the giving and serving of notices of meetings. He or she shall have charge of such books and papers as properly belong to his office or as may be committed to his care by the Board of Directors. Except as otherwise required by the Certificate of Incorporation or these Bylaws, in the absence of the Corporate Secretary, or an Assistant Corporate Secretary, from any meeting of the Board of Directors, the proceedings of such meeting shall be recorded by such other person as may be appointed at the meeting for that purpose.

4.9 Assistant Vice President . Each Assistant Vice President shall exercise such powers and perform such duties as may be assigned to him by the Board of Directors.

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4.10 Assistant Corporate Secretary . Each Assistant Corporate Secretary shall be vested with the same powers and duties as the Corporate Secretary, and any act may be done or duty performed by an Assistant Corporate Secretary with like effect as though done or performed by the Corporate Secretary. He or she shall have such other powers and perform such other duties as may be assigned to him by the Board of Directors.

4.11 Other Officers . Such other officers as the Board of Directors may appoint shall perform such duties and have such powers as may from time to time be assigned by the Board of Directors. The Board of Directors may delegate to the Chief Executive Officer the power to choose such other officers and to prescribe their respective duties and powers.

ARTICLE V

INDEMNIFICATION

5.1 Right to Indemnification . To the fullest extent permitted by law, the Corporation shall indemnify and hold harmless any person who was or is made or is threatened to be made a party or is otherwise involved in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”) by reason of the fact that such person, or the person for whom he is the legally representative, is or was a Director or officer of the Corporation or is or was serving at the request of the Corporation as a director or officer of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans (any such person, a “Section 5.1 Indemnitee”), against all liabilities, losses, expenses (including attorney’s fees), judgments, fines and amounts paid in settlement (“expenses”) actually and reasonably incurred by such person in connection with such proceeding; provided , however , that except as otherwise provided in Section 5.4, the Corporation shall only be required to indemnify a person in connection with a proceeding (or part thereof) initiated by such person if the commencement of such proceeding (or part thereof) was authorized by the Board of Directors.

5.2 Prepayment of Expenses . The Corporation shall pay the expenses incurred by a Section 5.1 Indemnitee in defending any proceeding in advance of its final disposition, provided that, to the extent required by law, the payment of expenses in advance of the final disposition of the proceeding shall be made only upon receipt of an undertaking by such person to repay all amounts advanced if it should be ultimately determined that such person is not entitled to be indemnified under this Article or otherwise. The Corporation may pay the expenses incurred by any other person in defending any proceeding in advance of its final disposition upon such terms and conditions as the Board of Directors deems appropriate.

5.3 Claims . If a claim for indemnification or advancement of expenses under Section 5.1 or Section 5.2 is not paid in full within sixty (60) days after a written claim therefor by a Section 5.1 Indemnitee has been received by the Corporation, such Section 5.1 Indemnitee may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense of prosecuting such claim. In any such action, the Corporation shall have the burden of proving that such Section 5.1 Indemnitee is not entitled to the requested indemnification or advancement of expenses under applicable law.

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5.4 Repeal or Modification . Any repeal or modification of the provisions of this Article or applicable law shall not adversely affect any right or protection hereunder of any person in respect of any act or omission occurring before the time of such repeal or modification regardless of whether the proceeding is brought or threatened before or after the time of such repeal or modification.

5.5 Non−Exclusivity of Rights . The right to indemnification and advancement of expenses conferred on any person by this Article shall not be exclusive of any other rights such person may have or acquire under any other provision hereof, the Bylaws or by law, agreement, vote of stockholders or disinterested Directors or otherwise.

5.6 Survival of Rights . The right to indemnification and prepayment of expenses conferred on any person by this Article shall continue as to a person who has ceased to be a Director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such person.

5.7 Insurance . The Corporation may purchase and maintain insurance on behalf of any person who is or was a Director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, against any liability or expenses incurred by such person in connection with a proceeding, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this Article or by law.

