Thursday, June 30, 2005

Who's Gaming ERHE? Numbers Speak For Themselves



Trading Updates: Death Of A Thousand Cuts; I-Hub Overtakes Raging Bull; Nigeria Gets Debt Relief

The cent-by-cent erosion of the share price of ERHC Energy (OTC BB symbol: ERHE) has been as painful for many investors as the famous Chinese execution technique called "death by a thousand cuts." That practice ended in 1905, but 100 years later it's still being practiced in the stock market, which for the past month has been torturing investors in ERHE.

How much longer will it go on? Well, since the market appears to have entirely discounted the May 31 award of goodly chunks of five oil-rich blocks in the Gulf of Guinea, and more recently ignored the formal acceptance of those awards, there's appears to be little reason the slicing can't continue for a long, long time.

We have to presume that the analysts and researchers know almost as much as we do about ERHC's prospects, and that they aren't trying to stay the executioner's hand by accumulating.

Nor are they issuing reports and recommendations, despite the front-page headlines that heralded our prospects before the awards were announced. Almost all of those earlier stories discounted the possibility that we would win operatorships, and now that we have, they are not also trumpeting that victory. In short, we are getting no support - moral, technical or otherwise - except from the handful of investors like myself who have seen these dramatic swings before and elect not to sell no matter what. Our partners are not issuing press releases as we had hoped on the acceptance of the awards, so we will not get a boost from their coattails.

Then there is the problem of the naivete of some investors and the cynicism of others on Raging Bull, Elephant Fields and (albeit less so) InvestorsHub who gull the former into believing they are anything more than day traders who play ERHE every day for all the nickels and dimes they can carry away.

It is not inconceivable that they will play this game back down to the $0.28 range or (inconceivably) even lower, I'm sorry to say. How long will it take? Looking back over the performance of ERHE since I invested in May 2003, it is typically a matter of a couple of months, so we may have yet another month to go before any upturn begins in earnest.

I am hoping that I can add another 100,000 shares somewhere in the $0.30 to $0.40 range. The opportunities in the sub-$0.30 range are typically very limited and work as quasi loss-leaders for market makers. Once it gets to the bottom, which could be as low as $0.22, ERHE will turn upwards very suddenly and dramatically.

Just the same, we shouldn't expect a very substantial recovery except in terms of percentages from such prices. The best we can hope for in a post-decline upturn is about $0.25, to $0.54 or so. After that, it will be a long, hard two-year slog to real money - $2 to $3 or more.

In the event a buyout of the kind we predicted for last March does occur - and as we noted recently, our favored poster mutwadadi says rumors about one are ciruclating in Nigeria - most investors will not share in the largesse, as the buyers will have accumulated all through this downturn and only need a small number of shares to gain control whenever a buyout might be announced. But the whole idea of a buyout is speculative in the extreme, as mutwadadi cautioned, since the market apparently feels our prospects are close to nil.

Update, 4:55pm EDT, 6/30/05: We closed at $0.435, with volume of 720,587. The day's "cut" was $0.0080.

Update, 3:58pm EDT, 6/30/05: The price is $0.435, yet another little slice, with the Bid and Ask $0.426 x $0.435 and volume of 719,587 shares.

Update, 2:15pm EDT, 6/30/05: We're at $0.425, a cent below my cost average, signaling my own buying opportunity. I hope I can take advantage of it soon. Volume is 596,186, and the Bid and Ask are $0.425 x $0.43.

Update, 2:15pm EDT, 6/30/05: We did bounce off $0.425. the current Bid, and are back at the Ask of $0.43. Volume is 566,329 shares. We may see some improvement as a result of the BBC news on Nigerian debt relief, posted by rancho on I-Hub.

Update, 2:15pm EDT, 6/30/05: Nigeria has won some $18 billion in debt relief from the Paris Vlub of 19 lender countries, reducing its $35 billion foreign debt by half after paying down $8 billion more, the BBC reported. That is great news for investors, as it dramatically reduces the pressure on Nigeria to raise royalty and tax requirements in Joint Development Zone deals. Here is the BBC story:

Nigeria to get $18bn debt relief

The Paris club has said there will be significant Nigerian debt relief

The Paris Club of creditor countries has agreed the outline of a debt relief package for Nigeria. About $18bn (£10bn) of debt will be written off and Nigeria plans to buy back a chunk of outstanding loans.

The country owes the rest of the world $35bn, and the new talks are linked to an agreement between Nigeria and the IMF on debt repayments.

Nigeria is the world's seventh-largest oil exporter and Africa's most populous nation, but also one of its poorest.

The Paris Club have agreed in principle a further debt write-off.

About $31bn of Nigeria's debt is owed to members of the 19-nation-strong Paris Club. It has not received any fresh loans since 1992, but repaid $8bn debt since then.

Part of Nigeria's case in asking for debt relief has been that most of the money it received was lent to corrupt military dictators, a fact the African country says was well known by foreign banks and governments.

The UK's Chancellor of the Exchequer, Gordon Brown, said the debt relief combined with the debt buy-back would "mean there is 100% debt relief for Nigeria possible over the next six months".

The UK is Nigeria's biggest creditor and has been attempting to persuade other G8 creditors of the need for debt write-off.

'Economic reform'

The debt breakthrough came after Nigeria expressed its willingness to clinch a new deal with the IMF to pay its arrears to Paris Club creditors.

"The representatives of the Paris Club creditor countries... expressed their readiness, consistent with their national laws and regulations, to enter into negotiations with the Nigerian authorities in the months to come on a comprehensive debt treatment," said the group of creditor nations.

"They took note of the economic reform programme implemented by the Nigerian authorities since 2003 and of their willingness to take advantage of exceptional revenues in order to finance an exit treatment from the Paris Club."

It said the debt relief would be significant, and allow for long-term debt sustainability.

The initial debt relief terms will be based on the so-called "Naples terms" - which are equivalent to a 67% reduction on the face value of debt and are applied to debts of poorest nations.

'Major development'

"As an initial negotiating position, it is welcome, but Nigeria will naturally press for a higher discount," said Nigerian senator Udo Udoma.

"It is a major development because about a year ago they (Paris Club) were not willing to listen to any plea for debt relief.

"To move from zero to 67% within a year is a major development, I am excited by that."

Campaign group Actionaid welcomed the deal, saying that "Nigerians have been paying out in debt repayments nearly six times the amount they receive in aid."

"As home to one in five Africans, progress on debt in Nigeria is critical to progress on poverty in Africa," the organisation said.

And international development minister Hilary Benn said: "This deal will help to change the lives of millions of people in Nigeria.

"Today's deal is a major step in bringing a better future for the people of Nigeria, in a country in which seven million children receive no schooling at all and one in five die before their fifth birthday."

Update, 1:45 EDT, 6/30/05: The price is $0.43 as volume tops 549,391. The Bid is $0.425 and the Ask $0.43.

Update, 11:54am EDT, 6/30/05: A couple of years ago we watched in awe at MDDM took off from $0.25 or so and soared nearly a buck on news about its ShockRounds product, a bullet that requires no wires like Tasers do to deliver an incapacitating but non-deadly electric shock to the target. I was delighted to see it climbing 35 percent or $0.48 today on volume of 128,869 shares. That's because I have 4,000 shares of its parent, Austrlian holding company HGRLF.

Update, 11:49 EDT, 6/30/05: Volume has doubled in the past hour to a still-low 404,126 shares, and the price is $0.435, still $0.003 off the open. The Bid is $0.435 and the Ask $0.44. Lots of unenlightening talk on I-Hub about ERHC Energy's offices in Houston, where the staff was recently described as "two retards in a trailer." Actually, we have two retards in a very nice office. Just kidding. But it's taken up lots of time and space on I-Hub, but that appears to be over now.

Update, 11:04am EDT, 6/30/05: Our streaming Level II quotes service stopped sometime between 10:17 and 11am, as volume more than doubled to a still-abysmal 189,085 and the price fell to $0.435 and now to $0.43, the Bid. The Ask is $0.435.

Update, 10:42am EDT, 6/30/05: Just 4,000 shares have traded in the past 40 mimnutes, and the price is unchanged at $0.44, the Bid. The Ask is $0.448, and volume now is 85,005.

Update, 10:17am EDT, 6/30/05: Breaking News: Raging Bull Is Dead. At least I think it's important: the InvestorsHub Website, which has the downside of being censored by its barely literate moderators, has finally overtaken Raging Bull's ERHE message board as the leading message board on ERHE. Between midnight and 10am EDT today, there were just 15 posts on Raging Bull compared to 26 on InvestorsHub. That compares to about 300 readers in the same time frame for this blog.

Update, 10am EDT, 6/30/05: The price is $0.44, off a tiny slice from the opening $0.443, on tepid volume of 81,005 shares.

Wednesday, June 29, 2005

Trading Updates: ERHC Is In Deep Water

Ignored as the price of oil soared, ERHC Energy is watching its share price fall as oil falls on new that the OPEC quota will be expanded for a second time this month, this time by 1,1 million barrels of crude per day.

For ERHC On The Move our portfolio of 120,000 shares purchased at an average of $0.4374 that a month ago was enjoying a $50,000 gain is now not enjoying a $1,300 loss.

Update, 4:09pm EDT, 6/29/05: We closed, sadly, at $0.443, off $0.007 from Tuesday's close, on volume of 1,043,600. The Buy/Sell margin was cut from about 115,000 in the last half hour to about 60,000, but it made little difference except to keep it from falling further. This may be the last day ERHC On The Move closes in the green (we're up $248) for a while, we think. Instead of heading toward a dollar, we seem to be heading toward $0.28 or so. It makes absolutely no sense, but if that's what a seller wants for his shares, it's fine with me.

Update, 3:23pm EDT, 6/29/05: ERHE is coming back at the Surge toward yesterday's miserable close of $45; we're at $0.45, the Bid is $0.445, with the Ask at $0.45, on volume of 852,165 shares. We're hoping for at least a $0.45 close. The Buy/Sell ratio remains largely unchanged as of 15 minutes ago, but a lot of shares have traded since then, and ERHC On The Move is back in the green again. Tough way to make a thousand bucks!

Update, 1:58pm EDT, 6/29/05: We're at $0.44 now, the Ask, with the Bid still at $0.431. Volume has been moving steadily upwards in the past hour, and is at 735,946 shares. There have been 274,679 Buys and 398,888 Sells in 114 trades as of 1:46pm, according to ADVFN's 15-minute delay.
. We could get discovered any minute now. Buying kicked in at $0.435.

Update, 12:58pm EDT, 6/29/05: With 621,246 shares traded we stand at $0.431, which is both the Bid and the Ask and has been for at least 15 minutes. Over on InvestorsHub, tempers are wearing thin. Here's one poster, Alsoer: "fact is that the management is not able to handle this in a Professional manner.and i doubt they ever will be. take a look at the US. office. its a disgrace, 2 retards in a trailer is not gonna help us in the future."
Update, 10:44am EDT, 6/29/05: The price is now $0.43, the Bid, on 400,349 shares of volume. The Ask is $0.435. Pumpers on Raging Bull are so depressed they're jumping off exclamation points.

Monday, June 27, 2005

Trading Updates: A Convergence Of Trends

About 15 days ago, I bravely opined that ERHC Energy's share price (OTC BB symbol: ERHE) would hit $1 by the end of June. Then, I think on Friday, I told you that prediction looked pretty sad. Now, though, I am not so sure I am wrong.

