Wednesday, August 31, 2005

Steve Forbes Tells Aussies Oil Bubble Will Burst Soon

Steve Forbes, the publisher of Forbes magazine and operator of Forbes.com, said today at a press conference in Australia that the price of oil will burst suddenly and fall to the $35 level by early next year.

In another development, the CEO of Chevron said the current price of oil, near $70 a barrel, cannot be sustained. That news follows immediately below the Forbes comment. The article about Chevron quotes Nigerian oil minister Edmund Daukoru.

The Forbes.com site has generally been bearish on ERHC Energy (OTC symbol: ERHE).

Here is the article:

Oil price bubble about to burst — Forbes

SYDNEY, Aug. 30 (AFP) — Oil prices are set to crash from this week’s record highs as a speculative market bubble bursts with an impact that could make the hi-tech bust of 2000 "look like a picnic," business publisher Steve Forbes predicted Tuesday.

Forbes said the high oil prices currently dampening the US economy, which peaked at more than $70 a barrel Monday as Hurricane Katrina headed for the US Gulf Coast, would fall to $30 to $35 a barrel within a year.

"I’ll make a bold prediction... in 12 months, you’re going to see oil down to $35 to $40 a barrel," he told reporters in Sydney.

"It’s a huge bubble, I don’t know what’s going to pop it but eventually it will pop — you cannot go against supply and demand, you cannot go against the fundamentals forever."

The billionaire magazine publisher’s comments came as the price of crude eased following US government comments that it could release some of its Strategic Petroleum Reserve (SPR).

The SPR, a 700 million barrel stockpile set aside for emergency use, could be used to counter oil shortages caused by Hurricane Katrina’s devastation of the Gulf oil industry, which accounts for about a quarter of US output.

Forbes, who unsuccessfully sought Republican nomination in the 1996 and 2000 US Presidential elections, said the US government’s constant topping up of the SPR had helped drive up oil prices.

"The speculators know now that no matter what happens to the price of oil, Uncle Sam is there buying almost every day," he said.

"Stop the buying and in fact throw some of that oil on the open market, boy that would throw it in turmoil and send the price down."

He said factors such as inflation and increased demand for oil from China and India only accounted for a small part of the price hike from $25 to $30 a barrel three years ago.

"The rest of it is sheer bubble speculation," Forbes said.

"I’ll be blunt, there’s hardly a hedge fund in North America that hasn’t speculated on oil futures."

Forbes said the higher the oil price rose, the harder it would eventually crash, creating more pain for hedge find managers and their clients.

"I don’t think it’s going to go to $100 but if it does the crash is going to be even more spectacular," he said. "It will make the hitech bubble look like a picnic — this thing is not going to last."

Economists said the damage caused by Hurricane Katrina could lead to higher oil prices in the short term.

"The key factor is really going to be how much damage has been done to oil production facilities, how long the higher prices are going to be sustained," National Australia Bank minerals and energy economist Gerard Burg said.

"That, at the moment, is the big unknown because really it’s far too early to know what has been done to the oil rigs.

"But if there’s any sustained damage then obviously prices are going to be supported higher in the short-term."


Here;s the Chevron article:

Chevron: Oil Cannot Remain at $70
Wednesday, August 31 2005 @ 09:03 AM Eastern Daylight Time
One of the world's largest oil companies, Chevron's CEO David O'Reilly said oil prices cannot remain over $70 for long.

In the Indonesian capital Jakarta to join a conference about the sector, Chevron's top executive claimed that soaring oil prices will cause a reduction of consumption causing prices to a fall.

A price of $70 per barrel or higher is not a "sustainable" price he said, yet, did not offer any figure to suggest what a "sustainable price" is.

The Organization of the Petroleum Exporting Countries (OPEC) member Nigeria's Oil Minister Edmund Daukoru defended that the organization should increase its daily output by a million barrels.

"I support this, but it would not be sufficient. The market will not be affected by small increases. If we can, an increase of a million barrels would be better for the market psychology," said the Nigerian minister who mentioned OPEC Chairman Sheikh Ahmad al-Fahd's call for an increase of daily production by 500,000 barrels.

A New Look For ERHC Energy

After a particularly pointed and bitter missive from a Raging Bull poster named bklynboy, the company has unveiled a long-awaited new design for its Website at the same domain and promises a steady stream of accurate information for investors in the future.

To celebrate, we bought 10,000 shares this morning at $0.405, bringing our total portfolio back to 110,000 shares at a more comfortable average of $0.4073.

The new site may eventually make it less necessary for investors like myself to run independent Websites in order to make up for the historic absence of news and information from the company.

From a professional standpoint, the new site and flame logo is uncomplicated, easily accessible and nicely designed. The flame, however, particularly in America, is closely associated with natural gas, not oil, and the fact that so much natural gas is flared off in Nigerian wells may make it a point of contention. The "highly styl;ized" E's that are mentioned in the press release about the new site are not apparent - the typeface is the familoar Early American.

The new site does make it easy to access the current price via a link to the Nasdaq, and has all the press releases from recent years. There is also a link to stock charts, some basic statements about governance - the company has adopted procedures to comply with the Foreign Corrupt Practices Act and to protect whistleblowers, for instance - but does not provide current and up-to-date pictures of its officers and directors, nor does the link under News to "Fact Sheets" work.

There is also link to the Nigeria Sao-Tome Joint Development Authority Website and to all the critical announcements, charts, sesimic data and press releases there, and valuable links to the U.S. Dept. of Energy oil-related Websites.

There is nothing addressing concerns of investors about the move of CEO Emeka Offor's stock to a Cayman Islands shell, however, nor any discussion of the long and deleterious wave of selling that hit the stock immediately after the awards of May 31.

On the "Media Resources" link under "News," only a link to the public relations person is given. Past front-page articles from the Los Angeles Times and Houston Chronicle, and a long feature from the premium Dow Jones News Service are not to be found, nor is a link to the fractious and foul-mouthed Raging Bull investor board, or the heavily censored Investor's Hub site. ERHC On The Move, which is the second search result for the company on Google, also goes unmentioned like the proverbial hippopotamus at the dinner table.

All in all, we give the Website a B on a scale of A to F.

Here is the press release heralding the site, which is at http://www.erhc.com.

ERHC Energy Launches New Logo, Web Site

HOUSTON--August 30, 2005--Houston-based ERHC Energy Inc. (OTCBB:ERHE) today launched its new web site, http://www.erhc.com. The new site includes a new look, logo and content features designed to provide the most current company news and information.
Included are answers to some of the most frequently asked questions, particularly those presented following the company’s recent award of Blocks in the Nigeria-Sao Tome and Principe Joint Development Zone (JDZ). Visitors will also find fact sheets, company history and background, practical industry links and the president’s inaugural update to shareholders.

“We are very excited about ERHC Energy’s new web site and logo. The new identity better represents who we are: a young, progressive independent oil and gas exploration company,” said Ali Memon, President and CEO of ERHC Energy.

“The new ‘flame’ logomark, made up of two highly-stylized E’s that reinforce the company name, provides an artistic interpretation of a long-standing industry symbol, and communicates the company is a bright spot in the sector that will help fuel the future,” commented Deborah Buks, ERHC Energy’s communications consultant.

Based in Houston, Texas, ERHC Energy Inc. is an independent oil and gas company focused on exploration in the Gulf of Guinea offshore West Africa. For the most current updates and information, visit the company's website at www.erhc.com.

Media Contacts:
Shanta Mauney or Deborah Buks
Ward Creative Communications, Inc.
smauney@wardcc.com; dbuks@wardcc.com
713-869-0707


-end-

Monday, August 29, 2005

Trading Updates: New Selloff Today?

If anything has been consistent in the recent price history of ERHC Energy (OTC BB symbol: ERHE), it is that it behaves in a contrarian manner. When oil prices go up, it goes down; when oil prices go down, it only sometimes goes up.

In fact, because it behaves independently of oil prices - probably because it has not drilled any yet - you really have to wonder whether the knockout blow Hurricane Katrina is poised to deliver to Gulf Coast oil platforms and refineries won't also be a knockout blow for ERHE.

As oil futures rise tomorrow and gas prices soar by as much as 30 cents at the pump, ERHE is likely to nose-dive as investors come to understand that they will get no benefit from the bid for Nigerian Exclusive Economic Zone properties made by ERHC Energy chairman Sir Emeka Offor on behalf of Chrome Oil.

Many will also suspect that the vast selling over the past two months was propelled by the Nigerian millionaire's need for ready cash to make the NEEZ bid, and suspect further that his moving more than 42 percent of the company's stock to an SEC-sheltered shell in the Caymans Island may foretell a cashless takeover of the company by Chrome Energy Services, the parent holder of Offor's 309 million shares.

If he was indeed the seller, he was also probably the buyer that stepped in on top of the Penny Oil Speculator pump and recovered some of what he'd sold at a fraction of his sale price when our stock hit $0.32. For the $5,000 investment in the pump, he would have recovered about 10-15 percent of what he sold at just two-thirds of his sale price, we figure.

Two posters on Investors Hub, an idiot named snow and my old nemesis stockhocker, will probably tell you different. They'll insist I'm "lying" and that ERHE is likely to rise. Believe whomever you wish, but ERHC Energy longs should beware - we're in dark, strange waters now, even without a hurricane. Let's just hope the circling sharks are Chinese.


Update, 4:30pm, 8/29/05: The lowest offer pricew today was $0.415 which suggests someone named MugWump on I-Hub - like the Republican Mugwumps of 1883 - was
betraying his own kind when he said he purchased shares today at $0.41. According to ADVFN, no sales at all were made at that price. We've been stopped from posting at I-Hub after we posted that snow was a "name-caller," but the crap-for-brains folks who feed there are probably broke anyway.

Update, 1:54pm, 8/29/05: We picked up 40,000 shares at $0.42 and are seeking another 10,000 at $.40, although I'm doubtful the price will fall that low today. The price is currently $0.41 Bid and $0.415 Ask, with sales running morre than 2:1 ahead of purchases. At 1:39pm EDT, Buys of 198,180 trailed Sells of 433,879.

Update, 10:09am, 8/29/05: As predicted, a strong selloff hit ERHE shares this morning. By 10am, 150,000 shares had been sold and just 26,000 purchased, and the price was $0.425, down half a cent.

