Friday, August 25, 2006

Upstream Online's Morgan Says Drilling Could Commence This Year

For good reason, Mark St. Amour has criticized me on I-Hub for not posting either a story by Barry Morgan in UpstreamOnline nor a report from Platt's that offer more positive observations on JDZ prospects than Tuneman got from Addax Petroleum's P.R. department.

The Morgan report says drilling of test wells in blocks where ERHC Energy has an interest could commence as early as this year - not 2008, as the Addax folks told the odious Tuneman.

My excuse: I haven't been reading I-Hub very much lately.

Mark notes that I am not currently holding ERHE, which is true. I have sold my VION, which enjoyed a nice 25 percent gain, and will be back in the market for ERHE at $0.40 or below in the next week.

I couldn't find the Platt's post, so I won't be running that until I do.

Here is the Upstream article:

UPSTREAM NEWS JDZ - Chevron targets drilling to firm up Obo-1 discovery

CHEVRON may resume drilling at the Nigeria-Sao Tome&Principe Joint Development Zone Block 1 within three months, writes Barry Morgan.

Depending on rig availability, Chevron, alongside partners ExxonMobil and the Dangote-Energy Equity Resources-Afren tie-up, will be anxious to determine the commercial extent of the Obo-1 discovery, said sources within the Abuja-based Joint Development Authority (JDA).

Drilled in March, the Obo-1 wildcat hit hydrocarbons. Samples are still being analysed but at least two wells are committed under the work programme.

Drilling is also planned this year for blocks 2, 3 and 4, operated by Sinopec, Anadarko Petroleum and Addax Petroleum respectively, but the consortia are still "shopping around for rigs".

The JDA this week confirmed all budgets and work programmes had been approved.

Production-sharing contracts for the remaining joint development zone blocks 5 and 6 have yet to be signed because partners still have to finalise the joint operating agreements.

Operatorship of Block 5 has gone to private Iranian outfit ICC-OEOC, while Block 6 has gone to Nigeria's Filthim-Huzod.

Houston independent ERHC Energy has a 15% stake in both licences.

Examination of these two remaining licences will be uppermost on the agenda of the new JDA chairman Ado Yakubu Wanka, who took office late last week, and will also head up the Finance&Administration Department.

Also appointed last week was fellow Nigerian Morrison Anthony Fiddi, a Florida-trained geologist, who will lead the JDA's Monitoring&Inspections Department.

Wanka replaces Sao Tomean Carlos Gomes under Article 10 of the JDZ Treaty, which requires the chair to be rotated annually between Nigeria and Sao Tome.

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