This week, following the anouncement that all bidders have accepted the awards of oil exploration rights in the Nigeria-Sao Tome and Principe Joint Development Zone by the zone's Joint Development Authority, there is a possibility that three major oil players - our partners, Devon Energy and Pioneer Natural Resources in Block 3 and and Block 3, and Noble Energy in Block 4 - will mention our role in the awards of substantial acreage in the JDZ. We may also get a press release from our own company noting the same progress.

Also on the press release front, it's possible (although less probable) that the impact of three releases this past Friday from the JDA, Reuters and Dow Jones may finally begin to be felt this week.

Then, too, there's the price of oil: it stood at $60.47 at 5am this morning, near an all-time high. That's helped drive the price of ERHC rival Equator Exploration (EEL) to 155 pence on the London AIM exchange this morning, and given that we have rights to so much more acreage than they do, it soon ought to start to tell in our share price.

Finally, there is the Chinese factor. Sinopec and other Chinese energy companies have been aggressively seeking acreage in West Africa, and it is not inconceivable that one of them will seek a stake in ERHC Energy, whose stock is cheap and whose prospects are very, very bright.

So, despite the miserable performance of our stock (ERHC On The Move holds 120,000 shares at an average price of $0.4374), we will stick with our prediction, and are ready to eat a giant plate of sushi if we are proved wrong by Friday's close.

True, worse things could happen.

Trading Updates: 10:31pm EDT, 6/27/05: ERHE closed at $0.47 on volume of 905,588 shares.

Trading Updates: 3:42pm EDT, 6/27/05: ERHC Energy did release a statement on the awards, and Ruby1100 promptly labeled it "the lamest press release" ever as the share price fell to $0.48 on low volume of 510,082 shares. It certainly is the essence of restraint:

ERHC Announces Acceptance of Awards
Business Wire - June 27, 2005 14:26

HOUSTON, Jun 27, 2005 (BUSINESS WIRE) -- ERHC Energy Inc. ("ERHC" or the "Company") (OTCBB:ERHE) announced that it had accepted the awards of interests in five block in the Joint Development Zone ("JDZ") as was described in the Press Statements by the Nigeria-Sao Tome and Principe Joint Development Authority ("JDA") on May 31, 2005 and June 24, 2005.

About the Company

ERHC is an oil and gas company focused on exploration in the Gulf of Guinea offshore West Africa. ERHC's headquarters are in Houston. For more information, visit ERHC's Web site at


ERHC, Houston
John Coleman, 713-626-4700

We noticed that Coleman made no mention of any of our partners, and thus feel it's unlikely our partners will make any mention of us. One would also draw from that morsel of evidence the idea that there may be a food fight going on among the members of the consortia as they try to sort out their Production Sharing Contracts and Joint Operating Agreements.

Trading Updates: 8:17am EDT, 6/27/05: The Friday close was $0.485 on 747,400 shares of volume. The Bid and Ask at Friday's close was $0.48 x $0.49.

Meanwhile, here's a bit of catch-up news from the Nigerian daily ThisDay Online:
JDA: Final Agreement for Sept
From Onyebuchi Ezigbo in Abuja, 06.27.2005

The Nigeria-Sao Tome and Principe Joint Develop-ment Authority (JDA) has said that it hopes to conclude all negotiations regarding the terms of agreement for the exploitation of the five oil blocks recently awarded to some oil companies in the 2004 Licensing round by September 2005.

A statement from the JDA at the weekend requested all awardees of the five oil blocks recently approved by the governments of Nigeria and Sao Tome and Principe under the 2004 Licensing round to commence Joint Operating Agreements (JOA) among the consortium for each oil block.

The authority said it is now in a position to commence the negotiations of the Production Sharing Contracts (PSCs) with the awardees based on the Model PSC document, having received acceptance of offer from the companies in respect of the five oil blocks.

"JDA expects the awardees to also commence the negotiations of the Joint Operating Agreements (JOAs) among the consortium for each block in parallel with the PSC negotiations in order that 2004 Licensing Round can be completed within three months, and the two countries can receive the Signature Bonuses while work programmes can commence in earnest".

President Olusegun Obasanjo and his Sao Tome and Principe counterpart, Fradique de Menezes on May 31 in Abuja jointly approved the award of five oil blocks in the 2004 Joint Development Zone (JDZ) licensing round after several postponements.

The companies awarded the oil blocks include Conoil with 20 per cent equity in block 4 won by Noble/ERHC, which has 60 per cent, Hercules oil (10 per cent), Godsonic Oil and Gas (5 per cent) and Overt Oil (5 per cent). The winners are to pay a signature bonus of $90 million dollars.

Devon/Pioneer/ERHC as the operator with equity of 65 per cent won Block 2. Others who got equity in this block include Equator Exploration/ONGC Videsh (25 per cent); A. & Harmattan (10 per cent); Foby Engineering (5 five per cent); and Momo Oil & Gas (5 per cent).The signature bonus for the block is $71 million.

Block 3 with a signature bonus of $40 million has Anardako oil as the operator for Block 3 with equity of 51 per cent, Devon/ERHC (20 per cent); DNO/EER (10 per cent); Equinox (10 per cent); and Ophir/Broadlink - 4 per cent. They are to pay a signature bonus of $40 million.

The ICC/OEOC Consortium is the lead operator for Block 5 with a signature bonus of $37 million; its equity is 75 per cent. ERHC has 15 per cent while Sahara has 10 per cent. Oil Block 6 was won by Filthim-Huzod Oil & Gas with 85 per cent equity, while ERHC has 15 per cent equity in this block.

Sunday, June 26, 2005

"The Christmas Strike" Adds A Thriller To ERHC Energy Lore

Stephan Zimmerman, the author of the mystery thriller "The Christmas Strike," doesn't know much about armies or Congress, but he has written a novel that ERHC Energy investors will find so uncomfortable they might want to ask Congress to send in the U.S. Army to stop its publication.

His 2004 novel is the story of a terrorist plot to unleash an electromagnetic pulse (EMP) device against the United States, but its subplots include the efforts of a United States Senator from California to call a nationwide general strike on Christmas Eve, 2004, to further both his political and private ambitions.

The Christmas Strike by Stephan Zimmerman paints a sordid picture of an ERHC Energy-lookalike company and an American senator who betrays his country to make millions from his oil investment in the Gulf of Guinea. It is available as either a printed novel or a download from

Sen. Jack Cortland is a California liberal who is poised to enter the 2008 presidential race as the man who saved America from another Iraq-like folly, this one an invasion of the tiny island nation of Sao Tome and Principe. He is also a massive shareholder in a Nigerian-owned oil company that has managed to obtain some valuable rights to oil-bearing acreage in the Gulf of Guinea development zone jointly operated by Nigeria and Sao Tome.

It seems that "terrorists" - and their unmasked identities will surprise no one who held ERHC Energy stock through the stormy sessions of Sao Tome's parliament during the 2004 licensing round - have assassinated the U.S. Ambassador to Gabon (whose portfolio includes Sao Tome) and his family, and are also "holding" a few dozens oil industry executives and workers, some of them Americans, hostage for millions of dollars.

To take back the hostages, President Sheridan Washburn orders a super-secret strike against the Sao Tome "rebels" - shades of President Carter's Iranian hostage mission - that is betrayed by Cortland, a member of the Senate Intelligence Committee who has been given a copy of a Top Secret cable ordering the strike. The mission is ambushed by Sao Tome soldiers who lay in wait, most of our soldiers are killed, and President Washburn is suddenly in deep, deep political trouble.

Sen. Cortland has been working behind the scenes for months to prepare the ground for an unprecedented general strike of all the unions in the United States - ostensibly to caution the president against another Iraq-style adventure - and as the strike gets underway chaos is spread through the nation's communications, transportation and service sectors.
Two aides, Pete Carpenter and his girlfriend Stella, are central to Cortland's plans but disapprove of this one. They fail to stop Cortland after their key labor ally suddenly dies, and like good San Francisco liberals, they retreat to a friend's cozy cabin in Big Sur to screw until the trouble - or most of it - is over. When they summon the courage to return to the fray, they find the road to Monterey blocked and the country in the grip of martial law.

There is a curious turn in the novel that I could not understand. It seems the real reason that Sen. Cortland wants to call the general strike - apart from helping to launch his presidential campaign - is to protect his investment in the ERHC Energy lookalike, which is unnamed in the novel. To do that, Cortland feels he must stop the invasion of Sao Tome or risk the creation of a U.S. naval base there. It's unclear to me how a U.S. naval base protecting American inrterests in that region would hurt, not help, the senator's investment.

Be that as it may, we follow the government's response to the labor crisis, which has spawned dozens of riots in large cities across the nation, through the purely domestic issues into a move by China to take advantage of it.

Just when it seems the domestic unrest is resolved, the real terrorist plot that opens the novel unfolds in simple, terrifying steps. No American who remembers Sept. 11 will find it the least but implausible, I warn you. China is a secret player in the background of the story that only emerges when the climax offers its generals a frightening opportunity.

Stephan Zimmerman's rather desultory view of the Nigerian oil company mimics much of the bad press that Environmental Remediation Holding Company (the original ERHC) received in leading newspaper like the Los Angeles Times. One would think Zimmerman was a former publicist for ExxonMobil, so bent is he on painting a tawdry picture of the oil giant's tiny but extremely successful competitor.

Investors should go to to buy the book for $18.80, or to, where you can enter the search phrase "The Christmas Strike" in the Search box to order a printed copy ($22) or pay $10 to download the 388-page book. The ISBN number is ISBN 1-4116-1163-2. Its driving momentum and constant suprises will carry even the most illiterate Raging Bull poster swiftly along to the terrifying climax.

Whatever the portrait of ERHC Energy Stephan Zimmerman may have painted, his book - typos, errors and all - is yet another milestone in the life of the "minnow" that has generated not only this blog, but the Raging Bull insanity, an Investors Hub site and the Website, in addition to countless newspaper and Internet stories, an ocean of intrigue - and probably a movie.

Friday, June 24, 2005

Trading Updates: A Slew Of News As Dow Jones, Reuters, And JDA Weigh In With Awards Releases

A slew of news has broken this morning, carried in releases by Reuters, the premium Dow Jones News Wire, and the Nigeria-Sao Tome and Principe Joint Development Authority (JDA). They are all posted below.

Although all the news is good, there has so far been no reaction in the marketplace, where ERHE is trading slightly lower today on tepid volume.

The news is that all of the winners of the bidding in Round II of the Joint Development Zone auctions pf Gulf of Guinea oil concessions have accepted the awards they were offered - not a sure thing because of the increased signature bonus fees on some - and that Production Sharing Contracts for all of the five offered blocks will be done in three months, not the six that a JDA official predicted in a Reuters news story early this week.

The JDA also said the companies who won are also expected to negiotiate theuir Joint Operating Agreements "in parallel" with the PSCs. Those agreements limn the relationship between members of the various consortia that are operating or participating in the five blocks.

Update, 3:29pm, 6/24/05: For my convenience, blog Comments have been turned off. We will notify you when they are turned back on.

Update, 3:23pm, 6/24/05: The price is $0.487, so the good news has actually hurt a little bit - at least so you'd suppose, if this share price made a lick of sense. Don't owrry, it doesn;t. The volume is a very modest 620,898, and the Biod and Ask are $0.487 x $0.49. I have errands to run, and this will likely be the last Update of the trading day.