Vast Effects Seen From Katrina Hit


The virtual destruction of New Orleans is widely reported as a possible outcome of Category 5 Hurricane Katrina, set to hit the Louisiana coastline at 6am CT Monday morning. The approaching storm drove oil prices over $70 a barrel last night, and is expected to drive gasoline at the pump 20 to 30 cents higher. Photo courtesy of NOAA.
Joe Shea/The American Reporter



This arena in Arcadia, Fla., was the rural city's main disaster shelter during Hurricane Charley in 2004, but high winds ripped its roof off at the height of the storm. Many wonder about the security of the Superdome amid the construction-related corruption that has been endemic to the city. More than 8,000 people are sheltering there.
Joe Shea/The American Reporter

UPDATE, 8/31/05, 9:20AM est: IT SEEMS TO THE WORST FEARS OF NEW ORLEANS RESIDENTS HAVE BEEN REALIZED. HERE IS A REPORT RELEASED THIS MORNING BY NBC, MSNBC AND OTHER NEWS AGENCIES:

NBC, MSNBC and news services
Updated: 9:01 a.m. ET Aug. 31, 2005

NEW ORLEANS - Hellish scenes of death, damage and chaos wracked the U.S. Gulf Coast on Wednesday as overwhelmed authorities tried to rescue the living, protect those in shelters, and count the dead following Hurricane Katrina.

New Orleans was filling with water after an initial attempt to stop a leaking levee failed, while police fought to stop widespread looting in the stricken city.

Louisiana Gov. Kathleen Blanco said everyone still in the city, now huddled in the Superdome and other rescue centers, needs to leave. She said she wanted the Superdome evacuated within two days.

“We need to evacuate the people in the Superdome and other shelters and in the hospitals,” she told NBC’s “Today” show on Wednesday. “Those are our basic missions today.”

Trying to fix the levees, she added, has been “an engineering nightmare,” with sandbags dropped from the air simply falling “into the eternal black hole.”

“This is a nightmare,” she added, “but one that will give us an opportunity for rebirth.”


Here is the 8am 8/29 EDT Avisory from NOAA's National Hurricane Center:


000
WTNT32 KNHC 291254
TCPAT2
BULLETIN
HURRICANE KATRINA INTERMEDIATE ADVISORY NUMBER 26B
NWS TPC/NATIONAL HURRICANE CENTER MIAMI FL
8 AM CDT MON AUG 29 2005

...LARGE AND EXTREMELY DANGEROUS CATEGORY FOUR HURRICANE KATRINA POUNDING SOUTHEASTERN LOUISIANA AND SOUTHERN MISSISSIPPI...

A HURRICANE WARNING IS IN EFFECT FOR THE NORTH CENTRAL GULF COAST FROM MORGAN CITY LOUISIANA EASTWARD TO THE ALABAMA/FLORIDA BORDER ...INCLUDING THE CITY OF NEW ORLEANS AND LAKE PONTCHARTRAIN.

A TROPICAL STORM WARNING AND A HURRICANE WATCH ARE IN EFFECT FROM EAST OF THE ALABAMA/FLORIDA BORDER TO DESTIN FLORIDA ...AND FROM WEST OF MORGAN CITY TO INTRACOASTAL CITY LOUISIANA.

A TROPICAL STORM WARNING IS ALSO IN EFFECT FROM DESTIN FLORIDA EASTWARD TO INDIAN PASS FLORIDA... AND FROM INTRACOASTAL CITY LOUISIANA WESTWARD TO CAMERON LOUISIANA.

FOR STORM INFORMATION SPECIFIC TO YOUR AREA... INCLUDING POSSIBLE INLAND WATCHES AND WARNINGS...PLEASE MONITOR PRODUCTS ISSUED BY YOUR LOCAL WEATHER OFFICE.

AT 8 AM CDT...1300Z...THE CENTER OF HURRICANE KATRINA WAS LOCATED NEAR LATITUDE 29.7 NORTH... LONGITUDE 89.6 WEST OR ABOUT 40 MILES SOUTHEAST OF NEW ORLEANS LOUISIANA AND ABOUT 65 MILES SOUTHWEST OF BILOXI MISSISSIPPI.

KATRINA IS MOVING TOWARD THE NORTH NEAR 15 MPH... AND A GRADUAL TURN TO THE NORTH-NORTHEAST AT A SLIGHTLY FASTER FORWARD SPEED IS EXPECTED OVER THE NEXT 24 HOURS. ON THIS TRACK... THE CENTER WILL BE PASSING JUST TO THE EAST OF NEW ORLEANS DURING THE NEXT FEW HOURS WITH THE WORST OF THE WEATHER FOR THAT CITY OCCURRING OVER THE NEXT COUPLE OF HOURS. THE CENTER IS EXPECTED TO MOVE INTO SOUTHERN MISSISSIPPI LATER TODAY.

MAXIMUM SUSTAINED WINDS ARE NEAR 135 MPH...WITH HIGHER GUSTS. KATRINA IS AN EXTREMELY DANGEROUS CATEGORY FOUR HURRICANE ON THE SAFFIR-SIMPSON SCALE. WEAKENING IS FORECAST AS THE CIRCULATION INTERACTS WITH LAND TODAY. WINDS AFFECTING THE UPPER FLOORS OF HIGH-RISE BUILDINGS WILL BE SIGNIFICANTLY STRONGER THAN THOSE NEAR GROUND LEVEL.

KATRINA IS A VERY LARGE HURRICANE. HURRICANE FORCE WINDS EXTEND OUTWARD UP TO 125 MILES FROM THE CENTER...AND TROPICAL STORM FORCE WINDS EXTEND OUTWARD UP TO 230 MILES. PASCAGOULA MISSISSIPPI CIVIL DEFENSE REPORTED A WIND GUST TO 118 MPH... AND GULFPORT MISSISSIPPI EMERGENCY OPERATIONS CENTER REPORTED SUSTAINED WINDS OF 94 MPH WITH A GUST TO 100 MPH. BELLE CHASSE LOUISIANA... JUST SOUTHEAST OF NEW ORLEANS... RECENTLY REPORTED SUSTAINED WINDS OF 76 MPH WITH A GUST TO 88 MPH. A LITTLE EARLIER... BELLE CHASE REPORTED A GUST TO 105 MPH. NEW ORLEANS LAKEFRONT AIRPORT RECENTLY REPORTED SUSTAINED WINDS OF 69 MPH WITH A GUST TO 86 MPH.

THE MINIMUM CENTRAL PRESSURE RECENTLY REPORTED BY AN AIR FORCE RESERVE UNIT RECONNAISSANCE AIRCRAFT WAS 923 MB... 27.26 INCHES.

COASTAL STORM SURGE FLOODING OF 18 TO 22 FEET ABOVE NORMAL TIDE LEVELS... ALONG WITH LARGE AND DANGEROUS BATTERING WAVES... CAN BE EXPECTED NEAR AND TO THE EAST OF THE CENTER. STORM SURGE FLOODING OF 10 TO 15 FEET... NEAR THE TOPS OF THE LEVEES... IS POSSIBLE IN THE GREATER NEW ORLEANS AREA. SIGNIFICANT STORM SURGE FLOODING WILL OCCUR ELSEWHERE ALONG THE CENTRAL AND NORTHEASTERN GULF OF MEXICO COAST.

RAINFALL TOTALS OF 5 TO 10 INCHES...WITH ISOLATED MAXIMUM AMOUNTS OF 15 INCHES...ARE POSSIBLE ALONG THE PATH OF KATRINA ACROSS THE GULF COAST AND THE TENNESSEE VALLEY. RAINFALL TOTALS OF 4 TO 8 INCHES ARE POSSIBLE ACROSS THE OHIO VALLEY INTO THE EASTERN GREAT LAKES REGION TUESDAY AND WEDNESDAY.

THE TORNADO THREAT AHEAD OF KATRINA CONTINUES TO INCREASE AND SCATTERED TORNADOES WILL BE POSSIBLE TODAY OVER SOUTHEASTERN LOUISIANA... SOUTHERN MISSISSIPPI ... SOUTHERN ALABAMA... AND OVER THE FLORIDA PANHANDLE.

REPEATING THE 8 AM CDT POSITION...29.7 N... 89.6 W. MOVEMENT TOWARD... NORTH NEAR 15 MPH. MAXIMUM SUSTAINED WINDS...135 MPH. MINIMUM CENTRAL PRESSURE... 923 MB.

THE NEXT ADVISORY WILL BE ISSUED BY THE NATIONAL HURRICANE CENTER AT 10 AM CDT.

FORECASTER PASCH
$$

Saturday, August 27, 2005

Offor A Winner In Nigerian EEZ Bid

On ERHC On The Move had specific information that the company might be a bidder in the Nigerian Exclusive Economic Zone, and today - according to a newspaper report in Nigeria from the well-known This Day Online - we learned that in fact Chrome Oil, owned by ERHC Energy chairman Sir Emeka Offor, was on of the successful bidders.

What is not known is whether any benefit of the award will accrue to ERHC Energy shareholders, as the bid was apparently made by Chrome il, a related company that has only one stockholder, Sir Emeka Offor.

ERHC On The Move revealed that Sir Emeka Offor was one of the bidders in an exclusive report more than three weeks ago. Posters on RB and I-Hug went to great pains to discredit the our report, probably because they were secretly shorting our stock.
.
Little is known about the bid at this hour.

Here is the relevant excerpt from that story:

Conoil in Historic Win
Petrol now sells for N65, Labour kicks
From Mike Oduniyi and Onyebuchi Ezigbo in Abuja, 08.26.2005

excerpt:

Yesterday’s exercise also witnessed the distribution of Nigerian indigenous firms as Local Content Vehicles (LCVs) to the blocks that were won. The LCVs that clinched slots in the oil blocks include Zenon Jovis Petroleum Develo-pment Company, owned by Mr. Femi Otedola, Chrome Oil promoted by Sir Emeka Ofor and Obat Oil Petroleum Limited.


The full story is at:

http://www.thisdayonline.com/nview.php?id=26457

Did ERHC Energy Bid On New Nigerian Blocks? We'll Know Soon

Did ERHC Energy (or Chrome Oil) bid on any of the 63 blocks offered by Nigeria in its Exclusive Economic Zone licensing round that came to end this week? We'll soon know.

Here's an article from Al-Jazeera, of all places, on the current situation:

Hundreds of firms vie for Nigerian oil

Friday 26 August 2005, 14:31 Makka Time, 11:31 GMT

Representatives from hundreds of oil firms are in Nigeria's capital Lagos for an announcement on the winners of dozens of new oil-exploration licenses for plots across Africa's largest oil producer.

Nigeria, an OPEC member, was to announce winners on Friday from among 300 local and global energy companies angling for exploration rights in over 75 parcels from Lake Chad in the northeast to plots in the Gulf of Guinea.

