Saturday, January 09, 2010

No Oil, But Plenty Of Money For New Investments

After spending a small fortune trying to find oil without success in the Gulf Of Guinea, a Saturday January 9 report says ERHC Energy is going to explore the possibility of joint ventures with other firms in the oil and energy business in Nigeria. This comes as the company also announced the end of drilling in Block 4, where five wells drilled over the past four months have not yielded any petroleum.

Here is the story from LeadershipNigeria:

ERHC Energy Inc. Pursues Investments In Nigeria Oil And Gas Industry

Written by By Indo Ali, Abuja with Agency Report
Saturday, 09 January 2010 00:23

A publicly traded American company with oil and gas assets in the Gulf of Guinea off the coast of West Africa, ERHC Energy Inc, has announced that negotiations are underway on potential investments that would expand the company's presence in Nigeria's oil and gas industry.

ERHC has signed a non-binding memorandum of understanding (MOU), with Circle Ltd. and Excel Exploration and Production Limited to negotiate investment in, and acquisition of working interests in the Eremor Marginal Field (OML 46). The Eremor Field, which is located in shallow water off-shore Nigeria, was discovered in 1978.

The discovery well, Eremor-1, encountered three oil and gas zones, the most prominent of which is the D-03 reservoir with 43 feet of net oil sand. It was re-entered for testing in 2005 with the D-03 reservoir testing 2,200 barrels per day of oil with API gravity of 220, a low gas to oil ratio and no water. Excel was awarded a 100 per cent interest and operatorship of Eremor in 2003.

ERHC, through its locally incorporated subsidiary, ERHC Energy Nigeria Limited, has also entered into a non-binding MOU with WellTest Integrated Services Limited to negotiate the acquisition of a controlling equity interest in WellTest. The company provides well testing, production engineering and procurement services to Nigeria's oil and gas industry.

To coordinate the company's business development in the Nigerian and West African oil and gas industry, ERHC has opened its Nigeria liaison office at Oguda Close, Maitama, Abuja. The company's wholly owned subsidiary ERHC Energy Nigeria Limited operates the liaison office.

"With considerable progress being made in the ongoing exploration campaign of our oil and gas interests in the Nigeria Sao Tome and Principe Joint Development Zone (JDZ), this is the right time to accelerate business development activities elsewhere," said Peter Ntephe, Chief Operating Officer of ERHC. "These opportunities will begin the process of diversifying our portfolio of assets and accelerate the timeline for producing revenues. We are also investigating other exploration and production opportunities and will report progress to stockholders at the earliest appropriate time."

The MOUs are non-binding and the completion of the transaction is subject to, among other things, negotiation of a definitive agreement, satisfactory due diligence and adequate financing.

The parties expect to enter into a definitive agreement and complete the transactions, subject to satisfaction of closing conditions and the receipt of all necessary regulatory and other approvals, including board approvals.

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