If true it is astounding news, and may account for an unusual statement from the owners of First Atlantic Bank today that said they guarantee a new offering of shares from the bank, which holds 60 million shares of ERHC Energy, will quickly appreciate in value when they hit the market.
The bank's ERHE stock has risen by $12 million since it was acquired in November from ERHC Energy chairman Sir Emeka Offor.
Given the proximity of the awards - late next week, according to the latest estimates - and the confluence of this article with a 2,000-word story Sunday in the Houston Chronicle, the share price could easily reach $0.90 or more by Monday's close. Investors should expect busy trading through the day on Friday.
This was the article published on UpstreamOnline tonight:
Gulf of Guinea hopefuls eye mid-March awards
by Barry Morgan
March 3, 2005, 00:09 GMT
SUITORS tired of the protracted delays in the deep-water licensing round in the Gulf of Guinea between Nigeria and Sao Tome & Principe, hope the way will be cleared for awards by mid-March, writes Barry Morgan.
ExxonMobil has blown hot and cold over its rights to exercise a 25% option in blocks 2 and 4 in the joint development zone and is affecting the timetable for Abuja's plans to licence its own waters.
The supermajor was put on notice last month to exercise its options within a specific time frame. It is believed a quid pro quo deal might yet be forged if ExxonMobil agrees to farm out its rights to make room for independents in exchange for preferential treatment in Nigeria's Exclusive Economic Zone.
US minnow ERHC Energy also has a sliding scale of preferential rights, some free of signature bonus, on a raft of blocks and has bid again on others.
At this stage in the talks, it appears that ERHC would be in line to operate blocks 2, 3 and 4 in joint ventures with its partners, notably Pioneer Natural Resources and Devon Energy on Blocks 2 and 3, and Noble Energy on Block 4.
barry.morgan@upstreamonline.com
5 comments:
Note that Barry Morgan has left himself some wiggle room by writing that ERHC is only "in line" "at this stage" for operatorship in Blocks 2,3 and 4.
It may not be "in line" for all 3 blocks (hopefully ERHC will line up with at least one block) in the "final stage."
I will be happy with winning one block!
Three would be extra gravy. Let's not build over-expectation into the share price before awards.
So much can still go wrong until awards. Exxon may not have our best interest at heart....
Thanks again, Joe, for all your journalistic research.
I agree with your cautious attitude. It still seems unlikely to me that we will get three blocks against such tough competition, but our partners would probably perform better than any of those competitors. I think it is amazing that such a claim - that we are "in line" for three operatorships - can be made, given that we so new to deep sea exploring.
Lets not get too crazy here. I would expect 1 operatorship and anything else is gravy. Our guaranteed percentage rights are good enough.
I think everyone is, or should be, aware that any awards beyond our guaranteed percentages will be based on the expertise and credibility of our partners, Devon, Pioneer, and Noble. They are all very credible players, and, if we are named operators, it is not really ERHC as operator but the partnerships. Thus, our lack of financial strength and technical expertise is really not an issue.
I would love to be a fly on the wall next week when Exxon meets with the JDA. Thus far Exxon has been well within their rights as they are still within the 30 day limit.
However if they try to drag this out beyond the 30 days I hope the JDA will have the authority to lay down the gauntlet. This stalling is the reason they would not be a good choice as a block operator. They move way too slow and have way too much attitude. IF they are acting this way during this process imagine how they would act if they were operator of a block. They would act the same arrogant way.
Thats why the JDA is better off with mid tier players. They will be hungry to get things moving.
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