Wednesday, November 29, 2006

Mark St. Amour Offers Upbeat News From Nigeria

It hasn't lifted ERHE's share price yet - we've fallen to $0.32, where texasspeculatior entered four years ago, he said - but Mark. St. Amour revived investors' spirits today with the news of an upcoming Nigeria-Sao Tome and Principe Joint Development Authority meeting in mid-December to finalize operating budgets proposed by concessionaires in the Joint Development Zone.

Those ought to reflect a drilling cost for operations that Mark believes (too optimistically, I think) will begin in February or March. ERHC Energy's partner, Addax Petroleum, had "conservatively" forecast a 2008 start in our Blocks 2, 3 and 4, Mark's JDZ source told him, and a Summer 2007 start appears more likely, the source said. Mark's post also carries hints that drilling rigs may be available earlier, and if that is the case, it ought to provide at least a five-cent boost to the current $0.32 share price.

There is a downside to this news, though. That is that we seem to be headed for a return to the $0.28 - $0.295 level where I purchased about 90,000 new shares in December 2005. I would like to see that entry point again, and despite Mark's good news, I think we will. The other shoe has yet to fall - i.e., we do not know with certainty whether there will be an indictment in the FCPA probe - and that has a powerful depressant effect on our share price. In my dreams, I can even imagine a momentary opportunity as low as $0.22.>br>
The important thing about Mark's post is that it brings not only optimism but some (albeit vague) factual data to answer our queastions, and that has been lacking from the mix for a rather long time. Good work, Mark.

Here's his post, straight from Nashville:

Sorry this took so long. Looks to be well worth the wait. I had questioned/doubted Spec29's BD rig rumor but looks like he may be correct.

I spoke with my JDA source. He said all block consortia are meeting next week and week after (next 10-15 days) to finalize 2007 Budgets. I asked him about drilling and he commented drilling will begin in 2007 (Blocks 2,3,4). I asked him how certain he was of this and asked him if this was just hopeful thinking. He basically stopped me in my tracks and said he was 100% certain drilling would begin in 2007. This also includes CVX drilling another well in Block 1 in 2007. His point was that the operators have a lot of pressure to meet their minimum commitments for drilling. I pointed out that Addax has been saying 2008 for start of drilling. He pointed out they have to be very conservative in their comments/presentations, which makes perfect sense. Addax did say however that if a "rig of opportunity" became available it could be 2007. I asked about timeline (1st,2nd,3rd,4th QTR 2007?). He said he could not be specific but he was certain drilling would begin in 2007 and very likely first 1/2 of 2007. He told me to call back in mid-Dec after meetings have been concluded and he will be able to give me specifics. It was very interesting he mentioned the BD Rig that Spec29 has been talking about. I asked where he heard this info and he told me he heard from people very close to the companies. He said he was hearing the same thing about BD drilling early 2007 but would not comment on Exact date or which block. He says this has to be "formally submitted" before he can further comment on this. This should all happen within next 10-15 days.

Ok, now all the bashers can come out and say I am lying. What you can do is call for yourself. The numbers are on the JDA website. Also, I asked my JDA source numerous times how certain he was of drilling in 2007. Almost to the point of being offensive. He was adamant that drilling will begin in 2007. In his tone he acted as if it was almost common knowledge and that I should have already known this.

IMO, I think we see drilling in JDZ Feb-March. Just my opinion based on my call and other sources.

Sorry if this update seems a little hard to follow. I am busy with work and have to hop back to it.

Take my posts for what they are worth. Better yet do your due diligence. Long and Strong ERHE.

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