Overnight, ERHC Energy shares fell on the Frankfurt Exchange for the second straight day. The stock (ERH.F) was down EUR 0.02 (2.86%) after an identical retreat yesterday.
In late trading after the close at $0.60, >, a 3.61% loss, on Thursday, ERHC shares traded as high as $0.83 before falling back to $0.805 in odd trading an hour after the market's regular day ended. In all, more than 6,123,600 shares traded, according to the New York Times.
Many traders who were busy pumping the stock yesterday are preparing to sell into the good news tomorrow, in the Wall Street tradition of "sell on the good news, buy on the bad."
Additional news about the Chevron/ERHC talks, a fixed date announcement for future PSCs at the close of tomnorrow's or next Tuesday's Joint Ministerial Council meeting, or concerning the Block 1 find, however, could cost sellers substantial profits just days or weeks ahead.
While we fully expect a downturn to start tomorrow, we do not believe it will last beyond April. With ERHC's rights perfected, the company is in excellent shape to proceed to far higher levels.
ERHC On The Move also marked a milestone today: per SiteMeter, we now average 2,036 readers a day.
Here is prize-winning oil industry veteran reporter Barry Morgan's latest - but note a correction in the starred (*) text:
Addax to sign West Africa PSC
By Upstream staff
Swiss explorer Addax Petroleum was expected to sign a production sharing contract this week to operate Block 4 in the Joint Development Zone managed by Nigeria and Sao Tome, writes Barry Morgan.
Addax has just completed a $350 million initial public offering on the Toronto Stock Exchange, which will fund its farm-in agreements with ERHC Energy covering blocks 3 and 4.
The Joint Development Authority expects PSCs to be signed for remaining blocks 2, 3, 5 and 6 next week, subject to agreement by Nigeria and Sao Tome.
ERHC has sought a similar deal with Chinese giant Sinopec to lead Block 2* but it is understood that intensified lobbying in recent days by Chevron of ERHC owner, Nigerian business magnate Emeka Offor, could sway the memorandum of understanding for the US supermajor instead.
High-level talks between senior Chevron and ERHC executives continued as Upstream went to press.
Chevron is understood to be interested in Block 2 even at this stage as its Obo-1 wildcat on block 1, just a few kilometers from the Block 2 border, heads for total depth.
The partners are keeping quite on the well's progress but there is talk that both oil and gas have been intersected.
Transocean drillship Deepwater Discovery's bit is now heading out of the upper horizons towards the original reservoir objective and should reach total depth before mid-March.
24 February 2006 00:02 GMT | last updated: 24 February 2006 00:02 GMT
* Due to a typographical error, Block 2 was misidentified as Block 4 in UpstreamOnline editions last night.