- on the balance sheet and a sharply reduced cost of operations, while stirring expectations of drilling news with the announcement of a conference call on Jan. 15.
The call will be archived and available for replay at LiveMeeting.com site provided in the press release below.
For our money, this is an exciting but precarious time to be heavily invested in ERHC, yet I am holding a 75,000-share stake that I would like to have increased in recent days as the share price fell briefly below $0.195. Those are the levels I originally purchased the stock at back in May 2003, and probably represent its absolute bottom before any discount for indictment news.
In my estimate, an indictment - regardless of the charges preferred - will drive the price within the same day of trading to about $0.115 or $0.12 cents. I would urge investors to buy all they can at those levels, because I believe it will rise to close to the previous day's close by the end of the following day. So if it ends at $0.20 the day before the indictment comes, it would end at about $0.12 - $0.14 on the day of the indictment, and at between $0.18 and $0.20 the market day following the indictment.
There is rarely a chance to make as much as 50 percent on your money in one or two days, but this possibility now beckons as the day draws closer for a Justice Dept,. decision (and for the Grand Jury's decision, of course, which tends to reflect only the input of the prosecutors).
But an indictment is not the end of the world, or the end of the line, for ERHC. I think this company's management has actually be through worse things in recent years.
What investors with a brain on their shoulders may well say to themselves is that despite the charges, the future is now mappable. The company will either plead guilty to the charges and then probably pay a fine, or it will plead not guilty and go through a trial. That trial, under most circumstances, would take place after - get that, after - drilling starts in the Gulf of Guineau. Either the company will be acquitted on the charges, in which case we'll see our dollar bill and then some almost instantly, or it will be found guilty, and that would occasion a sharp drop - depending on what we expect the consequences to be - and a fairly robust immediate recovery, depending on the drilling prospects already identified.
What do I think? I think these charges and the DOJ prosecutors' indictment are now politically driven by the power of Big Oil, who so desperately want to be the sole owners of the vast oil deposits in the Joint Development Zone.
You may have noted that no grand jury indictments are awaiting ChevronTexaco, ExxonMobil, Anadarko and others who have been identified by the U.S. Senate Commerce Committee (chaired by the crooked, angry and indictment-prone GOP Sen. Ted Stevens of oil-rich Alaska) as bribing other African governments - so this is clearly selective enforcement against what is perceived to be the weakest of possible victims.
However, the recent 5th Circuit ruling on one of the rare FCPA cases held that a defendant must have been aware that his transfer of money was illegal, and there would be immense difficulty demonstrating that in the case of a Nigerian millionaire whose government's culture of corruption may have well left him clueless that a personal political donation to a propsective Sao Tome presidential candidate in a 1991 election violated foreign corporate bribery laws in the United States, and that particular element is necessary for conviction.
To date, however, no one had made a fortune by underestimating former ERHC chairman and still-controlling stockholder Emeka Offor; he will not walk awat from this fight, either, and I strongly believe he will win it.
But apart from any indictments that may happen, the likelihood of our striking some big oil ourselves in 2008 is very high. That will be the key and decisive factor with respect to share price this year, so all of those who have loaded up in recent months are very likely going to be some very happy campers come Christmas next year or sooner (and remember, I'm an OU almnus and a big Sooner fan). There should be a slow but steady build up of shasre price from the current $0.205 (Dec. 26 close) to the day the drilling begins. It will be chaotic and wonderful.
Now, here is the Dec. 14 release:
ERHC Energy Inc. Reports Fourth Quarter and Year End 2007 Financial Results
HOUSTON, December 14, 2007 – ERHC Energy Inc. (OTCBB: ERHE), an independent oil and gas company with assets in the Gulf of Guinea, today announced its results for the fourth quarter and fiscal year ended September 30, 2007.
As of September 30, 2007, ERHC reported cash assets totaling $34.7 million.
During the three months ended September 30, 2007, ERHC had a net loss of $683,037, compared to a net loss of $1,039,670 for the three months ended September 30, 2006. General and administrative expenses during the fourth quarter totaled $1,377,372, a reduction of 12 percent compared to the same period a year earlier.
For the fiscal year ended September 30, 2007, ERHC had a net loss of $1,756,904, compared to a net income of $23,171,536 for fiscal 2006. The decrease in net income was due primarily to the one-time a $30.1 million net gain from sale of participating interests in Blocks 2, 3 and 4 of the Joint Development Zone (JDZ). For the year, general and administrative expenses fell below $5 million. The decrease of 17 percent was a result of strict cost controls implemented by Company leadership.
“ERHC Energy has strengthened its fundamentals, with improved operational efficiencies, solid finances and continued strong relationships with strategic allies Addax Petroleum and Sinopec,” said Nicolae Luca, acting chief executive officer. “With exploratory drilling possible in JDZ Blocks 2 and 4 within the next calendar year, we expect to begin realizing the benefits of our strategy for orderly growth.”
ERHC Energy holds exploration rights in six JDZ blocks. Additionally, subject to certain restrictions, ERHC holds the right to receive up to two blocks of ERHC’s choice in Sao Tome’s Exclusive Economic Zone (EEZ) and holds the option to acquire up to 15 percent paid working interest in up to two additional blocks of ERHC’s choice in the EEZ.
ERHC will hold a conference call to update the investment community on company operations and discuss its 2007 financial results on Tuesday, January 15, 2008, at 9:00 a.m. Eastern Time (8:00 a.m. Central Time). To participate on the conference call, please dial 866-697-7870 (domestic) or 706-902-1710 (international) five to ten minutes before the call begins and reference the pass code 26560348. A simultaneous live Webcast will be available over the Internet and will be accessible by going to the following link: https://www302.livemeeting.com/cc/erhcenergy/join?id=SZJS7G&role=attend&pw=5%3Ds%5Eg%7EX.
A replay of the call will be available from Tuesday, January 15, 2008 at 10:00 a.m. Eastern Time through January 22, 2008 by dialing 866-697-7870 (domestic) or 706-902-1710 (international) and providing the following replay code 26560348. In addition, the Webcast will be available for replay until February 28, 2008 by going to https://www302.livemeeting.com/lrs/8000074869/PublicEvents.aspx.