There was also a story about the development in UpstreamOnline this morning:
ERHC and Pioneer head for JDZ
July 7, 2005 By Upstream staff
Houston-based ERHC Energy and its partner Pioneer Natural Resources are set to accept an offer for Blocks 2 and 3 of the Joint Development Zone between Nigeria and Sao Tome & Principe.
A consortium of ERHC, Pioneer and Devon Energy were awarded interests in the blocks in May.
However, Devon declined the bid award due to the low interest it would receive as one of three consortium partners.
An EHRC spokesman said: "We understand Devon's need for a greater interest in Blocks 2 and 3. Pioneer and ERHC will now proceed to negotiate the joint operating agreements and production sharing contracts."
In Block 2, the Joint Development Authority awarded the consortium a 65% stake inclusive of ERHC's 30% signature bonus free interest, and in Block 3, a 25% interest inclusive of ERHC's 20% signature bonus free interest. Pioneer will be the operator for Block 2.
The loss of Devon Energy's participation in the two blocks may reduce the prestige of the consortia assembled by the company in the blocks, but the company said it will not impair plans for exploitation of the block.
The news was unexpected, but may provide a partial explanation for the price decline that has hammered investors for since the awards. The news is especially ironic in light of the reports from former U.S. Ambassador to Nigeria that ExxonMobil may similarly pull out of its participation in Block 1 with Chevron and two minor players.
Here is the press release, which comes from a professional public relations firm and does not mention company spokesman John Coleman.
ERHC Consortium Proceed in Blocks 2 and 3
Thursday July 7, 9:01 am ET
HOUSTON--(BUSINESS WIRE)--July 7, 2005--Houston-based ERHC Energy Inc. (OTCBB:ERHE - News) announced today the company is proceeding with consortium partner Pioneer Natural Resources in Blocks 2 and 3 of the Joint Development Zone, in which the Nigeria-Sao Tome and Principe Joint Development Authority awarded the consortium interests on May 31, 2005.
The consortium originally included Devon Energy as the third consortium partner, which has since announced its decision to decline the bid award due to the low interest the company would receive as one of three consortium partners.
"We understand Devon's need for a greater interest in Blocks 2 and 3. We will miss the excellent working relationship we had underway. Pioneer and ERHC will now proceed to negotiate the Joint Operating Agreements and Production Sharing Contracts," said Ali Memon, President and CEO of ERHC.
In Block 2, the JDA awarded the consortium a 65 percent interest inclusive of ERHC's 30 percent signature bonus free interest, and in Block 3, a 25 percent interest inclusive of ERHC's 20 percent signature bonus free interest. Pioneer will be the operator for Block 2.
ERHC has accepted the awards of its pre-existing interests in the five blocks in the Joint Development Zone.
Based in Houston, Texas, ERHC Energy Inc. is an oil and gas company focused on exploration in the Gulf of Guinea offshore West Africa. For more information, visit the company's website at www.erhc.com.
The statements in this document are forward-looking statements made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. These statements and the business prospects of ERHC are subject to a number of risks and uncertainties that may cause actual results in future periods to differ materially from the forward-looking statements. These risks and uncertainties are described on Forms 10-Q and 10-K filed with the Securities and Exchange Commission.
Contact:
Ward Creative Communications, Houston
Shanta Mauney, 713-869-0707
smauney@wardcc.com
or
Deborah Buks, 713-869-0707
dbuks@wardcc.com
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