U.S.-based oil player for an undetermined sum.
Most feel the buyer is Pioneer Natural Resources; I lean towards Noble Energgy, since its PowerPoint slide published here Thursday rveealed they had already "ageed to obtain" 60 percent of ERHC Energy's 25 percent interest in Block 4, where the two jointly won 65 percent of the block.
Remarkably, interest in ERHC had waned to the degree that none of the usual posters nor myself had visited the UpstreamOnline site on Thursday night to see if there was any news about the company after the site was updated at about 7:13pm. For months, several posters were always poised to visit the site exactly at the moment of update and to transmit the latest news to this blog and the I-Hub and Raging Bull message boards.
For the first time in memory, though, no one bothered to check the UpstreamOnline Website Thursday night, and what may be the biggest story of our history was released. There is no indication that even a single investor saw it all day Friday - except that this blog, late in the day, suggested that the sharp price movement of short duration (attributed by some to a 100K purchase by markvol1) we saw late in the day might have presaged a larger event, and we then suggested readers "keep an eye peeled for news this weekend."
As it turns out, there was plenty of news, but only a few have heard it.
And, if only the handful of survivors from the post-awards decline are aware of the buy-out news, there will likely be little movement as a result on Tuesday morning, and any price rise will quickly be eaten up by the aggressive selling and accumulation of cheap shares that has driven the price down since we won the awards on May 31.
It is critical to the share price that Reuters, Dow Jones and other premier organizations of the financial news industry such as Bloomberg News do reporting of their own on the buy-out offer, so that investors and the public can participate. Several ERHC On The Move readers are contacting news organizations this weekend to try to get the story out to a wider audience on Monday and Tuesday. If they fail, we won't advance a single dime even with this great news.
We also note that since Barry Morgan of Upstream reports the offer as fact, and not as rumor - he usually identifies the difference clearly - there may be an SEC reportable event occurring. If so, that could also generate buying interest.
Finally, here is the UpstreamOnlinestory from prize-winning industry writer Barry Morgan:
ERHC offer causes shift in the deep
ERHC Energy is considering an offer by a US player to purchase a controlling stake in the company, which could alter the balance of corporate power in a recently concluded deep-water licensing round in the Gulf of Guinea, writes Barry Morgan.
US-listed ERHC Energy's chairman Emeka Offor, the Nigerian businessman who also heads up Nigerian independent Chrome Energy and is a major stakeholder in ERHC, convened a board meeting last week in which directors voted to "consider the offer on the table".
ERHC, which has acquired substantial acreage positions with partners Devon Energy, Pioneer Natural Resources and Noble Energy in the Joint Development Zone (JDZ) organised by Sao Tome&Principe and Nigeria, has similar ambitions in the Exclusive Economic Zone (EEZ).
Contact has been established with a mid-sized US company angling to take control of the company.
Despite a possible name change, it is understood ERHC's ambitions to become a regional player will survive any possible deal and that Nigerian interests will retain some of the equity as the JDZ and EEZ deals go forward.
Offor's stake has been reduced in recent weeks and is now believed to be around the 43% mark. Offor, along with other Nigerian shareholders, could collectively decide to maintain a controlling interest, but indications are the temptation to sell is gaining ground among major shareholders, most of whom are private US investors.
It is believed Devon or Pioneer both could be first in line if an ERHC stock sale is considered, given their existing partnership in the JDZ.
The Joint Development Authority this week reiterated its intent to sign PSCs before September for all five blocks, although indications are it would wish to get blocks 2, 3 and 4 to signature before then.
Signs are that technical difficulties over Block 5 may take some time to resolve and officials are loath to let signatures slip on the other licences.
Farther south, Sao Tome&Principe had aimed before the end of the year to license acreage falling under its part of the EEZ, but growing political tensions amid calls for early polls may cause delay.
Moreover, several parties are poised to defend mutually contradictory preferential rights claims in the EEZ.
Equator Exploration and its subsidiary Aqua Exploration claim the sole right to acquire 100% working interest in two blocks of its choice in the EEZ.
This appears to fly in the face of claims by ERHC Energy to have a similar exclusive deal for a 100% stake in blocks 4 and 5 along with rights to a 15% stake in EEZ blocks 1, 2&3.
There is one statement we have to examine carefully. Morgan says that Nigerian interests control the stock, and with Offor's 43 percent and First Atlantic Bank of Nigeria's 9 percent, that is true. But he adds that "the temptation to sell is gaining ground among major shareholders, most of whom are private US investors."
That would seem to indicate the only known U.S. shareholders with substantial blocks, Noreen Wilson and Phil Nugent, want Offor to sell the company, and we can speculate that they may have brought the bidder to the table. If so, would they then float this trial balloon to raise the share price?
Of particular interest is the line that "Offor's stake has been reduced in recent weeks," validating the claim we made here that the company chairman has been selling in order to raise cash to meet obligations related to the additional acreage and bonus fees the company must pay to participate in Blocks 2, 3 and 4 of the Nigeria-Sao Tome and Principe Joint Development Zone.
As we have said many times before, we believe our debt-free company's stock is worth $6 a share.
