Monday, January 10, 2005

ExxonMobil PSC Signing Delayed, JDA Tells Markvo10

The much-anticipated and much-delayed signing of the Production Sharing Contract that would finalize the award of Block 1 in the Nigeria-Sao Tome Joint Development Zone has been delayed again, an unidentified official told markvo10, according to his latest post on the Raging Bull ERHC board ths morning.

Meanwhile, trading opened with a total of 88,000 shares going through at prices between .475 and .485 in the first minute. The flow of orders soon reversed, however, and it appeared that much of the first order was later sold at .475.

If the PSC information is true, it may be yet another crushing blow to the credibility of Barry Morgan, the prize-winning UpstreamOnline writer who reported Friday that high-ranking JDA officials had told him that the PSC would be signed today. It is past 2pm in Abuja, Nigeria, where the PSC would be signed.

One RB poster this morning mistakenly blamed a "JDA press release" for misinforming investors about today's hoped-for signing. That information did not come from the JDZ, however, but from Morgan and the echo chamber of the message board itself.

Markvo10 said an official whose name he could not make out told him the awards would occur towards the end of the month. Here is the full text of his report:

Just spoke to someone at the JDA.

I could not understand his name. He said that Block 1 PSC will not be signed today. He said that there was a meeting scheduled to start tomorrow and run for a few days. I asked him about block awards and he said that they would most likely be annouced by end of the month.

Morgan has reported numerous times that his sources have told him that various bids, rounds, awards and signings would likely occur in a given time frame that has not been realizesd. As a result, "Two more weeks" has become a jaundiced rallying cry for supporters and skeptics of the stock.

Meanwhile, there is no sign of the Dow Jones News Service story that at last report had been delayed by ERHC, which was asked to respond to questions by reporter Norval Scott. The company is equally famous for its non-responsive public relations as for frequent disappointments concerning material events like the PSC, which does not directly affect ERHC but was taken as evidence that the latest JDZ round would move forward as indicated by the Joint Development Authority.

After recently buying into the stock, markvo10 has taken the lead on a number of key events, including the Norval Scott interview and this ExxonMobil delay. Today's message is one of several notable posts ERHC On The Move has reported to our readers.

The Joint Development Authority (JDA), the creation of the two licensor nations, has not issued a press release since November nor explained why the Dec. 31 date for announcement of awards given by Presidential Advisor on energy matters Dr. Edmund Daukoru in a speech at the Nov. 15 opening of the second round in Abuja has not been met.

There is broad understanding that ExxonMobil has delayed the process in an effort to "farm out" its two 25 percent entitlements in any two of the five blocks on offer.

However, this reporter has opined several times that it is unlikely the PSC will ever be signed. ExxonMobil is understood to want to back out of its initial bid and abandon its prospects in the hapless Joint Development Zone altogether, partly out of a reluctance to do business with ERHC's Nigerian owner, Sir Emeka Offor. Offor is a powerful political and business figure in the country.

Offor nailed down key preferential rights in many blocks and under an agreement ratified in a treaty between the two nations does not have to pay a signature bonus for them - if they are ever awarded. ExxonMobil is paying dearly for the same kinds of rights.

With ExxonMobil (CVX) and Energy Equity Resources (EER), ChevronTexaco is slated to be operator after their winning bid of $123 million for Block 1. That bid won at the end of the first licensing round last October.

The first round of bidding had been expected to encompass all nine blocks, but JDA officials found the bids and most of the bidders unsatisfactory or incompetent, and are now looking at least three rounds to award all nine blocks in the JDZ and a fourth round to award Sao Tome's EEZ, four companion blocks owned only by that impoverished island nation.

Echoing the disappointment but tough resilience of many ERHC investors, investor dcre1 quipped:

Remember the quote from the movie: "This is Chinatown"? Well, "This is Africa."

Actually, the quote was, "C'mon Jake... It's Chinatown."

Updated 10:29am EST.

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