Nigeria deputy oil minister Edmund Daukoru said winners will be required to pay between US$500,000 and US$50 million as "signature bonus" for their oil licenses in Nigeria's largest-ever exploration offering since oil was discovered nearly 50 years ago.

The country has toughened contract terms, betting that with prices at above $67 a barrel it can attract strong bids for the areas on offer, particularly in the deep waters of the Gulf of Guinea.

"As this is Nigeria's first bid round it's virgin territory. It's a huge round, there's lots of interest and there's a wide variety of geology. It will be full of surprises," said a senior Western oil executive who is bidding for a deepwater block.

Preferential rights

The United States hopes to source a quarter of its oil from the Gulf of Guinea in 10 years, from 14% now, but fast-growing Asian countries also want a piece of the action in a region where billion-barrel finds are still possible.

Two Asian companies got a head-start in Friday's race by obtaining preferential rights over five blocks, which Nigeria granted them a week before the licensing in return for promises of investments in its derelict industrial infrastructure.

Africa's most populous country has failed to translate its oil wealth into basic services for the majority of its 140 million people, most of whom live on less than $1 a day.

Since Nigeria started exporting crude oil in the 1970s billions of petrodollars have been swallowed up by foreign firms as profit or by corrupt and inefficient governments.

Edmund Daukoru said this week's last minute deals with Asian firms represented a new hope of development that Western investors had failed to offer in decades of involvement in Nigeria.

The deals with Korea National Petroleum Corporation (KPNC) and Taiwan's Chinese Petroleum Corporation (CPC) displeased rival US companies, some of which threatened to pull out of the bidding, a Nigerian official told Reuters.

Response to criticism

Responding to criticism that preferential treatment on some blocks for KPNC and CPC might put off the best bidders for the areas, Daukoru said on the eve of the bidding round: "The best bidders have not helped with our national aspirations.

"We are in a hurry to develop. The oil industry has been an enclave industry. We want to break out of the enclave and merge with the greater economy of the country and we are not getting the response we expect and deserve (from Western investors).

"No operator has talked railway to me, no operator has talked shipyard, no operator has talked about so much generation apart from these toy things of 250 megawatts.

"We are in a hurry to develop. The oil industry has been an enclave industry. We want to break out of the enclave and merge with the greater economy of the country and we are not getting the response we expect and deserve (from Western investors),"
Daukoru said.

All of Nigeria's current output of 2.5 million barrels per day is produced by Nigerian National Petroleum Corporation (NNPC) in five joint ventures operated by Royal Dutch Shell, ExxonMobil, Total, Chevron and ENI.

Tuesday, August 23, 2005

The $0.04 drop in ERHC Energy's share price Monday was not unexpected, and some longs are now positioning themselves to buy again in the $0.38 or higher range within the week. More daring traders may look for a steeper decline, perhaps to $0.36 or even $0.34.

Whatever we give back this week, however, is likely to be restored sooner rather than later as the Production Sharing Contracts and Joint Operating Agreements grow closer to completion.

We expect the heat to start helping our balloon rise in early September, with perhaps another an extended plateau after that and then some steady gains as October comes and goes.

By December, particularly if the PSC and JOAs are brought in on time and announcements are made relative the acquisition of drill ships or semi-submersibles and exploration, we could again be testing historic highs. Christmas has usually been a great time for ERHE.

The buying of the past week has been encouraging, but it did not last. It wasn't supported in any overt way by the company, and now that it appears to be at an end, the seller who has plagued us all summer can resume his or her mnission.

Their motives, and even their sales, are ultimately irrelevant; we are headed for blue skies, and probably a buyout, and I think nothing will stop us along the way.

Saturday, August 20, 2005

Penny Oil Speculator Article May Have Prompted ERHE's 37% Rally

The rally Thursday and Friday that saw ERHE go from as low as $0.32 to as high as $0.50 before settling down at $0.455 may have been prompted by an article in the Penny Oil Speculator Thursday morning, a copy of which has been forwarded to ERHC On The Move. Meanwhile, Ruby1100 has taken this version from the blog and posted it on Raging Bull, but without my caveats.

The publication's URL ends with a Philippine domain abbreviation, ".ph," but has an address in a professional building adjacent to the Patriots Point Links golf course in Mt. Pleasant, South Carolina. It does not publish a disclaimer as to whether or not the authors were paid by ERHC Energy or an investor group to publish the article, as is often the case. If they are a foreign-domiciled corporation, they may not be required to post any such disclaimer. In an email from Ruby1100, a person purporting to be Chuck de Castro, the alleged author, is quoted as saying the company does not accept payments or stock from companies it writes about or their shareholders. We have no reason to believe or disbelieve that statement.

The article opens with a summary of ERHE's prospects, then goes into those in more depth after the salutation. It ends with an appeal for subscriptions, which it says are $5,000 a year. I got a phone call from a man who saw the line "They're also still scouting for drill-ships that can drill up to a mile under water in their Gulf of Guinea properties" and said he was concerned that no drilling rigs are available to prospect in the JDZ for the next three years. That seems to be a problem our partners will handle with ease come January, I told him.

Frankly, I don't think this letter was the main impetus for the rally. Whomever purchased our way back to profitability had millions of dollars to do so, and I don't think that kind of money is out there among penny oil speculators. In fact, this letter may be a diversion intended to mask a single, truly large investor's move in ERHE. I hope to buy ERHE at $0.40 around Wednesday of next week.

Penny Oil Speculator
268 West Coleman Blvd STE 2C, Mount Pleasant, SC 29464-5650 USA

Tel: 1-843-388-8470 Fax: 1-843-388-0512 US toll-free: 1-800-330-1435


Issue #291 August 18, 2005

New Recommendation:

33-cents-a-share penny oil beats out oil majors and bags the rights to drill on red-hot properties with the potential to yield $840 BILLION of oil!

ERHC is a tiny US oil company that ventured into a tiny island in the oil-rich Gulf of Guinea, offshore West Africa, years ago and bagged a jackpot: rights to drill on over 2,200 square miles of prime offshore oil exploration blocks that could yield over 14 BILLION barrels of oil -- worth $840 billion!

ERHC expects to start drilling within the next six months. And based on previous other billion barrel oilfields discovered nearby, we're positive there's a lot of oil that can be found.

Buy ERHC shares today for only 33 US cents each and I think you could make at least 506% gains in the next few years.


Dear Subscriber,

The Gulf of Guinea, in West Africa, is one of the most prolific oil regions in the world. In fact, this area already provides 15% of US oil imports. And the US expects this to grow to 25% within the next couple of years.

Located in the Gulf of Guinea is a tiny obscure island nation called Sao Tome. A lot of the big oil companies have been eyeing the offshore blocks in this country for some time since it has the potential to hold billions of barrels of oil. In fact, located right next to this oil blocks are several billion barrel discoveries including the 1 billion barrel Akpo field, the 500 million barrel Niwwa field and the 500 million barrel Ikija oilfield.

But one little Houston based company -- ERHC Energy - has unbelievably beaten out the majors and bagged the rights to participate in drilling in all the offshore blocks in Sao Tome.

How tiny ERHC Energy beat out the majors in bagging the rights to drill on a potential 14 BILLION barrels of oil In 1997, even before huge oil deposits were discovered in the deepwaters of the region, ERHC placed their bet on Sao Tome

ERHC -- majority owned by Nigerian billionaire Sir Emekka Offor with a 35% stake -- helped the country jumpstart their oil exploration industry, which was still non-existent at that time. In return, Sao Tome gave ERHC preferential ownership rights to drill on six offshore blocks (a designated area for oil and/or gas exploration) covering over 2,200 square miles that the island-nation shared with next-door Nigeria.

As a bonus, ERHC was allowed to bid for larger stakes of the said blocks once they were auctioned-off. And best of all, ERHC would be exempt from paying signature bonuses -- an upfront fee that other companies would have to pay Sao Tome to earn the right to drill for oil-- on any four of its six offshore blocks!

Last December, Sao Tome offered offshore blocks 2, 3, 4, 5, and 6 (Exxon and Chevron already cornered block 1 the year before) for exploration and the auction attracted 23 international oil companies.

And since ERHC had the rights to drill on these properties, the company ended up owning between 15% and 65% stake on each of these 5 large oil blocks.

To be assured a piece of the highly-coveted oil properties, US oil heavyweights Pioneer Natural Resources and Noble Energy struck partnership deals with ERHC. In exchange for a share of the oil blocks, Pioneer and Noble agreed to foot all the drilling costs in their operational areas.

In June, the auction winners were announced and the ERHC/Pioneer partnership was awarded control of 65% of block 2 and 25% of block 3, while the ERHC/Noble team-up cornered 60% of block 4. ERHC also got a 15% stake in blocks 5 and 6.

With the sweetheart deal with Pioneer and Noble in place, ERHC will not spend a penny to start drilling on these properties. They can now sit back, relax, and wait for the money to come rushing in once oil starts to flow out of their properties.

And the chances of that happening are excellent! That's because the best place to hunt for oil is right beside where it's already been found.

Aside from the huge billion barrel Akpo field, and the 500 million Niwwa field discovered nearby, there are another 14 oilfields with reserves ranging from 100 million barrels to 1 billion barrels of oil discovered in and around the Gulf of Guinea in recent years.

Plus, based on available seismic surveys (sort of like an X-ray of the ground) and geological profiling done by PGS and Western Geco, two of the world's biggest and most respected oil services companies, ERHC’s offshore properties are estimated to contain 14 BILLION barrels of oil -- worth an eye-popping $840 billion at today's prices.

And yet, you could buy the company lock, stock, and barrel right now for less than $256 million. What a great bargain and that's why we want you to buy a boatload of their shares!

Buy shares of ERHC today and you could multiply your money 6-fold within the next 3 years

It's still early days for ERHC and their stock. The company and their partners are still currently working out the details of the production sharing contract with the Sao Tome JDZ government.

They're also still scouting for drill-ships that can drill up to a mile under water in their Gulf of Guinea properties. More importantly, it will cost tens of millions of dollars to drill one single well. And the first quarter of 2006 would probably be the soonest time that a well would be drilled.

These factors plus the fact that ERHC trades in the obscure Nasdaq over-the-counter-bulletin-board are the reasons why you can still buy ERHC's shares for a measly 35 US cents each.

Nevertheless, given the massive potential pay-out of their drillings coupled with the company's tiny share price, we think that now is the best time to load up on shares.

By the time they begin drilling for oil early next year, I expect more investors to start piling in to buy ERHC stock. When this happens, I expect the shares to go for $1 each -- a 200% gain from current prices.

