Wednesday, November 22, 2006

ERHC Disappoints, But VION Pick Soars

I guess I have the right to brag a little about this column's recommendation of VION, a small pharmaceutical company whose stock a few months ago had fallen to a very affordable $1.01. I told folks I thought it was a great price, and bought 4,800 shares myself. In the lamented good ol' days, I might have plunged for a bigger chunk, as I felt strongly about it, but alas, my foolish dalliance with high-intensity day-trading - I spent $5,000,000 in March alone - cost me dearly.

Well, my financial ship has righted, but I made the mistake of selling the Vion around $1.09 to help a friend save his store on his promise to pay me back the following week. I should have known better, but I didn't want him to lose his store, and he and his wife are personal friends, but the repayment has stretched now to more than three months and he still owes me all but $700 of the entire principal, and I probably will have to go to court.
VION, in the meantime, has climbed to $1.84, although it's fallen back to $1.78 this morning. I think it has a little ways to go, though. That 84 percent profit is the kind of money we ought to have been enjoying in our investment in ERHC Energy, and while that will probably come, we have waited a very, very long time. This was Chevron and Exxon Mobil's design, I believe, when as I also allege, they used their political influence to snag the company in a phony foreign corruption probe they also fomented.

The plan was to cause our investors to suffer interminable delays while our money was frittered away on high-powered lawyers and complex international legal issues. This is an excellent plan, and it is working like a charm. There has been no crime committed, but ERHC Energy remains in a state of suspended animation while that fact is being established by a very dilatory U.S. Attorney in Washington - not Houston, where the case should have been initiated.

What does this mean for invesgtiors?

Well, in my opinion, even the U.S. Attorney at some point has to face the absence of probative facts and accept a "no bill" before the federal grand jury that is presumably hearing some aspect of this case. US Atty. Mary K. Dimke is fortunate, though, that media reports - and nothing else - have very imperfectly linked the issue to the William Jefferson case, where it had no role and no exposure beyond a yellow press clipping found in a file bearing Jefferson's name in ERHC Energy's offices during the armed raid by an FBI SWAT team that scared our three employees - our poor secretary, former CFO and ex-CEO Walter Brandhuber - half to death. Now we have only two employees to scare.

Meanwhile, though, I have spent three hours in face-to-face conversation with someone who is extremely familiar with the woman who wore the wire in the Jefferson case. That has left me fully briefed on elements of that case, and I can guarantee you the information supplied by my new acquaintance will dramatically undercut the Jefferson probe as well. As that case is eroded, and the U.S. Attorney faces a major embarrassment, the ties to ERHC Energy will evaporate as they ought to; they were never more than a guilt-by-association rap against two long-ago proponents of ERHC who had already moved on to the big and lucrative GEECF scam.

Chevron and ExxonMobil, acting - we believe - through the former Chief Counsel for the Senate Energy Committee, Judy Pensabene - whose husband Greg (last time we checked) is chief lobbyist for Anadarko and a strong Democratic Party contributor (and former Clinon Administration Energy Dept. official), ERHC's rival for the priceless Block 3 and Block 4 rights we won in the Nigeria-Sao Tome and Principe Joint Development Zone (where the Chevron and ExxonMobil venture has already found at least a billion barrels of oil, partly under our Block 2 rights) will likely come up with some scheme to either extend the probe or concoct evidence through their maze of intermediaries.

But ERHC Energy's day will inevitablty come, because it is fundamentally innocent of anything but being Nigerian, which by itself is apparently a federal crime these days. That's why those long-term investors who are not in and out daily seeking small gains are likely to prosper mightily by the time it all winds to an end. Our company will not give up its rights or sell them off short of a massive offer, and Chevron and ExxonMobil will lose out when one of the world's richest oil deposits is ultimately located in Blocks 2 and 4.

By the way, look for ExxonMobil to go to $69 ex-dividend. Some folks have all the luck.

Disclosure: I own no shares of ERHE or VION, and a trustee controls the 1,500-odd shares of Chevron held by our family trust.

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