Calvetti Ferguson

CAMAC International

Consolidation is Key — How CF&W Helped CAMAC International Integrate its Oil and Gas Assets

Complex accounting and the consolidation of multiple entities can be daunting, arduous tasks for a corporation — tasks that are compounded when the entities in question are overseas and subject to international regulations.

CAMAC International Ltd., a global energy company involved in the exploration, development and operation of oil properties in Africa and South America, discovered the complexity of these functions firsthand. CAMAC was conducting an increased number of complex transactions, and looking to consolidate its growing number of international entities in accordance with federal auditing requirements. In 2009, the company engaged Calvetti, Ferguson & Wagner (“CF&W”) to perform audits of its overseas oil properties and international transactions.

“We chose CF&W to lead this critical facet of our accounting function because of the firm’s extensive expertise in international accounting,” said Kamoru Lawal, CEO and President of CAMAC International. “The firm’s prior experience with companies in both the multinational and energy sectors was crucial in leading us through the consolidation process.”

CF&W began by determining the value of the company’s international assets, which had previously been transferred to other entities within the company. After evaluating the relationships between the transferring and receiving entities, CF&W developed a comprehensive approach to account for the value of the assets, which also outlined the ownership and legal control of the various entities.

CF&W’s next step focused on the process for consolidating the entities, including understanding the rules and regulations behind the consolidation and how the creation of a new, umbrella entity could impact the company’s financials. CF&W created a parent-child process for consolidating each entity, which simplified the auditing process and potential burden at each entity.

Another critical facet of the audit process focused on the financial reporting previously performed by CAMAC’s Nigeria-based auditor. Because the accounting standards of the United States and Nigeria differ, CF&W first evaluated the auditor’s work in order to satisfy U.S. auditing requirements and to confirm that the company’s financials followed the Generally Accepted Accounting Principles (GAAP) of the U.S.

CF&W made several adjustments to the auditor’s work to account for the growing number of oil properties owned by the company, focusing on establishing compliance with U.S. regulations.

Ultimately, CF&W completed the successful consolidation of eight CAMAC entities and developed a set of best practices that saved several valuable man-weeks of time. After developing an improved, cost-effective approach to auditing foreign companies, CF&W was able to resolve CAMAC’s financial issues earlier, more efficiently and with fewer dollars overall in the years that followed.

Calvetti, Ferguson & Wagner is a Houston-based CPA firm focused on mid-market energy, healthcare and multinational companies. To learn more, visit www.cfw-cpa.com or call (713) 957-2300.