And if they indeed discover oil in the Gulf of Guinea, it's going to be one heck of a payday for you.…

Even if ERHC discovers merely a FRACTION of that 14 billion barrel estimate - say 2 billion barrels -- the company's share of reserves could fetch $1.4 billion (or $2 a share) at a conservative buy-out price of $5 per barrel of reserves. So given ERHC's current share price of 33 US cents, that's a potential 506% gain on your investment!

That's a conservative estimate. Of course if they find more oil on their turf, then the shares could go even higher - giving you a chance to bag even higher gains.

Clearly, ERHC has got massive profit potential. So don't let this opportunity pass you by. Contact your broker now and buy shares of ERHC Energy today!

ERHC Energy trades in the US Nasdaq Over-The-Counter Bulletin Board market under the symbol ERHE. Their shares currently go for $0.33 a piece. The company's shares also trade in Berlin and Frankfurt under the symbol ERH. For more information about the company, visit their website at http://www.erhc.com/

Important note: since ERHC is still a thinly traded stock, please put in a limit order to buy shares at 38 US cents or lower.

And it's due exactly to penny stocks like ERHC that we've had to limit our subscriber base to no more than 1,000. But now, we're approaching that limit. We've sold 950 subscriptions to Penny Oil Speculator and are about to email out another letter to sell out the remaining 50 slots. After that, wanna-be penny oil subscribers will have to be put on a waiting list.

I know you have time left on your subscription and are probably not even thinking about renewing right now. But I'd hate to see you lose your slot to a wait-listed investor simply because you missed the notice or your payment got crossed in the mail.

And if you've been following our recommendations, I don't think you'd want that to happen either. Just a few weeks ago you picked up 104% and 68% profits in High Point in 4 months. And before that, we finally closed out our remaining shares in Ultra Petroleum. If you're a long-term subscriber, that bagged you up to 1,831%, 1,589%, 908% profits, depending on when you got in.

And just a month before that, you took up to 155% profits on a portion of your GeoGlobal holdings IN 4 WEEKS when they found the largest natural gas field in India!

Average profits per closed out trade (losers included): 145.4%.

That's over 7 years, 129 trades, in good markets and in bad. And the open positions add to the profits. You're up as much as 155% in TransGlobe, 98% in Transmeridian, 93% in Vaalco, and 28% in UTS Energy (in 4 weeks!).

So why not renew now while you have this reminder at hand and keep these new recos --like EHRC -- coming. That way you don't run the risk of losing your slot if you happen to be out of town when your subscription expires or miss the notice. Renew for 24 months or more and save anywhere from $1,000 to $3,000.

• 12 months: $5,000
• 24 months: $9,000 -- you save $1,000
• 36 months: $12,000 -- you save $3,000

All you have to do is pick up the phone and call Dina at 1-800-330-1435 (toll-free US and Canada) or 1-843-388-8470. We're open 'round the clock, 7 days a week.

Warm regards,

Chuck de Castro and Bob Czeschin, Editors
Penny Oil Speculator
August 18, 2005

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Friday, August 19, 2005

Big Buyer Keeps Buying, And That's Big News

Whomever has committed millions of dollars to buying ERHC Energy shares has extended his buying spree into a second day as the share price heads toward $0.49 and above. Taking advantage of the movement, we sold 52,000 shares at an average of $0.47, giving us now an average cost under $0.40 and a portfolio of 60,000 shares that is ready to grow.

Although there were far more sellers today than yesterday - when the buyer completely dominated the board and the final Buy/Sell ratio was in excess of 4:1, today's Buys outpace Sells 2,096,615 shares to 1,247,372, with 210,797 unidentified. The latter is a big number and indicates many are playing the margins of profit very narrowly, buying just above the Bid and selling just below the Ask.

At 3:10pm, as the afternoon surge gets underway, there is no sign yet of a strong buying or selling mood, either, with the Bid at $0.48 and the Ask at $0.485 and trading quiet. We are offering another lot for slightly more than the current Ask.

No one has identified the buyer as yet, but rumors persist that it is Hungarian billionaire George Soros, who may have funded a study done by Jeffrey Sachs of Columbia University that sought to establish the fundamentals of a better economy for Sao Tome and Principe, the two-island nation of 165,000 people who stand to benefit greatly from oil deposits offshore West Africa and in the Nigeria-Sao Tome and Principe Joint Development Zone and their own Exclusive Economic Zone. ERHC Energy has substantial concessions in both of those zones, and has partnered with two top mid-tier players, Pioneer Natural Resources and Noble Energy, in Blocks 2 and 3 and Block 4 of the JDZ, respectively.

The prospect that it is George Soros is somewhat troubling, however, if he is now moving to take advantage of a situation in which the Sao Tomean government is implementing a plan he developed for management of oil revenues. But that is nothing more than speculation at this point, and some attribute the heavy buying to a positive report on ERHE in the Penny Oil Speculator issue that came out Wednesday.

Thursday, August 18, 2005

Will Buyout Be Announced After Today's Close?

Update: In a last minute-burst of trading, ERHE's share price rose another $0.03 to $0.43. The nine Form T trades for a total of 46,700 shares ended a remarkable day in which Buys ran ahead of Sells by a margin greater than 4:1 and some 5,371,800 shares traded before the after-hours trades were recorded. The Form T trades were a half-cent higher than the $0.425 close.

The closing price of ERHE today may be the closing price for company's buyout, if my intuitions are correct. When I cautioned investors about a possible surprise the other day, I felt strongly that a buyout would be announced at a time when many investors were on vacation and away from the market, maximizing the ability of the buyer to drive the price down, start buying in earnest, and close out his deal with an after-the-bell announcement.

Whatever the price, it appears to be a near-certainty that either an announcement will be made after the closing bell or a Barry Morgan story tonight in UpstreamOnline will reveal further details on the buyout offer he disclosed a month ago.

About 5 million shares have moved as the day enters its final hour, with Buys still running about 3.8:1 over Sells. No disclosure whatever concerning the large-scale purchases has otherwise been made.

Trading Update: The RallyContinues,. Buy Interest Zooms, But ERHE Goes Nowhere

Trading Update, 2:27pm, 8/18/05: The buying continues unabated, and the share price remains absolutely static as Buy after Buy ges through at $0.40. The accumulator who managed to push the price down to $0.32 yesterday has been able as the price rose buy $0.075 to buy more than 3,000,000 shares at a low average from blind-sided investors who sold in fear as the price was plummeting.

Trading Update, 2:03pm, 8/18/05: More than 257,500 shares sold in the past 35 minues without a single Sell, but as usual, the huge purchases had no effect on price, which is entirely under the control of market makers and manipulators once again emarked on their mysterious errands. With no discernible news, the volume is now 1,500 percent greater than a few days ago,

Trading Update, 1:03pm, 8/18/05: The price has finally risen to $0.40, but it took better than 3 million shares of volume to accomplish (in Spring, the same lopsided buy volume might have lifted the share price 25 cents in a single day).

There has been a lot more selling in the past hour than earlier, but Buys of 3,016,393 still hold a 3:1 edge over sells of 972,227 shares (at 1:15pm EST). In the past 25 minutes we've seen two purchases of 54,000 and 50,000, and of 3,000 and 10,000 lots with f regularity.

But just before 1pm there were nine Sells of between 3,000 and 23,000 shares each in which the Buy was immediately followed by a Sell, indicating market makers may have grown short of stock - or so I'm told. the repeated Buy/Sells appear to have had the effect of moving up the Ask to $0.40 and the Bid to $0.395. The Ask was momentarily at $0.405 at 2:06pm EDT.

Trading Update, 11:53am, 8/18/05: There have 2,024,891 shares recorded as Buys and 551,152 recorded as Sells as of 11:51am this morning. There were 23,900 shares that traded in the mid-range of the two price points and were thus unidentified. The price is still $0.40.

Trading Update, 11:50am, 8/18/05: A seller dropped his offer of 5,000 shares to $0.384 from the prevailing $0.39 and knocked the price down half a cent to $0.385.

That is a signal that day traders are now starting to bail from the morning's profits and that the "rally" - which was nothing of the kind - is over...

Trading Update, 11:27am, 8/18/05: Nearly 500,000 shares traded at $0.39 in about three dozen trades in the past 11 minutes - with just 40,000 in Sells - but failed to move the price even half a cent as accumulators continue to acquire the company from dazed and wait-weary longs.

Dramatic Scenes From Gaza Synagogue Now On CNN

The last desperate battle for Gaza between Israeli settlers and the Israeli Army is unfolding now in dramatic scenes fom the Gaza Strip on CNN.

In many ways, the battle for a synagogue in Gaza is the last gasp of the settlers' effort to resist evacuation from the Gaza Strip.

The Army is being extremely considerate of the settlers, who are on the roof of a synagogue. The fight resembles a giant fraternity food fight, but it is about as peaceful a fight as anyone can imagine. There are no efforts on either side to hurt anyone involved.

The settlers on the roof are throwing some kind of watery substance - apparently paint thinner mixed with old paint - and are shooting streams of putty from plastering guns that fall on the shields and helments of the soldiers trying to assault the roof from ladders from the ground. Meanwhile, the few soldiers who gained the roof are gently wrestling teenaged boys for control of their megaphones. Soldiers on the ground are rushing to get the liquid off them, but there seems to be no panic. Many of the soldiers are removing their clothes and some are in their underwear.

At the roof's edge are coiled strands of concertina wire, offering a flimsy but sharp and somewhat effective barrier to the soldiers, All the soldiers and the settlers seem to be unarmed.

PIoneer Touted By Barrons As Noble Splits

Things couldn't be better for ERHC Energy's partners as its own share price droops on dying volume. The investment daily Barron's, in an Aug. 15 article, told investors that Pioneer Natural Resources (PXD) - ERHC's partner in Blocks 2 and 3 - is a great buy, while our partner in Block 4, Noble Energy, gave its investors a 2:1 split as its share price soared past $88.

Meanwhile, according to Barron's price-check calculator, Noble Energy (NBL> is worth $137 a share, while it is selling for just $82.16 this morning. The company has announced a stock split that will soak up most of that value, however.

Meanwhile, ERHE has enjoyed a minor renaissance this morning, soaring $0.065 from $0.325 to $0.39 on volume of 1.55 million shares as accumulators who are apparently buying out the company take advantage of price-depressed investors to snap up millions of shares at discount dime-store prices. Sellers will face a bitter surprise, we believe, as the share price recovers into the Fall and Winter months.