The story's hint that there is trouble in the Sao Tome EEZ is consistent with the fierce infighting that is going on in Sao Tome & Principe over future exploration rights in the STPEEZ. Parliament there has resolved to put off the licensing round for two years as it considers changes in its petroleum tax and royalty laws and the circumstances under which it will conduct that round.
We do not know how Equator Exploration can make the kind of claim it reportedly has, as there is a substantial body of documentation in contract and in the Abuja Declaration validating ERHC Energy's rights to 100 percent of two blocks in the STPEEZ, which are indeed subject to a prior pick by Equator of similar acreage.
In my opinion, Sao Tome and Principe will eventually resolve the issue by dramatically reducing the size of blocks offered if the law permits them a way to do that.
With the 20-20 clarity of hindsight, it's interesting to look back at Friday's trading, when we ended up down $0.15 after momentarily soaring to $0.47. On Friday, the very last regular-hours trade of the day was the sale of 25,000 shares at $0.42,
and that seemed to be the final trade in an apparent block of about 150,000 shares that was sold off in the last five minutes, when buying totaled only 28,000 shares. In two trades shortly after the close, however, at 16:00:24 and 16:01:24, 5,000 shares were purchased at $0.42 and then immediately unloaded at $$0.415.
In reality, then, we ended the day a full $0.02 down, yet the ratio of buys to sells reveals this observation may be deceptive. That's because Buys for the day totaled 1,770,885 and Sales totaled 1,547,360. Another 256,590 shares were unidentified, having been bought somewhere between the Bid and Ask. Clearly, the seller late Friday shafted himself, because it now appears that Tuesday's share price - especially if Reuters or Dow Jones picks up the news - could run to the $0.69 range.
None of the insiders would fall into this category, since they would know of the pending buyout, although some of them might have been among the buyers.
For Sir Emeka Offor, his decision to transfer all shares he holds into the newly-incorporated Caymans Island shell called Chrome Energy Services allows that company - in which he is the sole shareholder - to avoid some disclosure requirements and tax consequences of the sales. There's nothing wrong with that, but it has apparently left some hapless investors - like walldog, for instance - thinking that Offor has not sold any shares, and even stating that as fact. Folly is its own reward.
I should add that we are deeply grateful to the trusted poster Ruby1100 for scooping up this news and letting us know about it.
8 comments:
Joe...for someone who claims to be a writer,you certainly have trouble with reading comprehenion.
Emeka Offor is not selling shares,as a large shareholder,and COB of ERHE,an Sec filing would be required to be filed (none have been).
Notice that his percent was referenced to be reduced only,This could be caused by the company ERHE issuing shares for services recently rendered.
The added shares would reduce Offor's percentage....do you understand this.
Once again the lousy reporting by you,twisted to suit your own trading needs....usurps the truth.,,,but do we expect anything more from you...of course not.
Wallddog
You are obviously not familiar with the fact that all his 300 million-odd shares are owned by a company incorporated in the Cayman Islands and totally controlled by him. That's why he moved them there a couple of months ago - so that he would not have to disclose that company's sale of stock, and not have to suffer the tax consequences he would as a Houston-based principal shareholder of an American company. You have absolutely no idea what's going on in this stock and never have, or you wouldn't have sold tens of thousands of shares at $0.43 a month ago.
Wrong again Joe,you have zero knowledge of Sec Rules...but dream on with your conspiracies....shares are designated as restricted,not where they are,or who they are transfered to.
Why would Offor have been dumping,with a buyout/in coming...explain that one,lol,lol
I now own more shares of ERHE than I ever have and at a better cost basis...thanks to you and your fear spreading blog.
So thanks Joe,for making that an easy thing to do
Wallddog
Joe...
I believe B. Morgan is referencing the shares Offor had to transfer to FAB in that comment, because there have been no Sec Filings to indicate Offor has sold any of his shares.
Also if we have no indication of Offor selling,then why would Morgan know about it.
And if they have been in talks about a buyout/in...why in the world would he even consider selling at these depressed prices?
CONCLUSION:OFFER HAS NOT BEEN SELLING!
Wallddog
I wonder how I got President Ford's SEC nominee Patrick Delaney's name withdrawn for stock fraud? You know as well as I do that such shares can be transferred at his convenience to a new company that has limited reporting obligations, like the GEECF folks (who shared the same major investors) do.
Joe...if the shares are restricted,they remain restricted to the transferee.
If it were as easy as you state,why have any rules at all on insider selling.
All major share holder of all the companies would transfer their shares offshore and then sell them.
That is why there are laws and rules,I suggest you become familiar with rule 13D filing requirement,before posting such comments.
http://www.sec.gov/answers/sched13.htm
Wallddog
When Offor transferred all his shares to the Chrome shell in the Caymans in March (?), he reported the transaction. That was the end of the reporting oblications for his US-based company and the beginning of much-reduced reporting requirements for the Caymans-based company. That is how has been able to sell tens of millions of shares since the awards, and why John Coleman is so mad at him and us and everyone.
Give it a rest "IHATEJOESHEA" you really are a pathetic pervet. Your ranting do more then shed light on the kind of man you are. I feel sorry for the family and other people in your life that exposed to your vitronic rambling and vindictitave personality. I would say "Take a look around at your life" but someone that in the depths of anger and perversion like yourself would never see it. What a sad man you are.
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