5.8 Other Sources . The Corporation's obligation, if any, to indemnify or advance expenses to any Section 5.1 Indemnitee who was or is serving at the Corporation's request as a director or officer of another corporation or a partnership, joint venture, trust, enterprise or nonprofit entity, including service with respect to employee benefit plans, shall be reduced by any amount such Section 5.1 Indemnitee may collect as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, enterprise or nonprofit entity.

5.9 Other Indemnification and Advancement of Expenses . This Article 5 shall not limit the right of the Corporation, to the extent and in the manner permitted by law, to indemnify and to advance expenses to persons other than Section 5.1 Indemnitees when and as authorized by appropriate corporate action.

ARTICLE VI

STOCK

6.1 Stock Certificates . Every holder of capital stock shall be entitled to have a certificate representing such stock in such form as shall be approved by the Board of Directors, signed by or in the name of the Corporation by (a) the President or a Vice President, and (b) the Corporate Secretary or an Assistant Corporate Secretary or Treasurer or Assistant Treasurer. Any or all the signatures on the certificate may be a facsimile. In case any officer, transfer agent, transfer clerk or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent, transfer clerk or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent, transfer clerk or registrar at the date of issue.

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6.2 Lost, Stolen or Destroyed Certificates . The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the Board of Directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates or such person’s legal representative to give the Corporation a bond in such sum as it may direct as indemnity against any claim that may be made against the Corporation on account of the alleged loss, theft or destruction of any such Certificate or the issuance of such new Certificate.

ARTICLE VII

MISCELLANEOUS

7.1 Fiscal Year . The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.

7.2 Seal . The corporate seal shall have the name of the Corporation inscribed thereon and shall be in such form as may be approved from time to time by the Board of Directors.

7.3 Execution of Checks, etc . The funds of the Corporation shall be deposited in such banks or trust companies as the Board of Directors from time to time shall designate and shall be withdrawn only on checks or drafts of the Corporation for the purposes of the Corporation. All checks, drafts, notes, acceptances and endorsements of the Corporation shall be signed in such manner and by such officer or officers or such individual or individuals as the Board of Directors from time to time by resolution shall determine. If and to the extent so authorized by the Board of Directors, such signature or signatures may be facsimile. Only checks, drafts, notes, acceptances and endorsements signed in accordance with such resolution or resolutions shall be the valid checks, drafts, notes, acceptances or endorsements of the Corporation.

7.4 Evidence of Authority . A certificate by the Corporate Secretary or an Assistant Corporate Secretary as to any action taken by the stockholders, the Board of Directors, a committee or any officer or representative of the Corporation shall as to all persons who rely on the certificate in good faith be conclusive evidence of such action.

7.5 Severability . Any determination that any provision of these Bylaws is for any reason inapplicable, illegal or ineffective shall not affect or invalidate any other provision of these Bylaws.

ARTICLE VIII

AMENDMENTS

8.1 Creation, Amendment and Repeal of Bylaws . In furtherance and not in limitation of the powers conferred upon it by the laws of the State of Delaware, the Board of Directors shall have the power to adopt, alter, amend or repeal the Bylaws of the Corporation.

SEPARATION AGREEMENT AND GENERAL RELEASE OF CLAIMS

This Separation Agreement and General Release of Claims (this “Agreement”) is made by and between Byron A. Dunn (“EMPLOYEE”) and CAMAC Energy Inc. (“COMPANY”) effective as of April 11, 2011 (the “Effective Date”).