Update, 2:23pm, 6/24/05: The market is still snoring in the Summer sun. The price is still $0.49, and the volume has only inched up, now to 588,911 shanes. The Bid and Ask are $0.4875 x $0.49.

Update, 1:43pm, 6/24/05: The market read the JDA, Dow Jones and Reuters news and rolled over and went back to sleep. The price is $0.49, the Ask, and the Bid is $0.485, on still-lukewarm volume of 558,941 shares.

Update, 12:53pm, 6/24/05: Volume is still slow, at 429,814, but the Bid is better at $0.49 and the Ask is imporoved at $0.50.

Update, 12:33pm, 6/24/05: Volume has risen just 22k since the announcements began. The share price is $0.49, the Ask, while the Bid remains unchanged from earlier at $0.485. It is unclear whether the news was long ago discounted or has not reached the market. If, as expected, Noble Energy, Devon Energy and Pioneer Natural Resources all issue releases mentioning the role of ERHC Energy, the effect may be galvanic, however.

Update, 12:05pm, 6/24/05: The price is $0.49, the Ask, with the Bid at $0.485 and volume a slow 368,534.

Reuters has updated its story, also shortening the timeline. Hee is the new Reuters story, which again mentions ERHC Energy prominently:

Nigeria-Sao Tome see oil PSC talks over end-Sept
Fri Jun 24, 2005 11:59 AM ET

ABUJA, June 24 (Reuters) - Sao Tome and Nigeria expect negotiations of production sharing contracts (PSCs) for five offshore oil blocks to conclude within three months, the Joint Development Authority (JDA) that administers the blocks said on Friday.

The JDA awarded the five exploration licences on May 31 after a turbulent five-month delay over disagreements between the countries and accusations of corruption.

The JDA said on Friday it had received acceptance from the consortia that were awarded the licences, and was now in a position to start negotiating PSCs with them.

"The JDA expects the awardees to also commence the negotiations of the joint operating agreements among the consortium for each block in parallel with PSC negotiations, in order that 2004 licensing round can be completed within three months," the authority said in a statement.

A consortium of ERHC Energy (ERHE.OB: Quote, Profile, Research) and Devon (DEV.N: Quote, Profile, Research) won a 65 percent stake and the operatorship of block two, while the operatorship of block four, the other most highly contested block, was won by a consortium of ERHC Energy and Noble.

Anadarko (APC.N: Quote, Profile, Research) won a 51 percent share and the operatorship of block three, the consortium of International Commerce and Communications (ICC) and Oil Exploration Consortium (OEC) got 75 percent and operatorship of block five, while block six went to Filtim Huzod which secured 85 percent and operatorship of the acreage.

The blocks are in the deep waters of the Gulf of Guinea, one of the world's exploration hotspots since a series of huge oil discoveries over the last decade.

This was the second licensing round, since the first was aborted after just one exploration contract was awarded for $123 million, to a consortium led by U.S. energy giant Chevron (CVX.N: Quote, Profile, Research) .

Nigeria and Sao Tome set up the JDA in 2000 to administer the offshore area after signing a treaty ending a protracted maritime border dispute.

Here is the Dow Jones story:

Sao Tome Says Oil Field Negotiations To Wrap Up In 3 Mos
24 Jun 2005 10:17 ET DJ

LONDON (Dow Jones)--Negotiations for operating agreements and production sharing contracts on five Sao Tome oil blocks should be finished within three months, the agency overseeing talks said Friday.

The five oil blocks were awarded May 31 after protracted talks between the Nigerian and Sao Tome which jointly govern the offshore fields believed to hold billions of barrels of oil.

The talks were marred with accusations of corruption and rocked the tiny island-state of Sao Tome with a series of high profile resignations from government.

The Joint Development Authority said in a statement that all the awardees of the bidding round have accepted the offers.

The statement said the agreements would be modeled on the contracts signed for block 1 which was granted earlier to Chevron (CVX) and ExxonMobil (XOM) in February.

Winners in the second round include Devon Energy Corp. (DVN) and ERHC Energy Inc. (ERHE) on block two.

Block three went to Anadarko Petroleum (APC). Block four was awarded to a consortium of Noble Energy Inc. (NBL) and ERHC. Block five was given to Nigerian independents I.C.C-O.E.O.C.

Nigerian independent Filtim-Huzod won block 6.

-By Shai Oster, Dow Jones Newswires; +44-20-7842-9357;
June 24, 2005 10:17 ET (14:17 GMT)

And here is the long-awaited JDA press release:


the Nigeria-Sao Tome Joint Development Authority is please to announce that as at 23rd June 2005, all awardees in respect of the five blocks offered in the 2004 Licensing Round have confirmed their acceptance of the offers.

Furthermore, the JDA is now in a position to commence the negotiations of the Production Sharing Contracts (PSCs) with awardees based on the Model PSC document negotiated for Block 1.

The JDA expects the awardees to also commence the negotiations of the Joint Operating Agreements (JOA's) among the consortium for each block in parallel with the PSC negotiations in order that 2004 Licensing Round can be completed within three months, and the two countries can receive the Signature Bonuses while work programmes can commence in earnest.

Nigeria Sao Tome and Principe
Joint Development Authority

24th June 2005

Upstream Article Raises Hopes For Quicker Deals

An article in the respected UpstreamOnline petroleum trade paper has encouraged investors to believe that Production Sharing Contracts with the Nigeria-Sao Tome and Principe Joint Development Authority may be signed far sooner than they were first led to believe, opening the way to earlier exploration wells.

The article, which was unsigned, traced the political aftershocks of the JDA awards on the tiny island nation of Sao Tome and Principe, two dots in the Gulf of Guinea that are fast becoming the center of international attention as drilling rigs head there to establish the viability of the much touted Joint Development Zone blocks.

Five of the blocks were successfully auctioned in November and December, 2004, and after many delays the winning bidders were announced on May 31, promptng a 28 percent leap in the share price of the biggest winner, ERHC Energy (OTC BB symbol: ERHE) that was quickly undercut by massive selling. Only now has the ERHE selling subsided, with the share price at $0.495 on Thursday, up just 0.20 percent from Wednesday's close.

This week's selling has been prompted in part by a Reuters news agency article saying the contracts will not be signed for six months, which would put the signing in early January of next year.

The Upstream article, however, said contracts could be finished "in the next 30 days." That comment echoed one by JDA spokesman Sam Dimka in a telephone conversation with investor Markvol1 on Thursday, in which the regular poster said he was told that some PSCs could be signed far ahead of others.

The deepwater experience of ERHE's U.S. partners in Blocks, 2, 3 and 4 - Devon Energy and Pioneer Natural Resources in Blocks 2 and 3, and Noble Energy in Block 4 - could speed up the process, as will the fact that a similar PSC for Block 1 between the JDA and ChevronTexaco, ExxonMobil and the joint venture of Energy Equity Resources of Norway and the Nigerian firm Dangote has already been fully negotiated and signed.

There was celebration on the heavily-censored Investors Hub board, to which many shareholders fled as the Raging Bull ERHE message board seemingly went insane, and key lines from the story were posted again and again. Here is the story, courtesy of trusted poster Ruby1100, with the "hot" paragraphs in boldface:

Menezes stirs hornets' nest

A rift over oil policy has inflamed latent political rivalries in prospective Sao Tome & Principe, putting the president in a precarious position ahead of upcoming elections for the top job

President Fradique de Menezes may soon face re-election if the political turmoil in the twin-island archipelago of Sao Tome&Principe deepens. To lose a special adviser may be considered unlucky, but then to lose one's oil minister and prime minister in quick succession, just as you conclude a ground-breaking lease sale in West Africa's hottest oil patch, smacks of carelessness.

His autocratic style in pushing through six awards under a licensing process administered by a treaty provision with neighbouring Nigeria in the Joint Development Zone offended the local elite, several of whom stood to gain from alternative selections. Ministers cited disagreement over oil policy as reasons for resigning.

Labour unrest in the civil service testifies to a growing sense of frustrated expectation among a 140,000-strong population demanding quick gains from the promised oil bonanza. However, World Bank constraints prohibit sharp pay rises, despite the $160 million in signature bonuses heading for Sao Tome's coffers Sao Tomeans owe a whopping $320 million in foreign debt.

About $50 million is already on its way from the Chevron-led consortium, in which ExxonMobil holds a 25% stake, that landed Block-1 in the first round in February.

The drillbit will go down before the end of the year and observers predict Noble Energy, Devon Energy and Pioneer Natural Resources, in tandem with Texas-based ERHC Energy, will swiftly follow suit if the remaining five production sharing contracts are signed within 30 days as expected.

Signs are the 55-member parliament will also be forced back to the ballot box rather sooner than November 2006 alongside a presidential poll, mainly fielding yesterday's men to a jaundiced electorate desperately seeking new faces. New blood is thin on the ground and the parties are in disarray.

Nonetheless, "Sao Tome is a functioning democracy and we would encourage it to remain so", the US State Department stated this week. A proposed military facility on the islands, along with other measures to help shore up regional stability in the Gulf of Guinea, where the US expects to source 25% of its oil and gas in the coming years, is also "under review", according to US Defense Department officials.

It will not be an easy ride, despite the islands' ethnic, religious and cultural homogeneity. Sharp factional divisions, similar to the politics of the more restive East Caribbean states, persist and the country remains coup-prone as last year's abortive putsch, in which Menezes was restored to power through Nigerian mediation, clearly demonstrated.

Best equipped to salvage electoral sympathies is the Movement for Liberation&Social Democratic Alliance (MLSTP), which has a well-oiled machinery to fall back on but who will run for the top job remains an open question.

Menezes benefited from MLSTP malcontents along with factional support from the Independent Democratic Action Party (ADI), the party of his predecessor Miguel Trovoada. However, Menezes has effectively split the ADI, weakening his own power base.

It is understood former head of state Pinto da Costa will not stand but that former foreign affairs minister Posser da Costa, who was prime minister under Trovoada, will run. Meanwhile, Trovoada's son, Patrice, who resigned as Menezes' special advisor on petroleum, is likely to fight a spirited campaign against those he believed let him down in the JDZ debacle. Houston-based Patrice Trovoada is understood to have backed Anadarko's bid for Block-4 and opposed the five-block deal that Menezes eventually agreed to break the gridlock on the long-delayed round.

Yet to declare his interest in the race is Carlos Gomes, the current head of the Nigeria-Sao Tome Joint Development Authority and one-time point man for ERHC.

Providing subtext to the political discourse over the next few months will be the vexed question of how to proceed with licensing of the Exclusive Economic Zone, set to kick off in six months' time, against World Bank advice.

With JDZ awards barely done and dusted, the attraction of leasing acreage over which Sao Tome exercises exclusive control will be seized by politicians keen to pin down a fresh source of patronage.

Both ERHC and BVI-registered Equator Exploration are touting preferential acreage deals in the EEZ. Lawsuits have yet to fly, but it is understood the government of Sao Tome has already been served notice by lawyers acting for the Texan company that it will not compromise on rights it claims are secured by treaty.

And if that is not enough to chew on, there is fresh secessionist talk in the even more sparsely populated and socially depressed island of Principe, in which practically all JDZ/EEZ prospects are concentrated.

It is going to be acrimonious.

Thursday, June 23, 2005

Trading Updates: Little Hope Of Quick Recovery

The days when ERHC Energy (OTC BB symbol: ERHE) bounced off the sub-$0.50 level like a rocket ball are over. On low volume today, ERHE has moved down again.

