ERHE Booms Again, Up Nearly 15% on 2.5 Million Shares

Gaining strength as it goes into what may be the final week befor awards, ERHC Energy shares outpaced expectations today as they soared 14.81 percent to close at $0.62, a gain of $0.08 on volume of 2,568,266 shares.

The strong performance was at least partly due to former investors revisiting the company's shares as they learn it has become debt-free and as Nigerian newspapers openly suggest the company will be awarded all of the preferential rights it sought and perhaps one or more operatorships with partners Noble Energy in Block 4 and Devon Energy and Pioneer Natural Resources in Blocks 2 and 3.

The share price had an early and rather odd run in the late morning as just four or five lots moved it up in half- and then full-cent increments to $0.60, where it immediately stalled and fell back to $0.57 in the range of the anticpated gains we advised this morning.

Investors now look forward to a strong opening on Friday, especially after apparent day-traders tried to knock the price down in the last 15 minutes, and succeeded in taking it from $0.63 to $0.60, only to find stronger hands guiding the price back to $0.62. The ERHC On The Move portfolio of 123,040 shares purchased at an avergae of $0.4394 enjoyed a gain of $9,843.20, giving us a total gain of $22,221.03 since our last substantial purchases in November, when the stock briefly toyed with a low of $0.38.

There was a great deal of news propelling today' momentum, although none of it produced a day certain for awards. A clarification from Nigeria-Sao Tome Joint Development Authority spokesman Sam Dimka addressed to markvo10, now known on the Raging Bull message board as orangeandwhite0, resolved a ticklish phrasing in one story that suggested ExxonMobil might get more time to exercise its rights after the JDA met with them next week so that the company could seek clarification of unnamed issues relating to their two 25 percent preferential choices in any of the five blocks on offer in this second JDA licensing round. Dimka said that process would not extend the March 19 deadline for XOM to make its choices.

Those choices seem to remain three: first, to till the fields itself, as it apparently does not want to do; to partner with other bidders to whom it would "farm out" the rights, much as landlords and sharecroppers do; or to reserve their choices for three blocks yet to be offered - Blocks 7, 8 and 9 - or possibly for rights in Sao Tome's Exclusive Economic Zone.

Either or a com,bination of two could prove a judicious play if, as expected, vast reserves are verified in the Gulf of Guinea blocks controlled by the government of Sao Tome and Principe and those now offered by the JDA.

For investors, however, having some assurance that the months of delay must end on March 19 is a relief likely to encourage more buying even before the market opens on Friday.