1. Whereas, EMPLOYEE and COMPANY entered into an employment agreement effective September 21, 2010 (the “Employment Agreement”); and

2. Whereas, EMPLOYEE is resigning his employment from the COMPANY and from his position on the Board of the COMPANY effective as of the Effective Date; and

3. Whereas, EMPLOYEE and COMPANY desire to clarify EMPLOYEE’s obligations with respect to any trade secrets and/or proprietary and confidential information acquired during EMPLOYEE’s employment; and

4. Whereas, EMPLOYEE desires to release any claims or causes of action EMPLOYEE may have against the COMPANY, including without limitation those that may have arisen from EMPLOYEE’s employment or the end of EMPLOYEE’s employment with the COMPANY; and

5. Whereas, COMPANY desires to release any claims or causes of action COMPANY may have against EMPLOYEE.

Now, therefore, for and in consideration of the mutual covenants and promises hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, EMPLOYEE and the COMPANY hereby agree:

Section 1. Severance and Other Benefits . The COMPANY, in exchange for the promises of EMPLOYEE contained below, agrees as follows:

A. COMPANY agrees to pay EMPLOYEE the total amount of $600,000.00 less any legally required deductions and withholdings. This amount will be paid in two separate installments. A first payment of $400,000.00, minus any applicable deductions and withholdings, will be made on the first business day following the expiration of the EMPLOYEE’s revocation option set forth in Section 5(C) below. A second payment of $200,000.00, minus applicable deductions and withholdings, will made within ninety (90) days after the Effective Date.

B. During the portion, if any, of the eighteen-month period following the Effective Date that EMPLOYEE elects to continue coverage for EMPLOYEE and EMPLOYEE’s eligible dependents under the COMPANY’s group health and dental plans under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) and/or Sections 601 through 608 of the Employee Retirement Income Security Act of 1974, as amended, the COMPANY shall reimburse Executive on a monthly basis for the premium costs paid by EMPLOYEE in order to continue such health and/or dental coverage (the “COBRA Reimbursement”). The COMPANY shall provide the COBRA reimbursement within five days after EMPLOYEE submits documentation to the COMPANY evidencing his monthly payments to elect applicable continuation coverage; provided, however, that EMPLOYEE must submit such documentation within (30) days of his applicable payments, and provided further that the COMPANY shall have no obligation to make the COBRA Reimbursements described above as of the date that EMPLOYEE becomes eligible to participate in another entity’s health and/or dental insurance coverage, as applicable (which such eligibility shall be promptly reported by EMPLOYEE to the COMPANY).

C. Upon expiration of the EMPLOYEE’s revocation option set forth in Section 5(C), the 250,000 shares of restricted stock issued to EMPLOYEE pursuant to Section 3(d)(i) of the Employment Agreement and issued in accordance with the COMPANY’s 2009 Equity Incentive Plan (the “Plan”) shall become fully vested pursuant to the terms of the Plan, and all restrictions relating to such shares under the Plan shall be released. Within five business days thereafter, COMPANY shall deliver to EMPLOYEE a certificate evidencing such shares free and clear of any restriction upon transfer; provided, however, that such shares shall continue to be subject to the transfer restrictions and reporting requirements set forth in Section 16 of the Securities Exchange Act of 1934, and any other state or federal laws applicable to the transfer of securities.

D. COMPANY acknowledges and agrees that EMPLOYEE shall remain covered by COMPANY’S Directors and Officers Errors and Omissions Liability Insurance (the “Insurance Policy”) to the extent applicable under that Insurance Policy with regard to legal proceedings EMPLOYEE may become a party to that relate to matters occurring during the time when EMPLOYEE was employed by the COMPANY.

	For the COMPANY: 1330 Post Oak Blvd., Suite 2575 Houston, Texas 77056 Attn: Chief Executive Officer With a copy to the General Counsel

	For the EMPLOYEE: Byron Dunn c/o Chris C. Pappas Kane Russell Coleman & Logan PC 919 Milam Street, Suite 2200 Houston, Texas 77002

By:	/s/ Kase Lawal	April 11, 2011
	Kase Lawal	DATE
	Chairman of the Board CAMAC Energy, Inc.

Date: May 3, 2011	By:	/s/ Dr. Kase Lukman Lawal
		Dr. Kase Lukman Lawal
		Chief Executive Officer
		(Principal Executive Officer)