No one can de absolutely sure what has caused the most recent wave of selling, which yesterday saw Buys eclipsed by Sells by a 3:1 margin on the news that JDA contract signings would not occur until next year.

The sole prospect for a takeoff from these levels now appears to be the rumors mutwadadi has heard in Nigeria concerning a possible buyout of ERHC "a few months" from now. If we can get a few months down the road on that hope, then possibly we can get another four or five months down to the Production Sharing Agreements for our new properties in Blocks 2, 3, 4, 5 and 6 of the Joint Development Zone.

Update, 3:21pm EDT, 6/23/05: At the Surge, we were selling at $0.505, the high of the day and the Ask - but we just slipped to $0.48. The Bid has fallen to $0.48, and the Ask at 3:21 had fallen to $0.485 but went back to $0.50. Volume is 848,946 after a very quick series of large trades.

Update, 2:18pm EDT, 6/23/05: The price is $0.50, the Ask, as volume picks up a little, now to 511,656 shares. The Bid is $0.49, as market makers and accumulators still hope to get in cheaply. To clear the record, I still have my 120,000 shares, which I very nearly sold yesterday. My average price is $0.4379, and my profit at the moment is $7,269.30.

Update, 1:40pm EDT, 6/23/05: "Time passes slowly up here in the mountains," Judy Collins sang, and it passes even more slowly watching ERHE volume rise on the OTC Bulletin Board today. We've been stalled now for half an hour, reaching 320,656 with the price at $0.49, the Bid, and the Ask at $0.495.

Update, 1:23pm EDT, 6/23/05: The price is $0.49, the Bid, and the Ask is $0.495 as volume finally inches over 300K to 310,656 shares.

Update, 12:48pm EDT, 6/23/05: The price is $0.495, the Bid is $0.49 and the Ask is $0.4999. Volume has crawled to 277,156, and we may experinece one of the slowest days in recent memory.

Update, 12:15pm EDT, 6/23/05: The price is $0.4999, the Ask, and the Bid is $0.49. No big buy has emerged; volume is a tepid 273,156 shares.

Update, 12:10pm EDT, 6/23/05: Markvol1 has another update, from his new "technical" contact. The information is pretty much the same:

I just spoke with the person (can't spell or pronounce his name) that Dimka forwarded me to. His phone number is 011 234 9 523 5301. I asked him what his role is and he explained that he deals with Technical matters. He said Sam was correct that Press Statement will be issued once all acceptance letters are in. He did confirm that deadline was today. Also, I asked him about PSC's and if all PSC's had to be signed and announced at same time or if the PSC's would be signed and announced as they are negotiated and completed. He explained to me in very simple terms that there are 5 blocks and different companies in each block and that some PSC's would be done much much sooner than others. He asked him about Gomes comments in the Reuters article that PSC's wouldn't be done until end of this year and he said the JDA has to be very cautious and they don't want to speculate on dates.

Update, 12:06pm EDT, 6/23/05: The price is $0.49 now, and volume remains slow at 273,006. Interesting that the Ask is a four-decimal number, $0.4999, while the Ask is at $0.49. The four-digit Ask may indicate an institutional sale of substantial size.

Update, 11:56am EDT, 6/23/05: Markvol1, who speaks often with Nigeria-Sao Tome Joint Development Authority spokesman Sam Dimka, reports on his conversation with Dimka rthis morning. Admittedly, we're all grasping for straws here insofar as the slow pace of Production Sharing Agreements, but here's the latest:


Just spoke with Sam Dimka at the JDA. He said he "expects to be briefed today or tomorrow" on acceptance of winners for the 5 blocks. He also said that once this is done JDA will Press Release all details. Also, I asked him about timing of PSC's and Gomes comments about end of year. He said that JDA has to be very cautious of timelines given out (because of all past delays). I asked him if PSC's could be done much sooner and he said "obviously some will be negotiated and done very soon." He did not want to speculate which ones but this was VERY encouraging. Not sure why he said obviously but I like it. Sam gave me another contact that would be able to give me more info. I will call and update if I get anything.

Update, 11:38am EDT, 6/23/05: We're at $0.485 now, the Bid, with volume still slow at 252,056 shares and the Ask still at $0.50. According to ADVFN, which is delayed 15 minutes, someone picked up 83,165 shares between 10:45 and 11:12 at $0.495. For the day until 11:27am, Buys outnumbered Sells 124,365 to 109,691.

Update, 10:48am EDT, 6/23/05: The price is $0.50, with the Ask at $0.499, and the Bid at $0.485. Volume is 10K better at 131,591 shares.

Update, 10:40am EDT, 6/23/05: The price is $0.48, the Bid, which recently hit $0.475, and the Ask is $0.485, which was the Bid at yesterday's close. We look headed for the $0.44 region soon, and I suspect the bottom - probably within a week - will be in the $0.38 range once again. So much for my sad prediction of $1 by July. The volume is a pallid 121,091.

Wednesday, June 22, 2005

Trading Updates: Reuters News Could Lift Price; STEEZ Delayed Until '07

A story out of the Reuters news agency (see bottom of this post) yesterday said the Nigeria-Sao Tome Joint Development Authority, which once said it would sign production sharing contracts at the same time it announced awards, now says the agreements will be completed "before the end of the year."

However, the story clearly identified ERHC Energy as the major winner - with its partners Devon Energy and Pioneer Natural Resources in Blocks 2 and 3 and Noble Energy in Block 4 - was the major winner of the licensing round.

Getting that news out to investors may boost the share price today, but since it was released at 3:27pm yesterday, it may have had all the effect it's going to have. We'll just have to see as the market opens.

Update, 4:00pm, 6/22/06: We close at $0.494, off $0.016, with the Bid and Ask $0.48 x $0.494 and good volume of 1,864,900.

Update, 3:48pm, 6/22/06: In another blow to ERHC Energy investors, the daily online petroleum journal UpstreamOnline reported today that Sao Tome and Principe has decided to hold off on its own Exclusive Economic Zone licensing round until 2007, instead of November 2005, as earlier reported, and will offer 10 to 20 blocks. ERHC Energy has great rights in that zone - two full blocks with no bonus fee - but the Sao Tome parliament is poised to revisit its petroleum and oil tax laws, a signal that they will try to shunt us aside.

Meanwhile, near the close the price is $0.494 after someone bought a hair under 100,000 shares, but $0.485 is still the Bid, and the Ask is $0.494. Volume has climbed rather dramatically from a slow start today to 1,860,900 shares.

*Sao Tome slates 2007 for round
By Upstream staff

Sao Tome said it aims to launch the first oil exploration licencing round for its Gulf of Guinea waters in 2007.

The round cannot begin until the country's parliament has revised its petroleum law and oil tax regulations, according to the executive director for national petroleum at Sao Tome's Ministry of National Resources, Luis Prazeres.

Prazeres said the revisions should be completed by May 2006.

He estimated that the round would likely be for between 10 to 20 blocks in Sao Tome's exclusive economic zone (EEZ).

Sao Tome has already completed two licencing rounds in conjunction with Nigeria in shared deep water known as the Joint Development Zone (JDZ).

The upcoming licencing will be the first for waters over which Sao Tome has exclusive authority.

Chevron expects to drill the first exploration well in the JDZ next year.

Sao Tome's EEZ is located in deeper waters of 1850-2300 metres compared to the JDZ's 1800 metres, according to Reuters.

The Gulf of Guinea is expected to be one of the major areas of oil supply growth in coming years.

Update, 2:57pm, 6/22/06: The price is $0.49 after hitting a low of $0.48. Volume is a healthy 1,579,200 shares, and the Bid and Ask are $0.482 x $0.49. My profit is under $6,000.

Update, 1:27pm, 6/22/06: The price is solidly at $0.495 now, the Bid, while the Ask is $0.50 and we have crossed the million-share mark and stand at volume of 1,049,500 shares. I am tempted to sell all of my 120,000 shares to preserve my profit. Meanwhile, I note that EEL has more than doubled since it hit a May low of 77 pence. It now stands at 155 pence.

Update, 1:02pm, 6/22/06: The price momentarily slipped below $0.50 to $0.495, the Bid, while the Ask went to $0.50. Seconds later, however, the price recovered to $0.50 and the Bid and Ask are $0.495 x $0.505. while volume has climbed to 931,186 shares.

Meanwhile, Rancho has revealed pretty good evidence - in the form of two simultaneous posts under their different names of the same message - that pumper TiburonTim and basher Mongo are one and the same person.

Update, 12:55pm, 6/22/06: Google News has just discovered the situation in Sao Tome, without providing any new information, however. Here is the Google story:

22 June 2005
Pouring oil on Sao Tome's troubled waters

Despite São Tomé and Príncipe's bleak economic situation, the tiny African archipelago's remote maritime location could be its fortune. Facing a national debt of more than US$330 million - equating to US$2,000 for each of the 170,000 islanders, or six times their annual output - the economy has previously been overwhelmingly reliant on the export of cocoa at unstable global prices.

Despite this bleak scenario, economic salvation could be very close at hand. Advances in oil technology over the past decade have made deepwater oil production economically viable and have opened up vast areas of maritime territory for exploration. The discovery of oil off São Tomé and Príncipe is by no means guaranteed, but the geology looks promising and even the discovery of small amounts of oil could revolutionise the São Toméan economy, given that the government is entitled to 40 per cent of all state revenues generated in the joint development zone.

Parliament ignored

The resignation of Prime Minister Vaz d'Almeida on 2 June was directly linked to the award of five more production sharing agreements a day earlier. In stepping down, he said that he could no longer work with President Fradique de Menezes, who has taken the lead in oil negotiations and who is alleged to have largely bypassed parliament.

The injection of so much money into the economy even before oil has been discovered should trigger increased economic growth, but may exacerbate political tensions even further. While a repeat of the coup that unseated de Menezes for a week in July 2003 is unlikely, the stakes in the political game are now higher than ever.

Update, 2:52pm, 6/22/06: I'm all out now, with a profit of just over $5,000 and a lot of damage to my pride. I'll likely jump back in as soon as the price is attractive once again. The price is currently $0.482, the Bid, and the Ask is $0.4940, with volume at a healthy 1,579,000 shares. For the time being, though, I have to say long to my dreams.

Update, 12:45pm, 6/22/06: Volume has reached 885,645 shares, but the price is $0.50, the Bid, with the Ask still at $0.505 and no movement in sight. This reminds us a lot of the period in early November last Fall, when well after the fact we learned 63 million shares had been paid as a settlement and the company had gone to the market for 24 million shares while issuing 70 million-odd new ones to itself at $0.17. At that time, the stock would trade all day, and it would often take a million shares of volume to move it one cent. Meanwhile, crude prices are off $0.79 to $58.25, ExxonMobil and Pioneer Natural resources are down and Chevron, Devon Energy and Noble Energy are up.

Update, 11:52am, 6/22/06: The price is $0.505, the Ask, with the Bid at $0.501, asnd volume reaches 753,295. It looks like someone has taken advantage of the low price to buy several hundred thousand shares this morning.

Update, 11:32am, 6/22/06: The price inches back to $0.51, the Bid goes to $0.505, and the Ask stays at $0.51 and volume starts moving again at 676,795 shares.