Tuesday, August 16, 2005

New Source of Energy Discovered At University Of Missouri

In a startling development, a new and potentially unlimited source of energy has been discovered by scentists at the University of Missouri at Columbia, Mo., according to a press release issued by university science writer Jeff Neu. The energy source is not yet patented.

Along with another new energy source called HH20, developed by an inventor in Clearwater, Fla., and publicized on Florida's Gulf Coast by Tampa Bay's Fox News Channel 13, that allows cars to be driven 100 miles on four drops of water and has recently been granted a patent, it is the second major revelation of new energy sources in the past 30 days. Further information on HH20 is available at http://www.hytechapps.com/.

These developments may one day pose a substantial threat to the hegemony of oil as the world's premier fuel source.

Here is the press release from the University of Missouri:

MU Researchers Develop New Source of Energy Using Nanotechnology

Reaction Can Occur in Microseconds on Surfaces as Small as Microchips

COLUMBIA, Mo. ­- Countries across the world continue to search for new ways to create energy. As our current means for energy continue to deplete, thus making them more expensive to generate, governments are searching for new energy resources. Researchers at the University of Missouri-Columbia have developed a more efficient source of energy involving nano-scale particles that take only microseconds to create and can be developed on a surface as small as a microchip.

“This technology is considerably less expensive than existing chemical and physical processes,” said Shubhra Gangopadhyay, professor of electrical engineering at MU. “It creates high amounts of mechanical and thermal energy and can convert that energy into electrical energy. So, the possibilities are endless in terms of what this energy can do.”

The energy is developed using solid state energetic material consisting of fuel and oxidizer. The nano-engineered energetic material generates a tremendous amount of thermal and mechanical energy when ignited. Electric power is generated using the thermoelectric effect. The microfabricated devices coated with the energetic material are capable of producing tens of joules, which are units of energy, in the fraction of a second, which can be used for pulsed power applications or can be stored in charge storage devices for later use in portable electronics.

Power also is generated by converting mechanical energy produced by shock waves into electrical energy utilizing piezoelectric materials, which are materials where the positive and negative electrical charges are separated, but symmetrically distributed, so that the material overall is electrically neutral. MU researchers currently are working on the process to couple the thermoelectric and piezoelectric effect to produce energy on a single chip.

Gangopadhyay says there currently are no obstacles to overcome with the research. She points out that the process can be done on glass without affecting its surface and does not necessarily need electricity to start it. All that is needed is friction or impact.

The researchers currently are seeking a patent for this technology.


The release can be seen at http://research.missouri.edu/news/stories/050812_nano.htm.

George Soros Doubles Position In PXD

Hungarian billionaire and well-known social activist George Soros today revealed in an SEC filing that he has purchased another X percent of Pioneer Natural Resources, the partner of ERHC Energy in Blocks 2 and 3 of the Nigeria-Sao Tome and Principe Joint Development Zone.

Meanwhile, ERHC Energy shares fell to a new recent low of $0.351 on miniscule volume of 251,115 shares, also a recent low.

Forbes Magazine revealed the that Soros has increased his holdings in PXD from 1.52 million to 3.99 million shares. It is unclear whether the well-known billionaire, who once made more than a billion in a single currency trade betting against the British pound, is also purchasing ERHC Energy shares, but he has not filed any indication of that with the SEC.

Faces In The News

Billionaire Soros Ups Pioneer Natural Holdings
Greg Levine, 08.16.05, 1:56 PM ET

NEW YORK - Want to think like a billionaire?

Start with George Soros. According to a filing with the U.S. Securities and Exchange Commission, the ├╝ber-financier has boosted his holdings in Pioneer Natural Resources (nyse: PXD - news - people ) by more than 100%.

Soros Fund Management, founded by the eponymous tycoon, reported in the SEC documentation that it owned 3.99 million shares of Irving, Texas-based Pioneer, as of June 30. That was up from 1.52 million shares at the end of the first quarter.

Pioneer Natural Resources, which produces oil and natural gas in North America and Argentina, has an asset of its own - a human one. On Monday, Pioneer filed a change-of-management 8-K with the SEC announcing that Frank A. Risch was appointed to the board of directors as an independent. Also named to the audit committee and the nominating and corporate governance committee, Risch knows a bit about the petrol business: After nearly 38 years with oil colossus Exxon Mobil (nyse: XOM /news / people), Risch retired as vice president and treasurer in June 2004.

Back to Soros. Ranked No. 55 on the Forbes World's Richest People list, some other stocks he holds are drug firms Adams Respiratory (nasdaq: ARXT /news /people ) and Auxilium Pharmaceuticals (nasdaq: AUXL /news /people ), and discount carrier JetBlue Airways (nasdaq: JBLU - news - people ). Ready to think - and hopefully invest - like a billionaire? Hope this helped.

Lightening The Load

It's been painful, but I've had to sell some 8,000 shares over the past month to meet my obligations, leaving me with 112,000 shares of ERHC Energy that today are priced at $0.37 for a grand total of $41,440. What a far cry from the excitement of last May, when they were valued at $105,000!

As most of you will remember, I advised most of you to sell on the Friday before the May 31 awards, citing the comments of the Sao Tome Prime Minister that seemed to augur more delays. I only wish I had taken my own advice, as hundreds of other traders did.

Yet having been here before several times, and watching the pump begin to build again on Raging Bull, I remain confident that by December we will be back in the high $0.50s or low $0.60s, and into the $0.70s in February.

The company has still not made a commitment to communicating with shareholders - although letters to Deborah Buks, the ERHE spokeswoman, do get a prompt answer - and thus, despite several promises, has not updated its Website even to add the several front-page and major wire service stories that trace its history, and least of all issued any press releases that might encourage investors.

That said, we see the historic cycle of the past several years revisiting this issue and a low this month of $0.295. By September, we expect, the price will climb back into the safer $0.40s once again.

There is one caveat to all this, however. We can't discount entirely the buyout talk that Barry Morgan of UpstreamOnline reported - he said there was an offer on the table - nor that there is an ERHC Energy bid for one of the Nigerian EEZ blocks, as reported exclusively here last week.

So? This stock is subject to surprises. I think any investor would be remiss if they did not half expect one.

Monday, August 15, 2005

Some 'Minnows' Pose Problem, Energy Site Says

African Energy Online, a pricey ($1245 a year) enery newsletter, has articles on the JDZ and other issues of relevance to ERHC Energy investors, but it opens its August newsletter with a warning about "minnows" who can sometimes spur economic hopes fragile African economies will never realize.

Here's the editorial, or at least the free part of it:

In imperfect markets, minnows’ role in frontier plays in question

Small companies raising capital on junior markets remain the lifeblood of frontier oil exploration, but critics say that London’s AIM must make more rigorous checks on companies that list. Guinea and Liberia are among those that have found that a minnow’s interest, industry contacts and ability to raise funds are not alone sufficient to launch an industry in their fragile economies, write Thalia Griffiths and Jon Marks.

The controversy surrounding Regal Petroleum, until recently a London Alternative Investment Market darling, disquiet over former cricketer Phil Edmonds’ AIM-listed White Nile play with the inexperienced leadership of South Sudan, and doubts over the Algerian gas reserves quoted by First Calgary Petroleums (FCP) have highlighted the risks of ill-informed investors and, in some cases, the authorities in some of Africa’s poorest countries dealing with ambitious minnow companies.

Regal’s founder Frank Timis resigned in May after its flagship Greek well came up dry and following reams of revealing newsflow about his past in the illegal drugs trade. Timis has been replaced as chief executive by Rex Gaisford, who is trying to turn the firm round, not helped by the revelation that Timis had struck a secret deal to sell the company’s Ukrainian gas assets.

Never has the need for companies, investors and host governments to do serious due diligence when entering into deals been so apparent – and this, spurred on by the United States’ Sarbanes-Oxley Act and other post-9/11 measures is reflected in the huge growth of the due diligence industry on both sides of the Atlantic.
Critics of exchanges like AIM – who now range from the growing number of resources-focused advocacy groups to veteran US wildcatter Jack Grynberg, himself involved in an ongoing listing plan (AE 88/20) – are calling for action.

Following the Regal debacle and FCP’s failure to find a buyer after Repsol YPF pulled out questioning its reserves estimates, it was widely thought that the number of resources-related listings would drop. However, executives believe the market has stabilised and another round of listings is expected this autumn.

After the market has taken stock and the resources boom seems to have peaked without a too dramatic ‘bust’ cycle, African Energy understands that, contrary to market speculation, Vanco Energy Company will come to the AIM, possibly as early as September. The Houston-based, Delaware-incorporated independent has brought in John Bentley as non-executive vice chairman to oversee this process (AE 88/30).

Among others identified by African Energy as lining up for an AIM listing are several whose ultimate owners are Gulf-based (many of them preferring to operate as very silent partners).

One of the most high-profile of these, active in an increasing number of countries in Africa, is the UAE-based Al Thani Investment Group, owned by a senior Qatari who was close to the UAE’s founding president Sheikh Zayed Bin Sultan Al-Nahayan, Sheikh Abdallah Bin Saeed Al-Thani.

Shot out in wild west

Most attention in the case of Regal and associated companies has focused on its operations in Greece, Ukraine and Romania. However, its Liberian contract for Blocks 8 and 9 is also now under review by National Oil Company of Liberia, whose president and CEO Frank Musah Dean told African Energy that “Nocal is investigating the impact these developments will have on Regal’s ability to perform the contracts.”

Regal’s agreements under the 2004 licensing round were finalised by Nocal only in June, after the company had formed a consortium with European Hydrocarbons Ltd – one of several firms in which Timis was a substantial or majority shareholder, also including European Goldfields and Sierra Leone Diamond Company. The awards are still awaiting the signature of Interim President Charles Gyude Bryant and ratification by parliament

Dean told African Energy that proper due diligence had been carried out, well before Regal’s problems came to light. “When we were doing the bid round Regal had raised so much money on the London Stock Exchange for their project in Greece,” he said (see Oil).

Meanwhile, some of the Gulf of Guinea’s last substantial open acreage may be up for grabs after the Guinea government threw out the licence-holder of its entire offshore, HyperDynamics (AE 88/18).

The Houston-based firm – which has morphed from being a specialist software company into a frontier explorationist focused on Guinea, Louisiana and Mississippi – had yet to attract a farm-in partner, but nevertheless requested a drilling permit on 27 June for four separate offshore locations: one month later, the government cancelled its production-sharing agreement.

