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.