Update, 11:11am, 6/22/06: Ameritrade killed the E*Trade offer and instead has bid $3 billion for TD Waterhouse, CNBC reported. The price is $0.50, the Bid, and the Ask remains at $0.51, with the volume virtually unchanged in 18 minutes.

Update, 10:53am, 6/22/06: The price has slipped back to $0.50, the Bid, with the Ask still at $0.51 and volume moving up to 604,767 shares.

Update, 10:39am, 6/22/06: In a new note to ERHC On The Move, favored poster Mutwadadi asks, "Who is running the JDA?" The price is $0.505, and Bid and Ask are unchanged. Volume has reached 510,167, holding out the prospect of a million-share day.

Update, 10:29am, 6/22/06: The price is $0.505, a slight improvement and the Bid. while the Ask is at $0.51. Volume is picking up at 480,167, indicating stronger interest at these rock-bottom prices.

Update, 10:17am, 6/22/06: The price and Bid have slipped back to $0.50, and the Ask remains at $0.50. The big question is: Will we bounce from $0.50 again? Volume is slow at 272,034 shares.

Update, 10:10am, 6/22/06: The price is $0.5025, while the Bid is $0.0005 lower at $0.5020 and the Ask is $0.505 and volume stalls at 262,034 shares.

Update, 9:46am, 6/22/06: We're off a cent at $0.50, the Bid, and the Ask $0.505. Volume is 229,734, which is fairly brisk compared to recent activity.

Update, 9:30am, 6/22/06: No sign of help yet, as the share price slips a half cent to $0.505 at the opening on a modest 84,234 shares.

Here is the Reuters story:

Nigeria/Sao Tome aim for new oil deals by end '05
By Simon Webb

Tue Jun 21, 2005 03:27 PM ET

LONDON, June 21 (Reuters) - Nigeria and Sao Tome are aiming to sign five new oil exploration contracts with operators in shared offshore waters by the end of the year, the chairman of the zone's oil administration authority said on Tuesday.

The contracts would allow the winners of the second Nigeria-Sao Tome licensing round to begin drilling exploration wells.

"We hope to have these agreements signed by the end of the year," Carlos Gomes, chairman of the Nigeria and Sao Tome Joint Development Authority, told Reuters on the sidelines of a West African oil and gas conference.

Signing contracts by the end of 2005 would mark a significant reduction in the negotiation time to less than seven months for a contract following the award of an exploration license.

The JDA awarded its first exloration license to a Chevron-led (CVX.N: Quote, Profile, Research) consortium in October 2003, but it did not sign an exploration contract with Chevron until February this year, nearly 18 months later.

Lengthy negotiations over contract details delayed the signing.

A Chevron source involved in the first round of negotiations said the accelerated time scale for the second round was plausible as the JDA would be more familiar with the process after thrashing out the details with Chevron.

"I think they should get these contracts signed more quickly," the Chevron source said.

Companies that won the rights to exploration blocks in the second licensing round in May include ERHC Energy (ERHE.OB: Quote, Profile, Research) , Devon (DEV.N: Quote, Profile, Research) , Noble and Anadarko (APC.N: Quote, Profile, Research) .

The JDA has formally notified companies of their award and the percentage equity share in the blocks this week and companies have two weeks to accept the notification, Gomes said.

The waters are in the Gulf of Guinea, one of the world's exploration hotspots due to several major deepwater oil discoveries in the last 10 years. Big discoveries have been made in Nigerian and Angolan deepwater.

The region is one of the key drivers of global oil supply growth. The United States, the world's largest oil consumer, hopes to import a quarter of its oil from the Gulf of Guinea region in a decade, up from 14 percent now.

The Nigeria-Sao Tome Joint Development Zone was established in 2000 in the previously disputed offshore area. Under the agreement, Nigeria receives 60 percent of revenues while Sao Tome receives 40 percent.

Oil Supply Could Grow, Cambridge Energy Associates Srudy Says

Taking a position contrary to those of the "peak oil" theorists, the respected Cambridge Energy Associates said in a new report that oil supplies may actually expand, not shrionk, over the next five years, the Christian Science Monitor reported.

World > Global Issues
from the June 22, 2005 edition

One energy forecast: Oil supplies grow

By Ron Scherer | Staff writer of The Christian Science Monitor

NEW YORK – According to the Association for the Study of Peak Oil & Gas, the end is near - when the earth's oil reserves start to run dry and scarce petroleum will go to the highest bidder. Seers have written books detailing that time, and websites such as forecast a steady rise in prices - such as Tuesday's oil price of more than $59 a barrel.

Not so fast, maintains a new report issued Tuesday by the widely respected group Cambridge Energy Research Associates (CERA). Instead of the wells running dry, CERA says petroleum supplies will be expanding faster than demand over the next five years, according to an analysis oil field by oil field. In good news for the SUV set, the new oil will be light, sweet crude - ideal for making gasoline. And since supply will grow, CERA forecasts prices will fall, possibly below $40 a barrel.

"We expect supply to outpace demand growth in the next few years, which would take the pressure off prices around 2007-2008 or thereafter and even lead to a period of price weakness," says Peter Jackson, a coauthor of the report.

Kjell Aleklett, a professor of physics in Sweden and president of the Association for the Study of Peak Oil & Gas, says the CERA report is overly optimistic. In addition, he says, one of his students looked at a draft of the report and concluded that CERA double-counted. "I'm not worried about this report," he said from a cellphone in Madrid. "Over the next several years, they will find new oil fields, but then it will be hard to do it."

Still, CERA maintains that higher prices are encouraging production and that technology is helping to capture oil from older fields. It foresees non-OPEC production expanding rapidly through the rest of the decade, particularly as new supplies come onstream from Russia, the Caspian, Brazil, Angola, and Canada.

Much of the production increase is already starting to happen as oil-rich nations begin to dig deeper and produce faster. According to the report, there are approximately 20 to 30 new major projects (producing more than 75,000 barrels per day) coming onstream every year until 2010. These will add 3 million to 4 million barrels of oil per day each year.

Over the next five years, there will be 10 million barrels per day of new light or medium crude and 3 million barrels per day of new heavy crude. Altogether, supply will exceed demand by 6 million to 7.5 million barrels per day later in the decade, according to CERA.

While many of the oil-depletion theories claim that Saudi production will falter, CERA predicts that the oil-rich nation will expand its production by as much as 2 million barrels of oil per day by 2010. In fact, the CERA analysis concludes that OPEC production will expand the fastest - to 45.6 million barrels per day, up from 36.8 million last year.

But because of political uncertainty, it has shaved its estimates for oil production from Russia. Any decline of Russian crude production would also be mirrored by a continued decline in production from other non-OPEC countries, such as the United States.

CERA does not foresee an actual "peak" in oil production. Instead, with huge projects coming onstream on a regular basis, it predicts an "undulating plateau" in terms of supply and demand for decades. An "inflexion" point will come in the third or fourth decade of the century, according to CERA.

"There is no indication to suggest peak oil is imminent," says Daniel Yergin, CERA chairman and author of several books on petroleum.

The main risks to its forecast, says Mr. Yergin, are political and operating changes that could delay expansion. If that happens, CERA predicts that oil production will increase by only 11.5 million barrels of oil per day between 2004 and 2010.

Tuesday, June 21, 2005

Trading Updates: As Oil Soars, Why Does ERHE Stumble?

Yesterday, June 20, was a bad day for most energy stocks we checked; at mid-afternoon, ERHC Energy's partners Devon, Noble, Pioneer, as well as ExxonMobil and ChevronTexaco were all down, as were the more speculative FEEC, HPYD and TDY, while the Canadian energy firm IVAN managed to eke out a $0.01 gain.

With oil straining at OPEC's leash to hit $60 a barrel, why are oil company shares suffering?

It's good to know that the entire industry shared our experience of falling a bit even as the value of our potential reserves - amounting, conservatively, to between 2 billion and 5 billion barrels of Nigerian light crude - rose to stratospheric levels. Good to know - but still incredibly difficult to understand.

The good news on that front is that we expect ERHE to enjoy a decent gain today as the market revisits the issues involved.

Oil is at record highs; ERHC Energy has rights validated by Nigeria and Sao Tome to some of the richest new fields in the world; and to exploit our rights, we have some of the most able partners in the petroleum industry in Devon Energy, Pioneer Natural Resources (Blocks 2 and 3) and Noble Energy (Block 4). So what's to worry?

That kind of factual basis for investment is unavoidably attractive, and soon will out.

Update, 2:10pm, 6/21/06: Markvol1, one of the more reliable posters on this and other boards, lets us know that the JDA has set June 23 as a deadline for the acceptance of its awards letters by the host of companies involved in bid for the Joint Development Zone acreage offered by Nigeria and Sao Tome. There remains a bit of interest in whether Anadarko Petroleum will actually accept its proffered portion of Block 3, which it originally wanted to operate with ExxonMobil but was forced to negotiate for alone due to the tradiness of Exxon's "bid," which never materialized. Most would say they'd be crazy not to accept, but that of they don't it could go to the ERHC Energy/Devon Energy/Pioneer Natural Resources consortium that won operatorship on Block 2. With the caveat that the JDA never does anything when it says it will, here is Mark's note:

Just spoke with Sam Dimka at the JDA. He said that the 14 day deadline that companies have to accept awards started on June 9th as this was the date that the last bit of accpetance letters were sent out to respective winners. This puts the deadline for award winners to accept their awards by June 23 (Thursday). This is in line with what JDA officals have been saying about mid week NEWS this week. Sam said that the JDA will be issuing a Press Release upon formal acceptance of all winners. He said process has been going extremely well. He told me to call back Thursday am for an update. (Mark says) Expect PR's from accepted winners and JDA soon.

Sunday, June 19, 2005

Raging Bull, Investors Hub And The Relentless Search For "Newbies"

Ever notice how ingratiating foul-mouthed posters on Raging Bull become when a "newbie" - a new investor - comes on the scene?

Like wolves falling on a bleeding deer, they offer up reams of "DD" - their so-called "due diligence" - to folks they hope will believe the highly speculative and very suspect information they offer.

Mixed in among them on both boards are a large number of innocent and well-meaning investors who are unaware of the true nature of their companions, or have an inkling but give them the benefit of the doubt. The wolves - some with multiple names and personalities on the mesasqage boards - curry favor for weeks and months, slowly building the confidence of new investors with promises of price explosions and imminent news, full of saccharine sincerity, only to sell against any developments that suddenly lift the share price even as they urge newbies and "friends" to buy.

Meanwhile, a stream of posters leave Raging Bull only to endure the autocratic and arbitrary manipulation of membership privileges on Investors Hub that is the forte of Gigwoof, chcr and whoever else is in charge there today. As on Raging Bull, there's little tolerance for free speech when it comes to a critical evaluation of the real propsects of ERHC Energy.

There's an abundance of it, though, when posters who want to offer rigged data as truth and wild fantasy as evidence for consumption by the newbies. Their new dollars help set up their next kill, as most of them have enough cheaply purchased shares to let them profit mightily as soon as they can run up the price again. Some have even been identified in Barron's Weekly, the respected Dow Jones financial trade paper, as dodgy manipulators who repeatedly take in unskilled investors.

Many thoughtful investors who come to this blog write me to comment that it is a great relief to find a reasoned voice that respects both truth and evidence - and free speech rights - here. While we won't suffer abuse, we do gladly invite posters to express any opinion they like that is germane and cogent on the future of ERHE. The future is by definition beyond our vision, and guesses about it that are either optimistic or pessimistic are just guesses, and we know that here.

