Wednesday, February 22, 2006

We're Off To The Turtle Races

In a day of erratic trading that has cut the share price by a few cents, the big news might have been that the Sao Tome's oil minister Deolindo da Costa confirmed to the Portuguese news agency Lusa that ERHC Energy's new partner, Addax Petroleum, has indeed been approved as operator for Block 4 of the Nigeria-Sao Tome and Principe Joint Development Zone.
Or it might have been that, according to a poster whose sources are usually wrong, that the PSC for Block 4 will be signed with Addax and ERHC tomorrow - at least that was "tentatively" scheduled to happen, Mark St, Amour said, just before a new wave of selling began.

But as the share price fluttered back and forth like a nervous butterfly between the high $0.70s and the low $0.80s, the really big news of a possible Block 1 Chevron strike on its OBO-1 well near the boundary with ERHC Energy's Block 2, and the rumors that most of the oil Chevron discovered is in our block, not theirs, remains unconfirmed - by Chevron and ERHC Energy, anyway, since everyone from the drilling rig workers at Chevron to UpstreamOnline's Barry Morgan and Britain's The Guardian have indicated the strike is real.

At 2:51pm Wednesday, volume reached 3,823,584, substantially lighter than yesterday's record-setting 16 million but about two times the 10-day daily average, and the Bid and Ask were $0.80 x $0.805, and there was confusion among investors prompted by a series of posts from an Abuja hotel worker named Meridian (or is that Mongo?) that stated unequivocally that the talks between the two rumored last week are in fact not occurring.

The best information available remains that the coveted Block 4 PSC will be signed next Tuesday, and that Chevron has indeed struck "big oil" that may cross under Block 2 in the JDZ, and that our people and their people - and probably Sinopec's people - are talking.

Whether that assurance is enough to support the share price until confirmation or denial of the strike and the talks can be received from the companies involved is anyone's guess.

But that Block 4's signing is an enormous coup for the company, and that it has rremendous potential, is undeniable. It's going to take time for things to work out, though, so for now we're off to the turtle races.

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