Ever quick with a statement to investors, HyperDynamics responded: “We were confounded to hear of a termination letter in response to our request to drill four wells. Over the last three years, with complete support of the Guinea government, we have spent millions of dollars and have complied with the requirements of the PSA. We feel our work has elevated offshore Guinea from an unknown, unexplored frontier, to a world class prospect.”

Hyperdynamics said it had received no notice of termination, and so as far as it was concerned the PSA remained in force. It raised the possibility of arbitration in London.

African Energy hears that IOCs and geophysical companies are already looking into the prospects for offshore Guinea, including established US independents.

Seismic firm WesternGeco – which was an earlier partner of Conakry’s until Hyperdynamics moved in on the back of an obscure minnow with a big name, US Oil Corporation – told African Energy it would accelerate its plans to try to resume exploration activity (see Oil).

Friday, August 12, 2005

JDA Delays PSC Signings

UpstreamOnline's veteran oil writer, Bary Morgan reports this morning that an overworked Nigeria-Sao Tome and Principe Joint Development Authority staff has crumbled under the workload of negotiating Production Sharing Contracts with the winning bidders large and small in the 2005 Licensing Round.

The share price of ERHE, meanwhile, which closed yesterday at $0.385, was buoyed four-one thousandths of a cent by crude oil's rise to nearly $67 a barrel on international markets.

Unable to meet the deadlines it set just last week, the JDA has pushed them back so that - at least according to the new deadlines, which could change half a dozen times, by past experience - the entire process will now not be completed until December.

The former schedule we reported last week was abruptly removed from the JDA Website and replaced with a new one without the slightest hint of an explanation from JDA officials. The JDA Website is http://www.nigeriasaotomejda.com.

Here is the latest UpstreamOnline report from Barry Morgan:

DELAYS have been announced for the second time this month in efforts by Nigeria and Sao Tome & Principe to licence deep-water acreage in the Gulf of Guinea, writes Barry Morgan.

The Abuja-based Joint Development Authority, which manages the exercise, has indicated the process is unlikely to be completed before mid-December.

Chevron will sink the drillbit in October in Block 1, while hopes that exploration could start on Blocks 2 to 6 this year have receded.

The Joint Ministerial Council did not expect to receive the "standard production sharing contract" documents from licence winners until 8 August, but anticipates reaching approval stage by 22 August.

PSC talks between the JDA and participants should be concluded before 13 September for Block-2, by 15 September for Block-3, and 19 September for Block-4, with blocks 5 and 6 finishing over the following couple of days. The harmonised drafts should be finalised by 12 October for approval by the council on 21 October, according to the JDA.

Instead of running talks on the Joint Operating Agreements concurrently, it has been decided to delay these until all the PSCs are concluded.

The JDA does not therefore expect companies to submit agreements until 3 November, before reaching signature stage that same month.

The JDA plans to stagger signatures for blocks 2 to 6 through the second week of November, with the deadline for paying signature bonuses falling exactly one month later.

It is believed the Nigerian oil bureaucracy is wilting under the workload thrown up by the concurrent exercise to licence the Nigeria and Sao Tome Exclusive Economic Zone.

Wednesday, August 10, 2005

Sellers Dominate Again As Longs Begin To Hibernate

Until 11:42am or thereabouts on Wednesday, a total of 7,500 shares of ERHC Energy had been purchased even as some 357,000 were sold. What occasioned this mini-selloff that took us down a cent? In short: our 10-Q, filed late yesterday morning.

And what was the bad news?
The "bad news" is that our company is debt-free and has enough cash to pay its expenses for the next year, when it may begin to exploit a few of the estimated 2 billion barrels of oil that lie within its extensive concession in the Gulf of Guinea's Joint Development Zone, where our mid-tier partners, Noble Energy and Pioneer Natural Resources, are paying all the costs of development to first oil; oh, and the price oil hit $65 a barrel.

Bad news like that would utterly devastate most $0.40-cent stocks - or send them into the $10 range - but ours took it in stride and only fell 3.22 percent.

In the upside-down universe that is ERHE, where SEC regulators are getting their first look at the wildly improbable workings of an OTC Bulletin Board star, very good news drives down the price, while really bad news - such as falling oil prices, as often as not - can push it down.

Volume fell more than 400 percent from yesterday's 2.6 million to today's 609,000,
and although buyers stepped in late to halt any slide, the share price at close was $0.391, leavingus the best and cheapest bargain on all of Wall Street.

Tuesday, August 09, 2005

ERHC 10-Q Gets "Thumbs Up" From Investors

A solid quarterly report filed with the SEC Tuesday that shows our company out of debt and armed with enough cash for the next 12 months - a result achieved without dilution issuong new shares - prompted a brief 12.5 percent rise Tuesday afternoon in ERHE's lagging share price, and spurred words of praise and satisfaction from long-term investors.
Probably summing it up best - as he often does - was a post by Balance Builder on Investor's ubL
Not a bad quarterly report:

$1.4 million in cash (very little cash burn from last 10Q)

709,558,919 zero dilution since last 10Q

Gotta love this line:

"At June 30, 2005, the Company has no convertible debt with any related party."

Hmmmmmm....very significant statement here:

"As of June 30, 2005, the Company had $1,416,054 in cash and cash equivalents and working capital of $827,453, an amount believed to be sufficient to fund working capital obligations for the next twelve months."

....and what is the co doing now????

"The Company is in the process of perfecting its interest in the JDZ."

.....and where are the lawsuits we were wading in a few months ago??????

"Item 1. Legal Proceedings

The Company is not aware of any material legal proceedings pending to which it is a party or its property is subject."

I call this a very satisfactory and pleasing Quarterly report.


http://secfilings.nasdaq.com/filingFrameset.asp?FileName=0001144204%2D05%2D024353%2Etxt&FilePath...

Sunday, August 07, 2005

More Oil Than Persian Gulf? Associated Press Weighs In On Sao Tome's Future Role As US Oil Source

The future of Sao Tome and Principe as an oil exporter is vital to the United States, the Associated Press reports in a special 1,559-word feature on the tiny, two-island nation published in many newspapers today.

The story represents yet another escalation of interest in the huge deposits of oil that are believed to lie in the Nigeria-Sao Tomne and Principe Joint Development Zone in the Gulf of Guinea and Sao Tome's own Exclusive Economic Zone. ERHC Energy has been awarded extensive rights, including operatorships in two blocks in the JDZ, and has bonus-free rights to two entire blocks in the STP EEZ.

The Associated Press estimates the JDZ deposits at about 11 billion barrels, compared to the Houston Chronicle's estimate of 14 billion barrels in the papers front-page story on ERGC in February 2005.

Although it is less focused on the value of oil than on the limited means that Sao Tome curtrently has to defend its Gulf of Guinea properties, the story leaves little doubt that America expects great things as it makes the difficult transition away from Middle Eastern oil sources.

Author Todd Pitman reveals that China has gained a substantial toehold in Equatorial Guinea, evidenced by the reluctance of EQ's military to talk with U.S. counterparts. China is also competing for oil in the JDZ and is thought to be a likely suitor for ERHC's holdings.

Here is AP Correspondent Todd Pitman's story:

More oil than Persian Gulf

U.S. strategic interests rise in West Africa's oil-rich Gulf of Guinea
1559 words
7 August 2005
01:20 PM
Associated Press Newswires


EDITOR'S NOTE -- AP correspondent Todd Pitman, based in Dakar, Senegal, traveled to the tiny twin-island republic of Sao Tome and Principe. He visited a U.S. Coast Guard ship traveling through the Gulf of Guinea and interviewed U.S. and African officials.

SAO TOME, Sao Tome and Principe (AP) -- Far from home, a U.S. Coast Guard cutter plows its white bow through the seas of West Africa's Gulf of Guinea, where an oil boom could outpace Persian Gulf exports to America in a decade.

The ship's presence here is a sign of U.S. military and financial interest in an increasingly strategic part of the world -- one American officials say is vulnerable to piracy, political instability and terrorism.

The potential dangers are clear with 3,000 miles of virtually unpoliced coastline that's home to billions of dollars in U.S. oil industry investment alone.

"It's a lot of water with not a lot of security," said Lt. Cmdr. Daniel Trott, a strategy specialist for U.S. Naval Forces Europe, whose area of responsibility includes most of Africa. "And where there's a lack of security, there's an opportunity for bad actors to show up."

Though U.S. officials cite no current terrorist activity in the Gulf of Guinea, homegrown al-Qaida-linked groups or cells are thought to be active across Africa, especially in countries with large Muslim populations like Algeria, a longtime oil producer, and Mauritania, which is poised to start pumping crude next year.

In Nigeria, the fifth-biggest source of U.S. oil imports, a phoned-in terror threat in June forced the U.S. consulate in Lagos to close for several days. Al-Qaida chief Osama Bin Laden purportedly marked Nigeria for "liberation" in a release posted on the Internet.

The United States is trying to ease its dependence on oil from the volatile Middle East by turning to West Africa, which produces about 4.5 million barrels of light, sweet crude a day.

Led by top African producer Nigeria, the Gulf of Guinea already delivers about 15 percent of America's oil supply. By 2015, that figure may swell to 25 percent, according to the U.S. National Intelligence Council, a CIA think-tank.

The Persian Gulf, by contrast, accounts for about 22 percent of U.S. imports, according to the U.S. government's Energy Information Administration.

Over the next five years, 1 in 5 new barrels of oil on the global market will come from the Gulf of Guinea, and more than $33 billion will be invested in the region, 40 percent of it from American companies, the Washington-based Center for Strategic and International Studies estimates.

Stretching roughly from Ivory Coast to Angola, the Gulf of Guinea is relatively unfamiliar to U.S. forces, and tours of the region such as last month's by the Coast Guard are aimed at shaking hands, gaining familiarity and assessing threats to oil access.

The 100-man crew of the Portsmouth, Va.-based cutter, temporarily assigned to the Navy's 6th Fleet, paid brief visits to Cape Verde, Ghana, Benin, Equatorial Guinea and Sao Tome and Principe, a tiny two-island republic whose capital's seaport is so small that the 270-foot vessel had to anchor offshore.

One recent morning, half a dozen Sao Tomean sailors hopped aboard an orange American zodiac, taking instruction from U.S. sailors on man-overboard lifesaving exercises. On land, another group gathered around a mustachioed American showing them how to repair an outboard motor.

That afternoon at a peach-colored seaside high school, the only one in a country of about 150,000 people that's roughly five times the size of Washington, D.C., a few U.S. crewmen fixed door hinges in what was clearly a public relations campaign.

Sao Tomean officials warmly welcomed the three-day American presence, but they were under no illusions.