So what is my opinion?

ERHE looks good to go for the $1 mark over the next month as awards letters are received (Pioneer, ERHE's partner in Blocks 2 and 3) has already gotten theirs, and we suspect ours is also in hand for Block 4, which we will develop with Noble Energy), production agreements get finalized and the indecision of the awards process that tainted so much of the past two years begins to fade away.

Many investors worry, as they rightly should, about the wisdom of investing any of their hard-earned money in anything that has a Nigerian partner. The country has become so famous for corruption and fraud that the recent efforts to fight it have won international praise.

They should be concerned that a Caymans Island firm with dubious reporting obligations has become the respository of about 42 percent of all the company's stock, and should wonder whether ownership of the corporation and its Gulf of Guinea assets could also be passed to a Caymans Island shell.

They should also be very curious about the relationship between Nigeria's fastest-growing bank, First Atlantic Bank of Nigeria PLC, which has the other eight percent required to complete a Nigerian majority. The bank won its 63 million shares of ERHC Energy from Sir Emeka Offor in November of last year, and the transfer of those shares kept the price depressed for months. But how will those shares vote on a company sale or massive assets transfer? That is an unknown.

We have long felt that Sir Emeka Offor is an honorable man who is nonetheless a very sharp dealer. He maximized the value of his stock by loaning money to the company at high interest rates and paying himself back in shares, as it earns no cash. That has diluted the value of what is, after all, only a paper security until oil starts from flowing from one of our new concessions.

Mr. Offor has been very, very slow to communjicate with shareholders, and often those communications - especially the SEC reports - have required multiple corrections. The company's principal spokesman, John Coleman, is notorious for failing to communicate, and has now revealed himself as a major inside seller of the company's stock.

Meanwhile, Raging Bull posters - and the second-tier people on Investors Hub - assure newbies that Offor is "a billionaire," as though the billion was in dollars and not in Naira, the Nigerian currency, which is subject to wide fluctuations and generally sells for 133 to the dollar. A Naira "billionaire" only has seven million US dollars.

Moreover, it appears that every other aspect of Offor's business had been mortgaged to the hilt to carry him through ERHC's expensive rebirth as a major oil company. His newspaper, banking, and insurance businesses appear to be non-existent, and there is no indication his bedrock company, Chrome Energy Services, is doing well in Nigeria's superheated financial environment.

The problem, of course, is that when any of those businesses leave him gasping for cash, he has to get it from the sale of his stock or from the issuance of new stock.
We're sure he is reluctant to do that, but we have no doubt he will do whatever it takes to survive among the rabid wolves of his industry.

All of this information may sooner or later come out on Raging Bull, probably in the ambience of an teenage food fight presided over by the greedy, illiterate inside crew of fact-dodgers, and whoever posts it on Investors Hub will be earmarked for extinction by the censors there. That is how ERHC On The Move can contribute.

We do believe in the ultimate probity and fairness of Sir Emeka Offor, but we know the investors who manipulate both of those message boards are people of malicious and probably criminal intent and we trust them far less. They need to be ingratiating to newbie to suck in their new dollars so that they call sell into them, leaving the newbies holding a damaged hand. Caveat emptor.

What's up this coming week? We suspect that there will be light volume until the awards letters are confirmed about two weeks from now, and then only burst for the next month or so until the production agreements take shape. It's really a good time if you're a newbie - to invest your money somewhere else for the short term.

Stop back here in early August, when we expect a nice solid move to the upside that will last for a coupl of weeks, decline, and then improve toward the Christmas holiday and sharply improve next January and February. There may be some good buying opportunities this week under $0.50, and I think we are unlikely to see high of greater than $0.57 or $0.58. But, as we said, that's our opinion.

Thursday, June 16, 2005

Trading Updates: Struggling For Daylight

Yesterday's remarkable performance of ERHC Energy (OTC BB symbol: ERHE) - a rise to $0.59 and a fall to $0.50 with a close eight-tenths of a cent higher at $0.54 on 1.6 million shares of volume - provides a clue to the mysterious forces that seem to move this stock in the absence of news.

ERHE rarely moves up simply because the price of oil moves up, or at least that has been true in the past, when we had the distant prospect of winning oil concessions. Now we have oil concessions, and it may be that like the rest of the petroleum industry, our share price, too, will be moved primarily by the price of crude.

If that's the case, though, why did we also fall three cents to $0.50 yesterday, as oil prices moved to near-record levels? And why did it rise with the oil price o $0.59 and then fall despite it?

Another factor supposedly influencing price yesterday was OPEC's decision to produce an additonal 500,000 barrels of oil daily to slake some of the growing demand by summer drivers. Traders were reportedly happy that the OPEC cartel moved the quotas so little, buttressing the demand side of the demand/supply equation.

But the relatively low volume suggests the most important factor in play was the desire by some traders to play 10,000 or 20,000 or 50,000 shares against the couple of cents of mkovement. One who had 10,000 shares and took the whole round trip from a buy at $0.50 to a sale at $0.59 made $900 for his day's work.

And the fact that some former longs are now confessing here and there that they are day-trading a stock they formerly reserved for longer-term movements is evidence that the quality of the stockholder base, once strong and loyal and very enthusiastic, is rapidly deteriorating into a penny-ante free-for-all.

Well, we expect they will get their penny today. We see the likelihood of ERHE moving within a four or five-cent range all day, and closing perhaps a penny higher.

That pace may continue through the end of next week, with steadily dwindling volume, but I believe we are still on target for a $1 share price before the end of the month. Let's hope I won't have to eat those last few words!

Update, 3:12pm EDT, 6/16/05 The price is $0.54 as trading has moved in a four-cent range from $0.525 to $0.56 all day on lackluster volume of 540,900 shares.

Wednesday, June 15, 2005

Trading Updates: Will We Bounce This Time?

We felt pretty strongly that we'd enjoy a strong bounce from the $0.50 level we reached last week, and we did. But we have some doubts that it will happen again.

With no official news from ERHC Energy (OTC BB symbol: ERHE), and the news of the awards receding a little further from memory every day, and buying interest apparently drying up, we may be the first oil company with billions in prospective oil assets to enjoy a share price that is well under the cost of a Hershey's bar.

Today we learned on PalTalk that many of the so-called "longs" on the Raging Bull board who had been urging others to buy the stock got together and dumped it into the rising sales volume on May 31 and afterwards.

We warned you about these vicious manipulators, people like the walldog0, oldintheway3, trashtalktx, the feces-obsessed swingingk, CheCardinaR, awlright, tryagain21, thedane, oiljunior, and others, but they have taken over the Raging Bull board and pushed out any honest investors so that they alone can "train" the newbies in the fine art of learning how to lose money to them.

These slimy dirtbags of the investment world are destroying the market for ERHE, and lead me to believe that its future is grim unless the SEC does step in and probe their trades, as so many have urged it to do.

Meanwhile, trading today ought to pause from the recent decline, perhaps recover a few cents, and end up in the green, albeit on volume that once again may be limited.

Update, 8:06pm EDT, 6/15/05: We closed in the green at $0.008 on volume of 1,607,300 shares; the Bid and Ask at the close were $0.535 x $0.54. We were helped by a token expansion of daily production ordered by OPEC and rising oil prices.

Update, 1:55pm EDT, 6/15/05: We are enjoying a little spurt in volume to the 1.5 million range, but we are where we started the day, at $0.53.

Update, 1:55pm EDT, 6/15/05: The price is $0.55 after hitting a high of the day of $0.59 about a half hour ago. The low this morning was $0.50, so a nine-cent swing must have pleased the day traders, who are now cashing out. Volume is 1.2 million shares.

Update, 12:13pm EDT, 6/15/05: We're up at $0.58, the Bid, and the Ask is $0.585, so for the time being we've recovered most of the past two days' losses. Volume is 849,429 shares.

Update, 12:00pm EDT, 6/15/05: The price is moving up and is now at $0.559, but there's a three-cent gap between the $0.55 Bid and the $0.57 Ask, down from 3 cents a moment ago. Volume is strengthening to 738,509 shares.

Update, 11:02am EDT, 6/15/05: We climbed a bit, to $0.54, and the Bid is now at $0.535 and the Ask at $0.54, on 424,042 shares of volume.

Tuesday, June 14, 2005

Trading Updates: Back In The Doldrums

The price of ERHC Energy (OTC BB symbol: ERHE) slipped at the open today, probably because traders have little idea where it may go in the near term.

Following the May 31 awards from the Nigeria-Sao Tome and Principe Joint Development Authority that have given ERHC a share in what could be as much as 5 billion barrels of oil, the price has largely suffered due to a lack of positive news from the company and necessary selling to raise funds for higher signature bonus fees.

Now, however, there is no particular reason for the price to fall - or to rise, either, discounting the value of its new assets.

Update, 4:42pm EDT, 6/14/05: We closed off $0.043 on 998,089 shares at $0.532, a loss of about 7.5 percent. The high of the day was a miserable $0.57, while the low is in dispute. Both the Pink Sheets site ( and the New York Times report that the low of the day was $0.53, but the Times' intraday chart and some of the day traders on Raging Bull say they saw trades under $0.50 and a recovery to $0.53. It again appears that nothing will save us in the short term from another long, death-defying dive to the $0.40s, and I'm hoping my pitch to the Times editors will produce a story that helps out a bit. Give it time, and the assets will show.

Update, 10:31pm EDT, 6/14/05: We've slipped another cent to $0.555, the Ask, with the Bid at $0.551 and volume now 206,317, indicating renewed momentum.

Update, 10:12pm EDT, 6/14/05: The price is $0.565 still, but the Bid is lower at $0.56 and the Ask is lower at $0.565. Volume remains tepid at 122,517 shares. The bright side of that is that we moved 17.65 percent last week on low volume.

Update, 9:43pm EDT, 6/14/05: The price is a four-digit one, $0.5651, which usually indicates buyer interest in large blocks. I don't know why, but I kept having this funny feeling all night and this morning that we were headed for $0.90 very soon. Right now, though, the Bid is $0.565, the Ask is $0.57, and volume is a paltry 21,280 shares.

Monday, June 13, 2005

Trading Updates: After The News

The news of the past week - articles from Upstream, Energy Intelligence Update, and an interview with Ali Memon that ran in This Day Online all contributed little to our knowledge of ERHC Energy (OTC BB: ERHE) and its prospects in the Gulf of Guinea.

The interview, in particular was disappointing. Instead of asking why the huge sell-off occurred just after awards, or how much of the $54 million in increased signature bonus fees ERHC would be asked to bear, or clarifying exactly what participation we will enjoy in the additional acreage, the interviewer focused on rhetorical questions about our technical competence and why we won awards. There was one article that defended the awards while also defending politicians, which tainted it somewhat.

The overall effect, as we saw on Friday, was generally negative, and that lingering sour taste is likely to remain in the mouths of traders as this week's market action gets underway. Thus, we anticipate another day of wandering, pointless ups and downs, much like the nonsense posted on Raging Bull. That could mean a several-cent swing in both directions as the day wears on, probably on volume in the 1.3-million range - nothing to write home about.

Update, 7:12pm EDT, 6/13/05: We closed at $0.575, off $0.015, on low volume of 576,882 shares. Buying interest has pretty much evaporated, and won't appear again until significant news arrives. The letters of acceptance are not significant, but the Production Sharing Agreements with our partners and the JDA are. Once those are complete, and when drilling begins next year, we will see substantial gains.

