Wednesday, March 29, 2006

ERHC Energy Spills $0.04 After Report Says Block 1 Find Is Not Substantial

After one report this morning knocked down claims that the ChevronTexaco find in Block 1 was not nearly as large as rumored, ERHC Energy fell $0.04 to $0.845 and investors faced the prospect of a lengthy wait for different news.

Whether the lure of the big find has already been completely discounted or the trouble in Nigeria over the escape and recapture of Liberian warlord Charles Taylor depressed the price, the gains of recent days seeped out of the stock, which fell as low as $0.84 before stabilizing. The high of the day was $0.89. We "panicked and sold" at a small profit and now plan to get in several cents cheaper.

Here is the report from Upstream:

Afren quashes Obo rumours

By Upstream staff

London-listed explorer Afren has poured cold water on media speculation that the Obo-1 well, in Chevron-operated Block 1 in the Nigeria Sao Tome & Principe Joint Development Zone, could hold up to 1 billion barrels of oil and gas.

Afren said the well is still being evaluated, adding the results "will not be known until the operator has completed its evaluation and authorised the release of further information".

Newspaper reports published in Africa and the US yesterday said drilling results indicated that Obo-1 held up to 1 billion barrels. The reports cited an unnamed source.

Chevron operates Obo with a 51% stake. Its partners are ExxonMobil (40%) and Nigeria's Dangote Energy Equity Resources (9%). Afren has a 49% holding in Dangote Energy through its wholly owned subsidiary Energy Equity Resources.

At 11:55am ET, the price was $0.84 x $0.845 on 1,547,953 shares of volume.

CNN broadcast live a discussion between President George W. Bush and Nigerian President Olusegun Obasanjo that briefly veered into security issues concerning the Gulf Of Guinea, but there was no happy announcement of a major find.

According to many news reporrts, the meeting was almost cancelled after Taylor escaped from his villa in Nigeria, prompting a concerned call from Secretary of State Condoleeza Rice, but was put back on the agenda when he was captured at the border and flown to Monrovia to stand trial for war crimes.

All of this took place under the shadow of the moon as much of Afrca observed a total eclipse of the sun.

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