"Unfortunately, Americans are interested in Sao Tome because of oil, but Sao Tome existed before that," said Carlos Neves, national assembly vice president.

Sao Tome doesn't have any proven reserves, but the search is under way and the government has awarded some exploration sectors to American and other companies.

Think tanks like CSIS are pushing for a greater U.S. role in the region to protect American interests. But with its own military assets tied up elsewhere, including the Persian Gulf and Iraq, the United States is not looking to take the lead in the region -- at least not yet.

"We don't have the resources to provide maritime security here. We're not going to be the force in the Gulf of Guinea," Trott told The Associated Press at a hotel in palm-fringed Sao Tome, capital of the archipelago perched on the equator.

"But we are looking to increase our involvement right now -- not to send ships on patrols, but to develop partnerships and develop capacities," he said. "If the Navy had more assets, would they send them here? Probably. But our first choice is to use what we have to facilitate training and regional cooperation."

Cutter Cmdr. Bob Wagner described the mission to develop African maritime security as "preventive work to keep terrorists from the seas."

The only U.S. military base in Africa is in the Horn of Africa nation of Djibouti, the hub of anti-terrorism efforts on the continent.

Sao Tome has been touted as the possible site for a new U.S. naval base, but officials from both countries said no such plans were in the works.

A top U.S. diplomat said U.S. forces may use storage facilities on Sao Tome as they do in other parts of Africa: to preposition equipment and supplies for emergencies, but no more.

U.S. involvement today is limited mainly to a yet-to-be-completed feasibility study on expanding the airport and building a deep-water port in Neves, north of the capital, in anticipation of a massive local oil boom.

The U.S. isn't offering to construct either, however, and deeply impoverished Sao Tome can't do it alone.

Showing Sao Tome lawmakers around the cutter's bridge, Wagner spread out a large map of the country, its maritime boundaries highlighted with a black pen. Underlining Sao Tome's desperate state, local coast guard chief Capt. Joao Idalecio asked if he could have a copy.

The tiny size and inexperience of Africa's maritime forces, and the lack of cooperation between them, are chief concerns.

Sao Tome and Principe's coast guard is just 50 men and two inflatable zodiacs -- clearly inadequate to patrol a vast, yet-to-be-exploited zone it shares with Nigeria that's believed to contain up to 11 billion barrels of oil.

Petrol facilities and oil rigs in other places are also vulnerable. In Equatorial Guinea, for example, some U.S. oil platforms are protected not by that government's minuscule navy but by private, unarmed guards.

Fostering political stability and keeping oil flowing are key U.S. goals, particularly in Nigeria, which exports about 2.5 million barrels daily, half of it to the United States.

Militia attacks and threats against foreign oil workers in Nigeria's oil-rich delta have cut hundreds of thousands of barrels of daily oil production. Muslim-Christian violence in the volatile country's north has killed thousands.

On Wednesday, army officers overthrew the U.S.-allied president of Islamic Mauritania, which had been increasingly looking to the West and citing a growing threat from al-Qaida-linked militants.

Equatorial Guinea and Sao Tome have both been struck by coups and attempted coups over the past few years.

Washington had in the past shunned Equatorial Guinea, run by Teodoro Obiang, a longtime dictator who had his predecessor -- his uncle -- executed by firing squad. But with the tiny nation's newfound oil wealth, that has begun to change. The visit to Equatorial Guinea was the first by U.S. forces in 13 years.

U.S. officials said most countries welcomed the American visits, though one officer described Equatorial Guinea military officials as "distant and standoffish," speculating their estrangement was because of growing Chinese influence there.

Encouraging intelligence-sharing and helping nations prepare for potential terror threats is another U.S. strategy.

It's similar to what the U.S. is trying to do elsewhere on the continent, particularly the vast, ungoverned stretches of open desert that sweep across northern Africa, where U.S. forces conducted joint training exercises with African armies this summer.

In October, the U.S. Navy hosted a first-ever gathering in Italy of Gulf of Guinea naval officials. A similar conference is planned for Ghana in December.

Idalecio said Sao Tome hoped to expand its own coast guard, mainly to protect against illegal fishing and piracy.

Wagner acknowledged the monumental task before the under-equipped African naval forces face.

Is Iranian Oil The Backdrop To US War On Iraq?

There's an interesting theory in a new article by a man named Rudo de Ruijter that suggests America's big problem with oil is not that it's disappearing, but that Iranian oil is being paid for in euros - the staple currency of the European Union of nation-states - and not in dollars, as OPEC oil-producing nations pays.
We do not endorse the theory, but we think there is a lot of financial background in the story that most of us may not know, and particularly the consequences that flow from the decline of the dollar as it impacts the oil industry.

The author describes himself as an independent observer, not an economist, and his English is not yet perfect, but we think you'll find his take on the future of U.S.-Iranian relations at least as interesting as the cacophony on Raging Bull.

Here it is:

Iraq and now Iran, what is it about?

Iraq had would-be weapons of mass destruction. Now it is the turn of Iran. There are many leaks about an imminent attack. The US would attack still this year. The press shows images of nuclear plants.[1] Here, there would be a possibility to produce nuclear arms…

Before the invasion of Iraq, many people thought it was about oil. Iraq has the second biggest world oil reserves (10.5 %). The oil reserves in the US are, in comparaison, nearly exhausted (2 %). The US’ consumes more than any other country: 25 % of world oil consumption.[2] So it was rather logical to think, the attack on Iraq had something to do with oil. But how exactly?

OPEC oil is paid in dollars

Since 1971 the dollar has been detached of a fixed amount of gold. In fact it was an emerency solution of President Nixon. The Vietnam war had emptied the national bank. The US did not have enough gold anymore for all the dollars it had issued. Since then the value of the dollar is determined by offer and demand. Still the same year the OPEC-countries decided they would only accept US-dollars. At that time too the dollar was the most used currency in international trade. So nothing special?

All countries need dollars

Since 1971 everyone who wants to import oil from OPEC countries, has to buy dollars first. And that is where the fun starts for the US. Everybody needs oil, so everybody wants dollars.

Oil buyers from all over the world hand over their yens, crowns, francs and other currencies. They receive greenbacks in return. With those dollars they go and buy oil in the OPEC countries. The OPEC countries will spend the money again. Of course, they can do that in the US, but also in all other countries in the world. Everybody wants dollars, for everybody will need oil again.

The first benefit for the U.S.

In this oil trade a huge amount of dollars is needed. Many dollars will stay in the permanent money cycle outside the US, that is to say between the OPEC countries and other countries. At the start there were not enough dollars for this. They had to be printed. It cost the US paper and ink. But then the enormous benefit arrives: there is only one way to get those nice new greenbacks out of the country: the US goes shopping abroad for free!

All the time more dollars for abroad

This free shopping did not only occur at the start. As soon as more money is needed in the oil trade, by increase in price or volume, that means shopping for the U.S.

The same thing happens when the number of dollars in the rest of world trade increases. Globalization and free world trade mean that still more dollars will disappear in every little corner of the globe. And in the first place, each time this means free shopping for the US!

Debt

Of couse those free shoppings create a debt for he US. For, some day, the foreign countries could use those dollars to purchase things in the US. Then, finally, the US has to give something in return.

Trade balance

So, to avoid problems, the US should take care their purchases and sales stay balanced. After 1971, when more dollars were put into circulation, only in 1973 the US sold more then it bought. Afterwards the situation declined, and each year the US bought more foreign goods they never paid for. In the year 2004 alone, the shortage on the trade balance was 650 billion dollars! On a population of 220 million people this means, that in average each US citizen purchased for $ 3,000 dollars of foreign goods they did not pay for!

US imports 2004 $ 1,469,704,400,000,00
US exports 2004 $ 818,774,900.000.00
Purchases less sales: $ 650,929.500,000.00

The exchange rate of the dollar

Each country which purchases more than it sells, will see the value of its money diminish. If you can not do a lot with a currency, demand decreases and its exchange value goes down. But what is true for all other currencies, is not true for the US dollar. As long as the whole world needs dollars to purchase oil, there will always be demand. And this is the key for understanding the need for the US to keep the sale of OPEC oil in dollars.

Moreover, in times the use of the dollar expands, the US can let it’s exchange value increase, by not responding at the demand immediately. At first central banks in foreign countries will sell their dollar reserves to avoid the dollar to climb. But if the use of the dollar continues to expand, the exchange value will finally go up.

US consumes one quarter of world oil production. When the dollar rate climbs, only the price for the other three-quarters of oil consumers will get higher. For the US the price stays the same.

When the OPEC price climbs, more dollars are needed in the cycle. If oil consumption remains the same, those extra dollars can be printed and added to the cycle without decline of the exchange rate. Since the US imports 1/8 of world oil consumption, seven-eighths of the extra dollars are needed outside the US. This means that at each increase of the OPEC-price, the US can sell seven times more new dollars abroad than the increase it pays itself. Which means free shopping and making debts!

The US disposes of a wide range of tricks to influence the exchange rate. Put more dollars in circulation when the rate goes higher than wanted. Buy back dollars themselves when demand decreases. For instance by issueing bonds. However, this solution costs money: the interest. All those interests together have reached such high levels, that new loans have to be contracted each time to pay for them. US debts increases faster each time!

7,800,000,000,000 dollar debt(July 2005)

Today US debt is so high (http://brillig.com/debt_clock/) that is not imaginable it will ever be paid back. On www.babylontoday/national_debt_clock.htm you can see the current height and you can see how much it grows each second… 45 % of it is to be paid back to foreign borrowers.

If you don’t need dollars for oil anymore...

If US dollars are no longer necessary to purchase oil, there is no advantage for the rest of the world trade to use the dollar. Only disadvantages. The dollar does not represent any weight in gold anymore and the enormous debt will lead to the logical desastrous consequences. The dollar would drop. Foreign countries could buy cheaply in the US. On the contrary the US would have to pay lots of dollars to purchase things abroad. US would not have enough money left for an expensive army. It would loose its influence.

Saddam Hussein and the euro

In 1990 Saddam invaded Quwait. In 1991 he was expulsed from Quwait during Operation Desert Storm by 134 countries led by the US. Then the trade embargo was installed. Iraq was isolated internationally and broken economically. The United Nations created the Oil For Food program. Iraq was allowed to sell restricted volumes of oil in order to be able to buy food and medical supply for its population. As the US was opposed to ending the embargo this lasted many years. Then, in February 2000 Saddam asked the United Nations to switch the currency of the Oil For Food program from dollars to euros. On October 30, 2000, the United Nations accepted the switch. [4]. That seemed to be the ending of the dollar hegemony! The rate of the euro, which had been going down snce 1998, started a triumphatical climb. The rate went higher and higher.