In the meantime, any near-term buying frenzies are going to be strictly buyout-related. The latest note from mutwadadi, received yesterday, did not mention it again.

Update, 2:01pm EDT, 6/13/05: Just a lot of aimless up and downs today, all within a narrow $0.04 range. Look for more of the same towards the close.

Update, 8:25am EDT, 6/13/05: The Bid and Ask are both $0.59, which is typical of the craziness lately.

Friday, June 10, 2005

Trading Updates: Let The Gains Begin!

Yesterday's stellar performance of ERHC Energy (OTC BB symbol: ERHE), I believe, is only prelude to some very significant gains between now and the end of June, when I expect the stock to be selling in the $1.30 range.

Thursday's 17.65 percent recovery, a gain of $0.105 from the last Extended Hours price on Wednesday, signalled the end of the capital accumulation stage for the company and the beginning of the share price appreciation stage for investors.

As painful as it was for some investors who foolishly sold on Wednesday when the sinking price scared them out and then struggled to reaccumulate as it rose once again yesterday - despite plentiful warnings here - it was a necessary step to aid our participation with our big-league partners in future discoveries in the Nigeria-Sao Tome Joint Development Zone, where we were awarded vast tracts of oil-rich waters in the Gulf of Guinea on May 31.

We nonetheless expect a slight retrenchment this morning, perhaps of five cents or so, but renewed buying interest through most of the day and a better close than we enjoyed on Thursday.

Update, 3:08pm EDT, 6/10/05: With 1,640,000 shares changing hands, we stand at $0.585 going into the final hour of trading. The Bid is $0.58 and the Ask is a $0.585.

The significance for ERHE investors of the decision not to grant debt relief to Nigeria and Sao Tome is that both those nations will have to be more focused on earning royalties from projects such as those in the Joint Development Zone. The fact that they won't get full debt relief, however, doesn't foreclose the possibility of some debt relief down the line. The decision also indicates the United States believes that Nigeria and Sao Tome are likely to prosper mightily in the future from their oil resources, and that, too, is good for ERHC Energy.

Update, 1:25am EDT, 6/11/05: We closed at $0.59 Friday, off $0.025, on volume of 1,927,071. I was pleased with our performance today as it made clear that few are willing to sell at at the phenomenally low prices that prevailed last week. We came back from a five-cent deficit and closed near the open after a 17.65 percent gain yesterday. The good news of ERHE ought to be amplified when the letter of acceptance is made and then again when the PSA is signed.

Update, 2:06pm EDT, 6/10/05: At $0.575, we should hold. I missed the 12:16 low of the day just above $0.56 in my last post, so I would not expect to revisit that price. The Bid and Ask are $0.575 x $0.58. By 3pm, we ought to be off for the races to close near the high of the day..

Update, 1:57pm EDT, 6/10/05: We're off $0.035 now, after falling five cents from yesterday's close at 12:16. Volume is 1,489,400 and the Bid is $0.575 and the Ask $0.59.

Update, 12:24pm EDT, 6/10/05: The anticipated retrenchment is now underway, and the price is $0.581, the Bid, with the Ask at $0.585 and volume of 1,313,400 shares. We may have two cents to go before we start back up into the green towards the close.

Update, 10:29am EDT, 6/10/05: A gap has opened, with the price $0.63, the Bid $0.62, and the Ask $0.63 as volume reaches 502,317 shares.

Update, 9:52am EDT, 6/10/05: The price is $0.63 after a brief run to $0.645, and volume is a solid 440,271. The Bid and Ask are $0.63 x $0.635.

Word comes from the New York Times that neither Nigeria nor Sao Tome scored on debt relief. The countries that did are: Benin, Bolivia, Burkina Faso, Ethiopia, Ghana, Guyana, Honduras, Madagascar, Mali, Mauritania, Mozambique, Nicaragua, Niger, Rwanda, Senegal, Tanzania, Uganda and Zambia. Almost all are in Africa.

Thursday, June 09, 2005

Trading Updates: Sales Taper Off And A Small Gain Appears

The six long days of selling that finally came to end Wednesday are the price of victory. Victory, you say? With losses like these in our portfolios?

Our portfolios are not our investment; the companies we choose to put our money in are the investments. It's sometimes worthwhile to remember that distinction, particularly when a company you resolutely believe in suffers a sharp downturn.

I look at what has happened over the past six days rather differently from others, because I knew what was happening: We simply had to sell shares to get the money we need to pay signature bonuses, and as I started telling readers last week, we had to sell at least 40 million shares before the price would start to rise again. Then word came Wednesday morning that ERHC Energy spokesman John Coleman had also registered his intent to sell 3,550,000 shares, and the volume had to reflect that number of shares as well.

It all came together Wednesday. After a long morning of selling that saw the price fall to $0.455 at one point, we reached the requite number of shares and began to rise, closing in the green at $0.51 for the first time since June 1. But a burst of selling at the end of the day - some 193,000 shares in 24 trades, tempered the optimism. There are still lots of shares to sell, but much more buying interest all the same.

In a note from our favorite poster, mutwadadi, on Wednesday, he mentioned a time frame for a rumored buyout that he is hearing in Nigeria. That is just speculation, and he doesn't endorse or disavow it, but it's another indication that our doldrums will not last for long.

Don't look for quick, massive gains, but look for backsliding and then gains today and tomorrow, gains all through next week, and then for several weeks to come. Also look for at least two one-day price reversals during that time, probably of $0.10 to $0.15 each and possibly beginning as soon as Friday, and look for resumed buying into the $1 range through the beginning of July.

The exciting part is just beginning. There's not much of a crowd around now, and we will start quietly, but steadily, to realize our "minnow's" full potential.

Update, 4:05pm, 6/9/05: We closed at $0.615, a nice $0.105 gain for the day, and an improvement of $12,600 for the ERHC On The Move portfolio of 120,000 shares with an average cost of $0.43.74.

Update, 3:50pm, 6/9/05: With 10 minutes to we're at $0.625, the Bid, and the Ask is $0.63. Volume is a healthy 3,023,000 shares.

Update, 3:38pm, 6/9/05: The bid is now $0.60, the Ask $0.605, and the price is $0.60 with 2,720,500 shares sold.

Update, 3:03pm, 6/9/05: The price is $0.60 now, the Ask, with the Bid at $0.595. We're up 17.65 percent on the day, or $0.09. Volume is 2,506,00 shares.

Update, 1:43pm, 6/9/05: The Bid is $0.59 and the Ask is $0.594 as the price slips to $0.59 from $0.595. Volume is 1,877,300 shares.

Update, 12:56pm, 6/9/05: The Bid is now $0.58 and the Ask $0.59, while the price is $0.58 on 1,308,500 shares.

Update, 12:40pm, 6/9/05: The Bid is now $0.57 and the Ask $0.575, with the price at the Bid and volume at 1,224,500 shares.

Update, 11:54am, 6/9/05: Today's gains are proving remarkably resilient so far. The price is $0.569 after just dropping from $0.57. The Bid is $0.56 and rthe Ask is $0.569, and volume is now 1,023,600.

Update, 11:00am, 6/9/05: As anticipated, we have seen a nice gain this morning on low but regular volume of 670,688 shares. The price is currently $0.545 after hitting $0.56 a minute or two ago. The Bid is $0.545 and the Ask is $0.55.

We can't guarantee all the gains will stick, but we should close in the green once again Thursday afternoon..

Wednesday, June 08, 2005

Trading Updates: Selling Spree May Be Near An End

With nearly 41 million shares traded since the announcement of awards on May 31, the selling spree that has taken the share price of ERHC Energy down from a recent high of $0.89 to yesterday's close at $0.497 should be about over, and there were several sharp bounces from the $0.50 resistance level yesterday to buttress this claim.

Today's action may be more of the same, or it may finally turn green for good as the price heads back to levels we anticipated upon becoming the "great winner" (as one newspaper article described us) of the Nigeria-Sao Tome and Principe Joitn Development Authority's second round of Gulf of Guinea Joint DDevelopment Zone oil concession awards.

ERHC On The Move, which holds 120,000 shares long in its portfolio at an average price of $0.4374, has seen some $45,000 in gains evaporate in the past seven days of trading but remains unshakeably confident that even if the price goes to $0.28 in the near term (that was last year's low), it will seek higher ground well above a dollar within the month. We don't expect it to go that low, nor even test $0.40 again, before that spike occurs.

Update, 3:59pm, 6/8/05: Scratch the $0.55 close, but it looks like we're going to be in the green when the day ends a few minutes from now. Volume is 2,185,100 shares and the Bid and Ask are $0.505 x $0.51.

Update, 3:45pm, 6/8/05: Some 2,732,300 shares have traded, and the price is climbing away from today's low of the day, $0.455, and now at $0.515 we are in the green as the close draws near. The rebound is consistent with the volume of selling that had to occur to raise cash for signature bonus fees, so the upturn could head us pretty far north of here. We should probably look for a $0.55 close.

Update, 2:30pm, 6/8/05: The price is $0.49, the Ask, with the Bid at $0.485.
Volume has reach 2,013,100 shares.

Update, 11:50am, 6/8/05: ERHC Energy officer John Coleman, a spokesman for the company, has filed a Form 144 with the SEC to allow him to sell 3,550,000 shares as of June 3, 2005. These sales would not be related to the sale of company shares, but certainly helped drag the price down. We now await a Form 144 from Chrome Energy, if indeed it is required as a Grand Caymans Island offshore to file. GEECF, which won part of Block 3 through its subsidiary Sahara Petroleum Exploration, recently terminated its filing obligations by registering as a Caymans offshore. No such filing has been made by ERHC Energy, however, but the 310 million shares owned by Sir Emeka Offor, our Nigerian chairman and a Naira billionaire (133 to the dollar), are all controlled now by Chrome, in which he is the sole stockholder.

Update, 11:42am, 6/8/05: The price is $0.487, the Ask, with the Bid at $0.48 and 1,738,900 shares traded.

Update, 10:06am, 6/8/05: The price is .475, after hitting a low of $0.455 shortly after the opening and dreaking through the $0.50 resistance in a definitive way. Bid and Ask are $0.475 x $0.48. Volume is a very brisk 1,102,100 shares, a good thing for longs as the selling grows closer to an end.

Update, 8:50am, 6/8/05: The bid is $0.495 and the Ask is $0.495 and the Ask is $0.499, while yesterday's closing price was $0.497. Pioneer Natural Resources and Noble Energy have both filed 8-Ks indicating ERHC Energy as their partners in the successful consortium bids for Gulf of Guinea blocks in the Joint Development Zone. Presumably, ERHC Energy will also soon file an 8-K, clarifying its obligations with respect to the signature bonus fees and its participation in the award of additional acreage above its preferential rights.

Tuesday, June 07, 2005

Trading Updates: Latest Hit Is Prelude To Gains

Strong gains are near for ERHC Energy (OTC BB symbol: ERHE), now that most of the money needed for higher signature bonus payments to the Nigeria-Sao Tome and Principe Joint Development Authority has been raised and the stock is near its strongest resistance levels at $0.539, Monday's close. Between $0.50 and $0.51, most technical analysts say, the stock is likely to rebound sharply, as much as 20 to 25 percent in a single day of trading.

