ERHC Energy's share price, lower than many investors feel is fair for the value of its newly perfected rights in three blocks of the Nigeria-Sao Tome and Principe Joint Development Zone, surged 6.5 percent this morning from $0.77 to $0.82, but volume has remained low and it is likely the price will collapse in the face of sales by day-traders at the end of the day.
Update, 8:45pm ET, 3/23/06: It looks like we were unnecessarily pessimistic about close-of-day trading. ERHC Energy (OTC BB symbol: ERHE) held on to two-thirds of its gain, or $0.04, hanging in there at $0.81 after earlier flirting with $0.83. The volume for the day was 1,759,341, a low number - about 55 percent of averge volume - for a day of significant (5.19 percent) gains. The Wall Street Journal article had no measurable impact.
The surge was apparently based on a belief by ERHE insiders that the impact of the article about the JDZ, Sao Tome and Nigeria will be substantial, as well as expectations that ChevronTexaco will announce a major find soon in Block that may straddle the midline of ERHC/Sinopec's Bl;ock 2, mwnrtioned ERHC only in the context of bribes it allegely paid to Sao Tome officials.
Those charges were dismissed out of hand by Nigeria and repudiated by the Sao Tome delegation to the Nigeria-DRSTP Joint Ministerial Council which granted the awards. They had long been disputed by ERHC, whose former CEO once gave an airport press conference in Sao Tome cwhere he charged that Sao Tome officials were demanding bribes.
However, Sao Tome President Fradique de Menezes has acknowledged a legal $100,000 donation to his 2002 election campaign from ERHC Energy chairman Sir Emeka Offor, the Nigerian millionaire who holds the controlling hand in ERHC Energy and its parent, Chrome Energy.
Today's gains, even if short-lived, do help to break up the pattern of substantial price slippage after major news announcements that has plagued the stock for years.
At 11:35pm ET, ERHC Energy (OTC BB symbol: ERHE) last traded at $0.805, up $0.035, on volume of 953,237 shares. The Ask was $0.82.