The US had a problem. A pretext had to be found to rule out Saddam. After September 11th 2001 the wold press was to be made believe Iraq would have weapons of mass destruction. On March 20th, 2003, Iraq was attacked by the US and a few remaining allies. On June 5th 2003 the oil trade was switched back from euros to dollars.

Iran and the euro

More and more OPEC-countries want to get rid of the exclusive tie with the dollar. In 1999 Iran stated publicly it wanted to accept euros as well. Just logical if you realize Iran sells 30 percent of its oil production to Europe and the rest mainly to India an China. In spite of President Bush's threatening tale, mentioning the country as a part of some "axis of evil," Iran started to sell its oil in euros from spring 2003. The euro continued its march. The iranian oil price was still labeled in US-dollars, but customers did not have to exchange their money in dollars first anymore. And now, while the US is still occupied to impose its will in neighbouring country Iraq, Iran has already announced its next step: it wants to establish an oil bourse with its own oil prices in euros. Exit dollar.

Like a cat in a tight corner

The US is in a scrape. The permanent demand for dollars allowed it to buy on tick and rule the world. By political plotting and superior military power OPEC-countries were kept in harness. If one dared to sell oil otherwise than in dollars, he could count on a beating. For Iran Bush probably has already his plans. It seems likely to me, they consist of the same ingredients as for Afghanistan and Iraq.

The march of the euro

Since January 1993 the euro has a quotation at the exchange market. In June 2005 its rate is the same as at its introduction, $1.22. In its short life the currency has already experienced many fluctuations. From the end of 1998 it sank away. Until Sadam Hussein switched to the euro at the beginning of November 2000. Although the Iraqi oil trade was switched back to dollars in June 2003, the march of the euro continued, as Iran had started to sell oil in euros then.

The euro has become a small world currency now. Between July 2004 and July 2005 the part of the dollar in world trade went down from 70 percent to 64 percent. A little bit less than half of those 64 percent presents the US’ part in world trade.[5] If the euro wants to develop into a currency as mighty as the dollar, it still has a lot of work to do.

In essence the euro has the same disadvantages and dangers as the dollar. In times the use of the euro outside Europe grows, there is only one way to get new euros outside: go shopping around the world and make debts. As long as there is a motor which keeps the demand for euros going (for instance an oil bourse in Iran), you can endlessly let debts increase and push it in front of you. This is one of the things the example with the dollar learned. Then Europe can live on the tick of other countries, who have to buy euros before they can purchase oil.

We also have to realize, that an Iranian oil bourse would have a lot of influence on the exchange rates between dollar and euro. If the oil price in euros goes down (compared to the oil price in dollars), there will be a rush on the euros. And, inversively, when the oil price in euros increases, there will be a rush for dollars.

Freedom of expression

In the Western world we have freedom of expression. It means anyone can shout what he wants. Next, the press selects what it wants to relay via its newspaper, radio or tv to its public. Politicians often know to use this sytem adroitly. Like President Bush, who succeeds to mislead the world each time. In fact it works very simply. When a politician tells us, that certain persons are dangerous and that he will do something about it, he will get our support. The terrorists of 9/11 came from Saudi Arabia, but when Bush goes and search for them in Afghanistan, we believe him right away. Of course Bush does not tell that he wants to occupy Afghanistan in order to build profitable and strategic pipelines there. An employee of Unocal Corporation that helped developing the plan becomes interim president of Afghanistan.

The lies about arms of mass destruction came out. No problem. The White House simply tells us it was a good case anyway. Saddam murdered Kurds massively. The public likes such arguments. It doesn’t mean the White House really cares mass murders. Has there ever been a US military standing trial for his participation in mass murders in Vietnam, Cambodia or Afghanistan? When President Bush will tell the world Iran is a villain country, it does not seem likely to me that he will explain how painful it is to the US that Iran sells its oil in euros.

Conclusion

The political and diplomatical joust about nuclear plants (and other emotional subjects still to come) leads the attention away from what is hurting the US most: the decreasing demand for dollars caused by the sale of Iranian oil in euros. The crumbling of the demand for dollars will definitely lead to the end of US’ hegemony.

Rudo de Ruijter,
independent observer,
rudoderuijter@wanadoo.nl

Sources:
US Broadcasts of TV5 Europe
Department of Energy
US Census Bureau
www.un.org/News/briefings/docs (Fred Eckhard, October 31st 2000)
BIS (Bank for International Settlements)

Saturday, August 06, 2005

Block 2 PSC Set For Oct. 7 Approval

The oil industry trade journal UpstreamOnline in Friday's edition provided the mutually-agreed-upon dates for conclusion of the Production Sharing Contracts that will govern the dealings of the Nigeria-Sao Tome and Principe Joint Development Authority with the winning bidders of five blocks in the 2005 licensing round.

ERHC Energy won concessions in all five blocks, including operatorships on the two most hotly-contested blocks, No. 2 and No. 4, with partners Pioneer Natural Resources and Noble Energy, respectively. The PSCs for all five will be approved in October, the newspaper said.

Although it appears unlikely, many investors have hoped aloud on ERHE message boards that signing the contracts and the related Joint Operating Agreements will lift ERHC's dismal share price, which closed at $0.395 on Friday after trading in a $0.025 range on low volume all week.

Here is the UpstreamOnline story by prize-winning oil reporter Barry Morgan:

Deadline agreed for end to talks on JDA contracts
The Abuja-based Nigeria-Sao Tome Joint Development Authority (JDA)managing the current deep-water licensing round in the Gulf of Guinea has agreed a timetable to conclude production sharing contract talks by 11 October, writes Barry Morgan.

Meetings took place late last week during which oil companies demanded more time to review the JDA's draft contract.

Oil company negotiators will convene again in Abuja on 25 August and not two weeks earlier as previously targeted.

In addition, they will have to submit their comments by 18 August.

Final comments from the companies will be solicited on 16 September after initial talks, and the final version will be hammered out and approved by the Joint Ministerial Council by 29 September along with all the joint operating agreements.

The draft document applied to blocks 2, 3, 4, 5 and 6 is understood to be based on Chevron's PSC, which has already been awarded for Block-1 in the Joint Development Zone.

It is envisaged that the PSC for Block 2 will be approved on 7 October.

Block 3 will be approved on 8 October, Block 4 on 9 October, Block 5 on 10 October and Block 6 on 11 October.

Friday, August 05, 2005

Prescription For Greatness: With Parting Words Of Wisdom, Gigwoof Says Goodbye To I-Hub And Points The Way For Offor

In a burst of unaccustomed eloquence, Gigwoof, the longtime co-moderator of the ERHC Energy message board at I-Hub, has departed from that post and left thoughtful investors much to ponder in his wake.

His words are ostensibly directed at fellow investor petmantx and others on the board, but seem subtly aimed at Offor himself.

He says, in essence, that if Offor is truly an ambitious man - if, in fact, he would like to become what Gigwoof calls "a great man" - he needs to move toward the center of the investing world and away from "the OTCBB fringe."

We can find little to fault in his farewell note, and we also think it is valuable advice for our company's chairman, and so we pass it on to him:

"About your questions concerning Offor.

Thanks for an excellent post, petemantx; sorry it got buried in all the BS... . Here is my li'l DD on this:

Those of you who've known me for a long time know that I have always congratulated ERHE on positive steps (there have been quite a few this past year) but also that I call it like I see it.

In a nutshell, at THIS time I believe that your concerns are well-founded, and no, you're not out in left field.

To my eyes and those of very experienced investor friends, it is obvious that Offor has been using ERHC as his personal piggybank by issuing more stock here and there, and working with some MMs to dump into any serious run (NOT every day as some seem to believe, that's left to regular swing traders, just substantial runs) in order to keep the SP at whatever level he needs at a given time and/or accumulate yet more cheapo shares.

We were hoping that it would stop early this year, but alas it didn't. The moving of his shares offshore via Chrome, while having definite advantages in terms of protecting the company against a takeover by XOM or others (even our "partners" would probably be extremely interested because of the unprecedented magnitude of the rights that were confirmed by recent awards, none of these are choir boys...) also allows him to do whatever the hell he pleases, and the reporting requirements are next to nil. NOT good. Note also that since early June (awards) there has been no substantial institutional buying. It's not for lack of eyes out there (there are many hawks...) but I'm 99% sure that it's because they are VERY uncomfortable with this very large offshore holding, as are we "regular" shareholders.

BTW, some keep bringing First Atlantic Bank of Nigeria and their measly 70 million shares or so, as a major player here. While it's possible that they have been hurting the SP post-awards too, by shorting or working with a hedge fund, on the grand scale of things I don't believe they are a factor. One reason is that from what I understand it's not just Emeka who has the lion's share via Chrome, his associates, kids, and even his wife all own ERHE shares either directly or indirectly, and you can be sure that those aren't li'l 500K chunks. In other words, Offor & Co. most likely own far more than 50% of the company.

What is Offor like? My DD paints him as a fairly typical businessman, not a "great" man (could happen, he's still young) but a shrewd, successful businessman who has been so successful BECAUSE he is solely interested in his own gain. He is a mix of Western and Traditional African cultures and smartly draws strengths from both.

Offor COULD easily take steps to reassure shareholders, such as simply sending us a letter that states his overall goals for ERHE for the next 5-10 years, or stopping his current, incredibly short-sighted accumulating at 40 cents and let the stock climb to a more normal level (there are hundreds of companies out there in "emerging state" that trade way higher with way less "in the pot") but so far he hasn't. He has a long way to go to understand how the markets work, and I am indeed concerned that he seems to still listen to those of his advisors who keep telling him that the "Nigerian way" is good here too. It isn't. In Africa, friend flips to foe in an instant, but it's on a small scale and it's very manageable. Here it takes much longer, but it's on a totally different scale, and the forces at play are huge.

Pete, I don't believe you were on board at the time, but I have stated and I do maintain that Emeka Offor has the POTENTIAL to be a "great man" (as rich and well-known as Bill Gates within one or two decades, and definitely one of Africa's great stories) IF he understand that he needs to move ERHE to a mainstream market and play by the rules. One simply doesn't get there by playing games and using loopholes at the fringe of the OTC.

I do believe the PXD / NBL alliances help, but until Offor moves his shares back to the U.S. - which would likely allow substantial institutional investing by those small and aggressive institutions and be an almost-immediate, very large benefit to his holdings - allows a substantial buyin by say, PXD, and stops stifling the stock's value, the "Nigerian con man" spectrum will keep floating right over his head.