Here is how the latest chart looks:,uu

This anticipated turnaround comes after five days of trading following the company's winning of vast swathes of oil-rich ocean acreage in the Gulf of Guinea has taken the share price down more than 25 cents from recent highs. Most of the selling is attributed to the need to pay some $29 million in higher signature bonus fees agreed upon by ERHC Energy and its Block 2 partners, Devon Energy amd Pioneer Natural Resources, and Block 4 partner, Noble Energy.

Update, 11:40am EDT. 6/7/05: Close to the lunch hour, the price is $0.50, the Ask, and the Bid is $0.497, with volume cresting to 4,752,600 shares. We had been in the green for a short time at $0.54, but fell again. Our guess is the company is continuing to raise the substantial cash it needs to pay bonus fees and start drilling. We econtinue to expect strong gains before the end of the week, perhaps to the $0.79 range. We hesitate to call the botttom of the current decline, but it appears to be in the present $0.50 range.

Update, 9:50am EDT. 6/7/05: The price is $0.48, the Bid $0.47 and the Ask is $0.49 as volume soars to 1,803,600. Much like the impeachment brouhaha, the effort by both parliaments to gain JDA oversight would thwart the purpose of the Abuja Declarations and probably fall victim to inertia.

Update, 9:44am EDT. 6/7/05: The volume has shot up to 1,367,900 as the price moves back to $0.515, the Ask, with the Bid at $0.51.

Update, 9:38am EDT. 6/7/05: The price is $0.495 as ERHE loses $0.034 out of the box on a brisk 786,915 shares. The Bid now moves back $0.495 and the Ask $0.496. Overnight news from Nigeria indicates the parliaments of both Nigeria and Sao Tome want an oversight role in the Joint Development Authority's dealings, including the right to review block awards just made. That's yet another indication ExxonMobil is using its financial and political muscle to undo the round two awards of five blocks to ERHC Energy, its partners, Anadarko and a bevy of Nigerian independent operators.

Update, 7:58am EDT. 6/7/05: The Bid is $0.537 and $0.539 is the Ask as 8am extended hours of trading open.

Monday, June 06, 2005

Trading Updates: EEL Hits 150 Pence In London Trading; Where Is ERHE Going?

Equator Exploration (EEL, on London's AIM market)), a British firm headed by former ERHC associate and European auto racing entrepreneur Wade Cherwayko and South African gold miner Sir Sam Jonah that won 15 percent of Block 2 with its partner, Indian oil giant ONGC Videsh, will open at 150 pence in London a little while from now.
That advance comes after EEL alerted investors Thursday (see press release below Updates) that it had won a 15 percent allotment in Block 2 of the Nigeria-Sao Tome and Principe Joint Development Zone - far less than the 35 percent it was rumored to have won before awards were announced. The stock was trading as low as 73.5 pence in the weeks before the June 1 awards.

In contrast, ERHC Energy (OTC BB symbol: ERHE), which won 25.64 percent of the entire acreage offered in the round two JDZ auction of five blocks, may open at $0.60 or lower on the Over the Counter Bulletin Board after an extended selloff from a pre-awards high of $0.89. a price lower than the 52-week high of $0.95 that came when hoped-for awards were due last year but did not come.

Some say the difference in price is due to EEL's having $100 million in cash as opposed to cashless ERHC Energy's estimated $8 billion in oil rights.

So why are the miniscule rights of EEL pushing up its stock price when despite the mammoth rights won by ERHC its share price has been pushed down by 32.5 percent?

ERHC On The Move believes the answer is that ERHC Chairman Sir Emeka Offor has been selling 25 million shares he purchased for $0.40 kast Fall to raise cash to pay an additional $25 million in unexpected signature bonus fees.

The extra fees resulted from the unwillingness of Sao Tome and Principe Presdent Fradique de Menezes to accept lower bonus fees than higher bidders had offered, no matter how good their technical bid was.

That move netted his country an additional $21.6 million - its shares of the 54 million increase based on their 60:40 sharing arrangement - but apparently exceeded the budget of ERHC Energy and its partners, Noble Energy in Block 4 and Devon Energy and Pioneer Natural Resources in Block 2 and 3 - for the bonus fees, which were raised after a planned payment of $57 million for Block 4 and $50 million for Block 2 were found unacceptable by Sao Tome and Principe during three hellish weeks of political resignations, firings and recantations generated by the awards.

ERHC On The Move believes that it will take another couple of weeks to raise the total of $29 million ERHC Energy must pay to participate with its partners in the exploration stage of development - unless, that is, investors react even more strongly to the very upbeat article in Saturday's Houston Chronicle about the block awards (see story in post below, "Unknown hits offshore jackpot; Obscure local oil firm is chosen to work leases off Nigeria, São Tomé."

More cash, higher volume, higher price and excited investors is what we need right now; all are in the works.

Update, 6:02am EDT, 6/6/05: I began working at a new job today, so I have been unable tpost as usual. We lost $).0615, or 10.17 percent in today's action, closing at a Bid of $0.537 and an Ask of $0.539. The final volume was 3,579,642 shares.

Update, 11:32am EDT, 6/6/05: The price is $0.59, the Bid, and the Ask is $0.595 as we approach a million shares traded. Volume is currently 972,530 shares.

Update, 10:21am EDT, 6/6/05: With 681,347 shares sold, the price is $0.60, the Bid, and the Ask is at $0.61. No one has yet produced evidence that ERHC Energy will not have to pay the increased signature bonus fees, but Mabenn has an interesting Comment (below this post) on why they may be less than we thought.

Update, 9:44am EDT, 6/6/05: ERHE opened at $0.61 on the good news from the Houston Chronicle but promptly fell to $0.60 on volume of 452,267 shares. The Bid and Ask are $0.60 x $0.605.

Update, 7:54am EDT, 6/6/05: The Bid is $0.596 and the Ask $0.60 before trading begins in the extended hpurs market, where ERHE rarely trades. Investors await the interest of the market following the terrific story on ERHC Energy's "jackpot" in Saturday's Houston Chronicle by Washington staff writer David Ivanovich.

Here is the EEL press release issued last Thursday:
2 JUNE 2005


(Equator, or “the Company”)

Equator - ONGC Videsh Consortium Awarded Allocation In Block 2 Of Nigeria-São Tomé Joint Development Zone (“JDZ”)

JDZ Block 2 is adjacent to Nigerian Block OPL 246 which hosts the 800 million barrel Akpo discovery and another series of discoveries totalling 600 million barrels

JDZ Block 2 will be operated by major U.S. independents Devon Energy and Pioneer Natural Resources

The Nigeria-Sao Tome and Principe Joint Development Authority (“JDA”) announced on 31st May 2005 that a 15% interest in the highly sought after Block 2 of the Joint Development Zone has been awarded to a consortium comprising Equator, an oil and gas company with exploration interests in the highly prospective waters of the Gulf of Guinea, and ONGC Videsh (“OVL”), the international exploration subsidiary of Oil and Natural Gas Corporation of India (“ONGC”), India’s largest energy company.

Based on a 3D seismic survey funded by Petroleum Geo-Services (“PGS”) and Equator in 2003, recoverable reserves are estimated at over 1 billion barrels. JDZ Block 2 is adjacent to Nigerian Block OPL 246 which hosts the 800 million barrel Akpo field and another series of discoveries totalling 600 million barrels. A consortium, led by U.S. independents Devon Energy, Pioneer Natural Resources and ERHC Energy Inc., was awarded a 65% interest in JDZ Block 2 and will act as operator.

Under terms of the JDZ joint bidding agreement between Equator and OVL (“the OVL/Equator Venture”), any allocations will be shared on a 60%-OVL and 40%-Equator basis. This results in a net 6% participation in the block for Equator’s account. The signing bonus for JDZ Block 2 is US$71 million. Equator’s share of the signing bonus is US$4.3 million which will be funded from Equator’s existing cash reserves.

Mr. Wade Cherwayko, CEO of Equator stated “We are pleased to be among the small number of companies worldwide to be awarded participation in a block in this highly prospective deep water exploration basin offshore Nigeria and Sao Tome. The allocation further expands Equator’s portfolio of high potential exploration acreage in the Gulf of Guinea, the world’s premier deep water basin.”

The JDZ was created through an agreement between the governments of Nigeria and Sao Tomé and Principe in 2001 whereby revenues derived from the JDZ will be shared 60:40 between these governments respectively. There were 5 blocks (Blocks 2, 3, 4, 5 and 6) on offer in the most recent licensing round, with Block 1 having been signed earlier this year by a consortium which comprised ChevronTexaco, ExxonMobil and Energy Equity Resources, for a signature bonus of US$123 million.

The OVL/Equator Venture had submitted bids for two blocks in the JDZ, namely Block 2 and Block 4. OVL’s parent company ONGC has considerable experience in deepwater drilling, and is credited with successfully drilling the second deepest well in the world in water depth of 3008 meter by its drill ship Sagar Vijay, on the east coast of India. ONGC has one of the world’s largest deepwater drilling programmes underway in offshore India.

For further information, contact:

Wade Cherwayko, Chief Executive Officer
020 7235 2555

Bobby Morse / Ben Willey, Buchanan Communications
020 7466 5000

Background information:


Equator ( was founded in December 2000 and listed on the Alternative Investment Market of the London Stock Exchange in December 2004, raising £60 million to fund its exploration activities in the highly prospective waters of the Gulf of Guinea.

Equator’s objective is to build a diversified portfolio of exploration, appraisal and production assets in the region. The Company is focusing its efforts in West Africa, in particular the JDZ, the territorial waters of Nigeria where it recently acquired rights in Nigeria Block OML 122 and in São Tomé and Príncipe where Equator has been active since 2001. Equator is also currently evaluating other opportunities in West Africa, including Nigeria, Congo and Equatorial Guinea.

In recent years West Africa has become one of the most prolific offshore deepwater exploration and production regions. Deepwater discoveries in Equatorial Guinea and Nigeria, coupled with hydrocarbon finds offshore Gabon, suggest geological extensions into the JDZ and the territorial waters of São Tomé and Príncipe. In addition, seismic data for the region indicate widespread prospectivity in the waters of the JDZ and São Tomé and Príncipe.


ONGC Videsh Limited (OVL) is the international arm and a wholly owned subsidiary of the Oil and Natural Gas Corporation (ONGC), which is the fully integrated National Oil Company of India. ONGC Group (which also comprise of a 12 MMTPA refinery at Mangalore) had a turnover of more than $10 billion in the financial year 2004 and made a post tax profit of over $3 billion. The company has a market capitalization in excess of $30 billion.

Currently, OVL has interests in 15 oil and gas projects, which are located in 12 countries including: Egypt, Qatar, Vietnam, Sudan, Russia, Iraq, Iran, Myanmar, Libya, Australia, Ivory Coast and Syria. The Vietnam project is producing natural gas and the Greater Nile Oil Project in Sudan is producing oil. The project in Russia is in advance stages of development and this project is expected to commence oil production in the fourth quarter of 2005. OVL is a joint operator in the GNOP project in Sudan and is operator in Farsi in Iran. The projects in Iraq, Iran and Syria are in various stages of exploration. In the Myanmar project a significant gas discovery was made in January 2004.

The current production of oil and gas of ONGC in India is in excess of 53 MMTPA (O+OEG) and current production of the company from its foreign oil & gas acreages is close to 4 MMTPA (O+OEG). The company has aligned strategic plans to elevate the current production levels from its overseas oil & gas assets to reach 20 million tons of equity oil and oil equivalent gas by year 2010, through strategic acquisitions of overseas oil and gas assets.